Federal Deposit
Insurance Corporation

September 13, 2004

Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: Community Reinvestment, RN number 3064-AC50;
Proposal to Expand Eligibility for the Streamlined CRA Exam

Dear Mr. Feldman:

I have been working in the banking community for over 12 years. I am currently the President and CEO of a small community bank in Athens, AL. During my banking career I have been exposed to many different financial institutions ranging in size from 80 billion to 50 million. That experience has lead me to join my fellow community bankers throughout the nation in strong support of the FDIC's proposal to increase the asset size limit of banks eligible for the streamlined small-bank CRA. examination. I strongly support the elimination of the separate holding company qualification.

The proposal will greatly alleviate unnecessary paperwork and examination burden without weakening our commitment to reinvest in our communities. The enormous amount of regulation that is put on community banks is overwhelming and will eventually cause the extinction of community banks as we know them today. Our bank is constantly reinvesting in our community, which provides the fuel for maintaining the economic growth and development that is critical in today's environment.

The time it takes for community banks to prepare and work though the different examinations have a negative effect on our ability to meet the day to day needs of our customers and our community. With a streamlined. exam process community banks will have more time and money to put back into our local communities in the form of loans.

It is important to remember that the streamlined CRA exam is not an exemption from CRA.. Itis a more cost effective and efficient CRA exam.: Community banks are still. responsible for complying with CRA. The procedures used to examine a $500 million dollar institution or greater are not going to fit when examining a $50 million dollar community bank.

The biggest problem for community banks and the large bank CRA exam is finding "qualified investments" is extremely difficult to find. Many community banks are forced to invest in statewide mortgage bonds or housing bonds to meet their CRA requirements. Just think what an impact the community bank could have if it was able to take those dollars and invest them into the local economies.

For this reason, I believe that the FDIC's proposed community development requirement for banks between $250 million and $1 billion is more flexible and more appropriate than the large bank investment test. The proposal focuses on community development, but considers investments, lending and services. It allows community banks to pursue development activities that meet both the local and community needs and make sense in light of the bank's strategic strengths.

I also believe that the proposal will help rural banks meet the special needs of their communities by expanding the definition of "community development" so that it includes rural residents in addition to low and moderate income individuals. Community banks in rural areas are constantly being asked to support needed economic infrastructure development such as school construction, revitalization of Main Street, or loans that create needed jobs. These activities should not be ineligible for CRA credit because they do not benefit only low or moderate income individuals.

If these types of regulatory changes are not made community banks will become a thing of the past. Bank's like mine will opt to sell out rather than work with the overwhelming regulatory burden being placed on us today. The loss of the community bank on small towns would be devastating to the local economies. By easing the regulatory burden, it will make it easier for community banks like mine to continue to provide committed service to local communities that few other financial service providers are willing to do.

Thank you for taking the time to read my thoughts.

Sincerely,
David A. Kinchler
President & CEO
Reliance Bank, Athens, AL