Federal Deposit
Insurance Corporation

North Dakota Department of Financial Institutions

October 1, 2004

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

RE: RIN Number 3064-AC50-FDIC Proposed Increase in the Threshold for the Small Bank CRA Streamlined Exam

Dear Mr. Feldman:

I am Commissioner for the North Dakota Department of Financial Institutions and have the responsibility of direct supervision over 87 state-chartered banks in the State of North Dakota. Overall North Dakota has 103 FDIC "insured institutions of which 13 are national banks, 3 savings associations, and again, 87 state-chartered institutions. As of June 30, 2004, there was approximately $18,837,000,000 in assets in the State of North Dakota, of which $7,659,350,000 was associated with state-chartered institutions. I strongly support the FDIC's proposal to increase the asset size limit of banks eligible for the streamlined small bank CRA examination, along with the elimination of the separate holding company qualification.

I am a strong promoter in reducing the regulatory burden on all banks in the United States and feel that by increasing the small bank' definition to $1 billion will be a big step forward in accomplishing this. goal. Furthermore, I do not believe any individual or community will be harmed by increasing this limit, as I personally believe North' Dakota bankers have strived to build their communities by making loans and promoting economic development. It is also important to remember that even if this threshold is raised,) banks will still be examined for their community reinvestment efforts and will still have to meet certain lending tests. If banks do not continue to invest in their communities, they will not remain viable or grow and it will be very difficult for the bank to survive or sustain economic growth.

I believe by increasing the threshold it will reduce the regulatory burden along with reducing the cost for compliance and these savings can be used to invest in their communities further in the future. The largest state-chartered institution in North Dakota has just surpassed $1 billion in total assets. When evaluating this bank for its CRA requirements, it does not seem fair to compare them with $500 billion to $1 trillion banks in size.

I am also aware that the few banks in our state that have to comply with the larger banks' CRA examination are having difficulties finding qualified investments for CRA purposes. In certain circumstances, banks have had to go beyond their normal trade area to find these investments which takes away funds from their local communities.

Thank you for the opportunity to express my views in support of raising the threshold to $1 billion for the size of institutions eligible for the small bank CRA examination.

Sincerely

Timothy J. Karsky
Commissioner