Federal Deposit
Insurance Corporation

San Joaquin Bank
1000 Truxtun Avenue
Bakersfield, CA 93301
(661)281-0360

October 12, 2004

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

Sent via email: comments@fdic.gov

Re: CRA Regulatory Review – RIN 3064-AC50

Dear Sir:

First, I am writing to support FDIC’s proposal to increase the asset size for the small bank streamlined CRA examination from $250 million to $1 billion. This increase in the asset size for small bank treatment would remove an unfair burden that was placed on smaller community banks and it would be a significant step toward achieving the very goals for which CRA was created.

With regard to the issue of fairness, it is clearly unfair on its face to establish a series of examination criteria that apply equally to a local community bank with three or four branches and to a multi-billion dollar, multi-national megabank with a 1,000 branches or more. While the local community bank is struggling to meet the requirements of an ever-increasing burden of regulatory policies, rules and guidelines, the megabanks already have entire departments in place to do nothing but compliance, including CRA. In our bank, for example, we have added an additional staff person to help take on the added workload of monitoring, documenting and reporting data on small business and small farm loans called for under the large bank CRA requirements. It is just inconceivable that our bank, at $485 million, is subject to the same CRA examination guidelines as Bank of America or Wells Fargo Bank.

With regard to achieving CRA goals, there is virtually nothing similar between our local community bank and the megabanks, other than the fact that we are both called “banks.” Our bank is and has always been focused on the local community, emphasizing involvement in local charitable and non-profit groups, participation in local redevelopment projects, funding SBA loans, loans to small farmers, loans to small and minority-owned businesses, and providing banking services to local neighborhoods and schools. We have achieved an “outstanding” rating in our last two CRA examinations, not because we were forced to support our local community, but because this is our home. We work and live right here in Kern County and Bakersfield and the future success of our bank rests squarely on the success of the business community and the people who also live and work here. That, in my opinion, is the very essence of CRA – helping to meet the financial needs of the individuals and small businesses in our community. Hiring additional staff personnel to fill out paperwork and file reports will do nothing to help us achieve this goal.

Secondly, I support FDIC’s proposal to add a new community development criterion to the small bank performance standards. As stated previously, as a local community bank, we are focused on meeting the financial needs of our entire community. Having the added flexibility in meeting the community-based lending, investment and service activities will enhance our ability to continue to meet our community responsibilities utilizing a broader range of activities, rather than being forced to focus on specific activities that may satisfy regulatory requirements but may not meet the exact needs of our community. Likewise, expanding the definition of community development to encompass a broader range of activities in rural areas fulfills the underlying purpose of CRA, in my opinion.

In conclusion, I ask that you permanently adopt raising the small bank CRA examination criterion from $250 million to $1 billion, that you permanently adopt the proposed new community development criterion for small banks, and that you permanently adopt the expanded definition of community development for rural banks. It is the right thing to do for the banking industry, it is the right thing to do for our local communities, and it is the right thing to do to further the ultimate goals of CRA.

Thank you for your kind consideration.

Sincerely,

Stephen M. Annis, CRP
Senior Vice President
Chief Financial Officer