Federal Deposit
Insurance Corporation

West Alabama Bank & Trust
PO Box 310
Reform, AL 35481

October 15, 2004

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

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

Dear Sir or Madam:

I am a Senior Vice President and the Chief Financial Officer of West Alabama Bank & Trust, a $340 million state-chartered community bank with its main office located in Reform, Alabama. I am writing to strongly support the FDIC’s proposal to raise the threshold for the streamlined small bank CRA examination to $1 billion without regard to the size of the bank’s holding company. This would greatly relieve the regulatory burden imposed on many small banks such as my own under the current regulation, which are required to meet the standards imposed on the nation’s largest trillion dollar banks. I understand that this is not an exemption from CRA or evaluations by my regulator. My bank would help meet the credit needs of our communities even if there was no Community Reinvestment Act. Community involvement is a part of my bank’s mission statement and we strongly believe in contributing resources and leadership to help our communities thrive.

I also support the addition of a community development criterion to the small bank examination for larger community banks. I believe this would allow banks to structure their community development activities based on the opportunities in their markets. I feel it would be an improvement that would allow banks to meet their community development responsibilities by engaging in any one or a combination of community development activities rather than having separate tests for lending, investments and services.

Another reason I support the FDIC’s CD criterion is that it would reduce the current regulation’s “cliff effect.” Currently when a small bank goes over $250 million, the CRA program must be completely reorganized and begin massive new reporting and monitoring activities. If the FDIC adopts its proposal, a state nonmember bank would move from the small bank examination to an expanded but still streamlined small bank examination with the flexibility to mix Community Development loans, services and investments to meet the new CD criterion. This would be much more appropriate to the size of the bank and much better than subjecting the community bank to the same large bank examination that applies to trillion dollar banks. This more graduated transition to the large bank examination is a significant improvement over the current regulation.

I oppose making the CD criterion a separate test from the bank’s overall CRA evaluation. For a community bank, CD lending is not significantly different from the provision of credit to the entire community. A separate test would create an additional CD obligation and regulatory burden that would erode the benefit of the streamlined exam.

I believe that the FDIC has proposed a major improvement in the CRA regulation, one that much more closely aligns the regulations with the Community Reinvestment Act itself, and I urge the FDIC to adopt its proposal with the recommendations above.

Sincerely yours,
Rhonda W. Swedenburg, CPA
Senior Vice President & CFO
West Alabama Bank & Trust
Reform, Alabama