Federal Deposit
Insurance Corporation

Central Bancompany

October 18, 2004

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

Re: RIN Number 3064-AC50

Dear Sir:

Please accept this letter in support of the FDIC’s proposal to raise the threshold for the streamlined small bank CRA exam to $1 billion.

My name is Richard Popp, Senior Vice President for Central Bancompany in Jefferson City, Missouri. Our company’s compliance function reports directly to me. We are a $6.5 billion community bank holding company with thirteen affiliate banks. Six of our banks have assets between $250 million and $1 billion and would be affected by the change in the threshold for the streamlined examination.

I would speak first to the regulatory burden on banks in general. Our company has fifteen full time employees whose job is primarily or entirely related to compliance management and auditing. Many other employees in line roles spend significant amounts of time related to compliance: training, preparation of documents, supervisory review, etc. This regulatory burden, while well-intentioned and – in most cases – helpful, increases our costs of providing banking services to the consumer. So the consumer pays the necessarily higher costs through higher fees, higher loan rates, or lower deposit rates. It often seems to me that we have harmed the consumer in this way (higher costs) more than we have helped through better consumer protection.

It is largely because of this general conclusion - that we are over-regulated - that any possibility of an incremental decrease in compliance costs, however small, has great appeal.

The question currently before the FDIC is whether to increase the threshold for a streamlined CRA exam from $250 to $1 billion. I am in strong support of this proposal. Some of the reasons for my support are as follows:

• As community bankers, we find that community reinvestment – defined broadly – is what we are all about. Every day we reinvest in our community. It is a part of who we are, both because it is the right thing to do, but also because it is a business necessity. We are judged by the residents of the towns where our banks are located by how much we help, for example, the local YMCA and the local hospital auxiliaries. Our citizens also know whether we are willing to loan money in low income areas and loan money to low income residents. We have to do this in order to survive and thrive. Locally owned, locally managed community banks invest far more in America’s small towns than large multi-state banks. That business necessity negates most of the need for external rules such as the CRA to mandate such investments.

• The specific rules of CRA are designed in such a way that some of our qualifying investments cannot even be made in our local community. So we invest outside our community, which is counter to the intention of the regulations.

• CRA is a significant regulatory burden. We would save a good portion of an FTE in each of the six affected banks if the regulatory threshold were to change. There would be less training, less time complying, less time documenting compliance, less time auditing, and less examination time. All of these time savings would benefit the bank financially with little or no incremental decrease in the extent to which we are serving our community.

In conclusion, I believe the FDIC recommendation would do meaningful good by making our banks more competitive with no measurable negative consequences. Thank you for the opportunity to have a voice in the decision regarding this regulatory change.

Sincerely,

Richard Popp, Sr. VP
Central Bancompany