Federal Deposit
Insurance Corporation

October 19, 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 the Small Bank CRA Streamlined Examination

Dear Sir or Madam:

My name is Tom Jensen, Vice President of Nicolet National Bank located in Green Bay, Wisconsin. Our bank is approximately $360MM in assets and recently crossed the threshold to be considered a large bank for CRA purposes. Our performance was evaluated by the Office of the Comptroller of the Currency in August of 2003 when we received an OUTSTANDING rating under the small bank examination procedures. I currently find myself (and the resources available to me) significantly strained as we gear up to report and be examined under the large bank examination procedures. Crossing the barrier to a large bank has done nothing to affect or alter our commitment to the communities we serve. Unfortunately, I cannot say the same thing about the regulatory burden we now face as a result of our growth.

I am writing to strongly support the FDIC's proposal (and hopefully a similar inter-agency 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. I understand that this is not an exemption from CRA and that my bank would still have to help meet the credit needs of its entire community and be evaluated by my regulator. However, I believe that this would lower my current regulatory burden by continuing to serve the needs of the community through action, rather than reporting and tracking costs.

We are currently in the process of evaluating vendors to help us with the data gathering and reporting aspects of being a “large bank”. As you can imagine, these solutions are not inexpensive and could cost in excess of $25,000 over the next five years. In addition, we are evaluating staff needed to input and track required reporting data, which, for our bank, could mean as many as 2 additional FTE’s at a significant cost to the bank.

I also 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. The current small bank test considers the institution's overall lending in its community. The addition of a category of CD lending (and services to aid lending and investments as a substitute for lending) fits well within the concept of serving the whole community. A separate test would create an additional CD obligation and regulatory burden that would erode the benefit of the streamlined exam.

While I understand that our bank (a national bank) is not directly examined by the FDIC, I encourage you to support the raising of the threshold as I think it benefits the industry as a whole. I will be forwarding this correspondence to the OCC as well in hopes that some type of interagency agreement can be reached.

Raising the threshold will not alter the way competitive institutions meet the credit needs of their communities. For those of us that have demonstrated our commitment to the communities we serve, leaving the threshold where it is only increases the regulatory burden at a cost to our customers.

Thank you for your consideration and taking the time to actually read all of the letters you are receiving on this issue. It is a critical issue that needs the support of forward-thinkers like yourself (and James Gilleran at the OTS).

Sincerely,
Thomas L. Jensen
Vice President
Nicolet National Bank
Green Bay, WI
(920) 617-5304