Federal Deposit
Insurance Corporation

From: Bassett, Lawton [mailto:lawton.bassett@abcbancorp.com]
Sent: Tuesday, October 19, 2004 4:54 PM
To: Comments
Cc: 'psmith@aba.com'
Subject: FDIC Proposed CRA changes - RIN No. 3064-AC50
Importance: High

I am Lawton Bassett, President of Citizens Security Bank located in Tifton, Georgia with branches in Ocilla and Douglas, Georgia. Our CRA Assessment Area consists of Tift, Irwin, and Coffee Counties. The population of these counties are Tift County 38,407, Irwin County 9,931, and Coffee County 37,413. Citizens Security Bank has assets of $161,293 but is classified as a large bank under CRA because it is owned by ABC Bancorp, a holding of over $1 billion in assets. This letter is to inform you that I strongly support the FDIC's proposal to raise the threshold for the small bank CRA examination to $1 billion without regard to the size of the bank's holding company. The regulatory burden that small banks are under due to the current regulation is massive and would be reduced substantially under this proposal. I believe in the Community Reinvestment Act and support its underlying principles of serving the deposit and credit needs of everyone in our communities especially those of low- and moderate-income. However, under the tremendous requirements of loan coding, and paperwork required under the large bank examination criteria we are hindered from carrying out the original purpose of CRA. The time involved in data entry and paperwork could be better spent in customer service if we were not under the large bank requirements.

Furthermore, I support the proposal to add a community development criterion to the small bank examination for larger community banks. I believe it will be a great improvement over the investment test. However, I would ask the FDIC to apply the new community development criterion to banks greater than $500 million up to $1 billion. This would make the CRA threshold appropriate to today's overall industry percentages which have changed in the 10 years since the revised CRA regulations were enacted. The FDIC examiners that have been to our bank have agreed that it is extremely difficult for our small bank, with all offices located in a rural areas, to find CRA qualified investments in our communities. We have had to resort to regional investments that in all probability will never benefit our own communities. I do not believe that is in keeping with the intent of CRA. I am very much opposed to the idea of making the community development criterion a separate test from the bank's overall CRA evaluation. In our small bank community development lending is not very different from the credit we offer to the entire community. The current small bank test considers the institution's overall lending in its community. Adding a category of community development lending would enhance the concept of serving the whole community. A separate test would defeat the purpose of streamlining the exam.

Lastly, I support the FDIC's proposal to change the definition of "community development" from only focusing on low- and moderate-income area people to including residents of rural areas. However, that definition should lean toward residents that could benefit from CRA and not just higher income residents of rural areas. We make loans to owners of small farms in our assessment area because the farms are vital to our communities. We find that though the loans may sometimes be risky due to the nature of farming we feel it is necessary to help in the development of our rural communities.

I believe the FDIC proposal discussed herein will be a great improvement in the CRA regulations. This improvement will be in keeping with the meaning of the Community Reinvestment Act and I urge the FDIC to adopt its proposal. I will be glad to discuss any of these issues further with you.

Sincerely,

Lawton Bassett
President
Citizens Security Bank