Federal Deposit
Insurance Corporation

Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: Community Reinvestment, RIN number 3064-AC50;
Proposal to Expand Eligibility for the Streamlined CRA Exam

Dear Mr. Feldman:

As a community banker, I join my fellow community bankers throughout the nation in support of the FDIC’s proposal to increase the asset size limit of banks eligible for the streamlined small-bank CRA examination. I also strongly support the elimination of the separate holding company qualification.

The proposal will greatly alleviate unnecessary paperwork and examination burden without weakening our commitment to reinvest in our communities. North Shore Bank is a $380 million institution with an “Outstanding” CRA rating from the FDIC. Reinvesting in our communities is something we do everyday as a matter of good business. My community bank will not long survive if my local community doesn’t thrive, and that means my bank must be responsive to community needs and promote and support community and economic development.

Making it less burdensome to undergo a CRA exam by expanding eligibility for the streamlined exam will not change the way my bank does business. In fact, it will free up human and financial resources that can be redirected to the community and used to make loans and provide other services.

It is important to remember that the streamlined CRA exam is not an exemption from CRA. It is a more cost effective and efficient CRA exam. Banks subject to the simplified CRA exam are still obligated to comply with CRA. Just as now, community banks would continue to be examined to ensure they lend to all segments of their communities, including low- and moderate-income individuals and neighborhoods.

One of the problems with the current large bank CRA exam is that the definition of “qualified investments” is too limited, and qualified investments can be difficult to find. As a result, many community banks have to invest in regional or statewide mortgage bonds or housing bonds and the like to meet CRA requirements. Community banks and their communities would be better off if the banks could truly invest those dollars locally to support their own local economies and residents.

I find that the FDIC’s proposed community development criterion for banks between $250 million and $1 billion is more flexible and more appropriate than the large bank investment test. It would let community banks pursue community development activities that both meet the local community’s needs and make sense in light of the bank’s strategic strengths. However, the proposed criterion should not be an additional test for banks between $250 million and $1 billion, but rather a means for banks to obtain an “outstanding” rating by investing in their community in a manner that makes sense.

Thank you for considering my views.

Sincerely,
Louise Slattery
Vice President/Director of Corporate Governance
North Shore Bank, A Co-operative Bank
32 Main Street
Peabody, MA 01960
978-538-7004