Glenwood State Bank
From: Grant Dean
Sent: Thursday, March 25, 2004 10:47 AM
To: Comments
Subject: Comments on CRA Revisions
Grant Dean
Box 431
Glenwood, IA 51534
March 25, 2004
Dear FDIC:
I am writing on behalf of Glenwood State Bank, a state-chartered
bank
located in Glenwood, Iowa. Our customer base is primarily agricultural,
but is trending consumer as we are rapidly becoming a bedroom-community
to
Omaha, Nebraska with lending activities in agriculture, consumer
and real
estate. Our current asset size is $90,000,000 with a loan portfolio
of
$35,000,000. We applaud and appreciate the proposed amendments to
the
Community Reinvestment Act being made by the Office of Comptroller
of the
Currency, Federal Reserve Board, Federal Deposit Insurance Corporation
and
Office of Thrift Supervision, “the Agencies.” We also
appreciate the
Agencies’ recognition and understanding of the challenges faced
by
community banks in meeting the requirements of the ever-growing number
of
compliance regulations.
Increasing the asset size of banks eligible for the small bank CRA
exam
from $250 million to $500 million and eliminating the holding company
size
limitations will go along way in reducing the regulatory burden of
many
small banks, including my institution. It is ridiculous to compare
a bank
with a few branch locations and total assets of $250 million to a
bank
with hundreds of locations and billions of dollars in assets under
the
same exam process. Small banks simply do not have the resources (money,
manpower, technology) to compete with these large institutions under
the
large bank test. To many times a community bank, that has served
its
local community well, is not afforded the recognition it deserves
simply
because it is compared with huge multi-million dollar organizations.
Just
as the community investment abilities of small and large banks differ,
so
do the needs of the small and large communities they serve. The ripple
affect of smaller dollar projects in a rural community may far outweigh
a
multi-million dollar investments’ impact a metropolitan area,
yet the
small community bank’s CRA rating often does not reflect this.
Another factor making it very difficult (and unfair) for community
banks
is the competition they receive from Farm Credit, a GSE that competes
directly with banks, yet does not have the onerous and costly CRA
requirements.
Increasing the size of banks eligible for the small-bank streamlined
CRA
exam does not relieve banks from CRA responsibilities. The growth
and
survival of the bank is intertwined with the growth and survival
of the
community. The change merely reduces the reporting requirements and
costs
for small bank, freeing up more time and money that can be better
spent in
service to the community the bank is located.
Today’s
community banks are drowning in regulatory red tape, utilizing
valuable resources to meet regulatory compliance mandates that could
be
put to much better use for economic and community development purposes
in
the communities they serve. Thank you for recognizing this and proposing
the changes to the Community Reinvestment Act.
Sincerely,
Grant
C. Dean
Glenwood State Bank
Glenwood, IA
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