Marlborough Savings Bank
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Dear Mr. Feldman,
As a community banker, I strongly endorse the federal bank regulators'
proposal to increase the asset size of banks eligible for the small
bank streamlined Community Reinvestment Act (CRA) examination from
$250 million to $500 million. This proposal will greatly reduce
regulatory burden. I am the Senior Vice President, Retail Banking
of Marlborough Savings Bank, a $258 million mutual savings bank
located in Marlborough, Massachusetts.
The small bank CRA examination process was an excellent innovation.
As a community banker, I applaud the agencies for recognizing that
it is time to expand this critical burden reduction benefit to larger
community banks. Expansion of the streamlined exam at this critical
time for the economy, this will allow more community banks to focus
on what they do best-fueling America's local economies. While we
certainly welcome growth, our passing of the $250 million mark late
last year was an event of mixed feelings. While we loved passing
this milestone asset size, the thought of no longer qualifying for
the streamlined CRA exam was quite unpleasant. When a bank must comply
with the requirements of the large bank CRA evaluation process, the
costs and burdens increase dramatically. And the resources devoted
to CRA compliance are resources not available for meeting the credit
demands of the community.
Adjusting the asset size limit also more accurately reflects significant
changes and consolidation within the banking industry in the last
10 years. To be fair, banks should be evaluated against their peers,
not banks hundreds of time their size. The proposed change recognizes
that it's not right to assess the CRA performance of a $500 million
bank or a $1 billion bank with the same exam procedures used for
a $500 billion bank. Large banks now stretch from coast-to-coast
with assets in the hundreds of billions of dollars. It is not fair
to rate a community bank using the same CRA examination. And, while
the proposed increase is a good first step, the size of banks eligible
for the small-bank streamlined CRA examination should be increased
to $2 billion, or at a minimum, $1 billion.
Ironically, community activists seem oblivious to the costs and burdens.
And yet, they object to bank mergers that remove the local bank from
the community. This is contradictory. If community groups want to
keep the local banks in the community where they have better access
to decision-makers, they must recognize that regulatory burdens are
strangling smaller institutions and forcing them to consider selling
to larger institutions that can better manage the burdens.
Increasing the size of banks eligible for the small-bank streamlined
CRA examination does not relieve banks from CRA responsibilities.
Since the survival of many community banks is closely intertwined
with the success and viability of their communities, the increase
will merely eliminate some of the most burdensome requirements.
In summary, I believe that increasing the asset-size of banks eligible
for the small bank streamlined CRA examination process is an important
first step to reducing regulatory burden. I also support eliminating
the separate holding company qualification for the streamlined examination,
since it places small community banks that are part of a larger holding
company at a disadvantage to their peers. While community banks still
must comply with the general requirements of CRA, this change will
eliminate some of the most problematic and burdensome elements of
the current CRA regulation from community banks that are drowning
in regulatory red-tape. I also urge the agencies to seriously consider
raising the size of banks eligible for the streamlined examination
to $2 billion or, at least, $1 billion in assets to better reflect
the current demographics of the banking industry.
Sincerely,
Jeffrey Dale
Sr. Vice President, Retail Banking
Direct Line 508-460-4115
Fax 508-485-3657
http://www.marlboroughsavings.com/ecards/jdale.htm
Marlborough Savings Bank
" You'll Enjoy the Difference"
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