Brentwood Bank
From: John Cost [mailto:JCost@brentwoodbank.com]
Sent: Friday, September 17, 2004 9:29 AM
To: Comments
Subject: Community Reinvestment Act
As a community banker, I strongly support the FDIC's 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 small banks under the current regulation, which are required
to meet the standards imposed on the nation's largest $1 trillion
banks. Community banks would still be required to help meet the
credit needs of their entire community and would continue to be
so evaluated by their regulator.
I support the addition of a community development (CD) criterion
to the small bank examination, but believe the new CD should be applied
only to banks greater than $500 million. Since community banks under
$500 million now hold the same percent of overall industry assets
as community banks up to $250 million did 10 years ago when the revised
CRA regulations were adopted, this adjustment is appropriate. As
you are no doubt aware, it is extremely difficult for small banks,
especially those in the rural areas, to find appropriate CRA qualified
investments. Many of these banks have to make regional or statewide
investments that are unlikely to ever benefit their own communities.
I'm sure this wasn't the intention of Congress when they enacted
CRA.
I strongly oppose making the CD criterion a separate test from the
overall CRA evaluation. The current small bank test considers the
overall lending in the community. This separation would create the
impression that CD lending is different from the provision of credit
to the entire community and would create an additional CD obligation
and regulatory burden, thereby eroding the intent of the streamlined
exam.
I strongly support
the FDIC's proposal to change the definition of "community development" from
only focusing on low and moderate income area residents to including
rural residents. This
change will go a long way toward eliminating the current distortions
in the regulations that result in a small rural bank being told to
invest in regional affordable housing bonds for an urban area not
in their community.
Thank you for your consideration.
John Cost
Loan Administration Officer
Brentwood Bank
411 McMurray Road, Suite 200
Bethel Park, PA
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