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FIRST BANK AND TRUST CO.
From: Shannon Contreras [mailto:SContreras@1stbanknet.com]
Sent: Tuesday, September 14, 2004 9:26 AM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
I am writing in response to the notice of proposed rulemaking
relating to the CRA that would change the definition of small bank by
raising the asset size threshold to $1 billion; add a community
development activity criterion to the evaluation method for small banks
with assets between $250 million and up to $1 billion; and expand the
definition of community development to include a broader range of
activities in rural areas.
Our institution has $267 million in total assets as of December 31,
2003. We reached $250 million in total assets in September of 2001
therefore, under current definitions, we are now a CRA “large
institution”. Our main office is in Duncan, Oklahoma and we have several
other banking centers in Ardmore, Healdton, and Norman, Oklahoma as
well.
I am pleased that FDIC is entertaining an increase of $1 billion
rather than $500 million. In my comment letter earlier this year
regarding the initial NPR I requested that you consider the $1 billion
increase as we are surrounded by larger statewide banks all with over $1
billion in total assets in all of our markets. I am very much in support
of this threshold increase and would welcome the decrease in the burden
of data collection and reporting of our CRA loans. However, another
aspect of the current large bank examination that includes credit for
qualified investments and loans was a big concern for banks such as
ourselves who fall between the $250 million and $1 billion asset size. I
feel that the community development criterion being added to the now
streamlined small bank examination will remain to put banks caught in
this asset size on an uneven playing field when trying to compete with
banks that have assets in excess of the $1 billion mark. Regulatory
burden relief is one concern but uneven competition for community
development credit is another concern that does not appear to be
addressed in this NPR. I would encourage the FDIC to consider this more
fully.
Expanding the definition of community development to encompass a
broader range of activities in rural areas could be of benefit to our
particular institution as we are in Southwestern Oklahoma and without
having to submit small farm lending on a loan register, assuming that a
$1 billion threshold increase is passed, we might gain some community
development loan credit in this area. Which brings me to the point that
although many community groups feel that this NPR is relaxing the CRA
and will eventually cause many banks to fail the community in terms of
meeting credit needs, this will actually allow our institution to funnel
the same loans and investments that we are making anyway into an actual
community development purpose rather than merely a line item on a loan
register.
When weighing the concerns of community groups that feel that
loosening the large bank CRA burden will cause banks to pull out of
community projects you must look past that and on to the credit unions,
financial centers, insurance companies, and even the housing developers
(many of whom incorporate their own financing methods) that do not have
to comply with the CRA. If there are going to be abusive lending
situations it is going to be through these organizations who are
aggressively seeking our traditional financial institution customers and
when these consumers find that they do not have many of these federal
banking regulations to protect them they will become vocal to the
community groups. Therefore, if the community groups have issues
trusting the banking industry then they need to be very suspicious of
the credit unions, et al.
Our financial institution has received three previous “outstanding”
CRA ratings under the current small bank exam method and we are
preparing for our first large bank examination. We have always had a
strong commitment to fulfill the requirements of the CRA and our asset
size will not change that. Regardless of the result of this NPR, we will
continue to provide services, loans, investments, and assistance
throughout our assessment areas, provide innovative and flexible credit
programs, and give back to all of our communities.
Thank you for the opportunity to comment on this NPR.
Sincerely,
Shannon Contreras
CRA Administrator
First Bank and Trust Co.
P.O. Box 580
Duncan, OK 73534
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