FDIC Federal Register Citations

Palos Bank and Trust

March 24, 2004

Ms. Leneta G. Gregorie
Legal Division
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429

Dear Ms. Gregorie:

This comment letter is in reference to FIL-15-2004 regarding Proposed Amendments to the Community Reinvestment Act (CRA) Regulations. I have been a community bank compliance officer for over twenty years and have lived through the evolution of the Community Reinvestment Act. This latest proposal to change the Act, raising the large-bank reporting threshold from $250 million to $500 million, is a step in the right direction. However, this step does not go far enough. As you state "This change would take into account substantial institutional asset growth and consolidation in the banking and thrift industries since the definition was adopted." There is a marked difference between a bank with $500 million in assets and banks with over $1 billion in assets. Typically, banks with $500 million in assets still function as community banks—they are hardly, in essence, similar to regional or 'large' banks.

My recommendation is that the definition of "small institution" mean an institution with total assets of less than $1 billion. The basic intent and spirit of CRA would not be compromised by this modification, however, the burden of $500 million banks competing with regionals and larger banks for loans and investments would be mitigated. The commitment of a $750 million bank to its community is no different than a $500 million, $250 million, or $30 million bank. A community bank is just that—dedicated to its 'community'.

Sincerely,

Catherine L. McKay
Vice President
Auditor and Compliance Officer
Palos Bank and Trust, Palos Heights, IL