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VIRGINIA BANKERS ASSOCIATION
March 18, 2004
Communications Division
Public Information Room, Mailstop 1-5
Office of the Comptroller of the Currency
250 E St. SW,
Washington 20219
Docket No. 04-06
Docket No. R-1181
Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington DC 20551
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429
Regulation Comments, Attention: No. 2004-04
Chief Counsel's Office
Office of Thrift Supervision
1700 G Street NW
Washington DC 20552
Re: Community Reinvestment Act Regulations; Joint Notice of Proposed
Rulemaking, February 6, 2004
Dear Sir/Madam:
I am writing on behalf of the Virginia Bankers Association (the
"VBA") to comment on the above proposal. The VBA represents the
interests of approximately 160 banks and thrifts doing business in the
Commonwealth of Virginia.
The VBA commends the federal banking agencies for proposing to expand
the number of banks and thrifts (hereinafter collectively referred to as
"banks") eligible for the streamlined "small institution" examination
standards. Currently, only those institutions with less than $250
million in assets that are either independent or affiliated with a
holding company with less than $1 billion in assets qualify for this
streamlined approach. Your proposal would increase the asset size
threshold to $500 million, and eliminate the holding company
restriction.
We applaud the agencies for recognizing that growth and consolidation
in the banking, industry necessitate an increase in the small bank limit
under the regulations. And we agree that there is no justification for
treating small banks that are part of a holding company any differently
than independent small banks; small banks with a holding company do not
find addressing their CRA responsibilities any less burdensome than
similarly situated banks without a holding company.
We would, however, urge the agencies to increase the threshold to $1
billion instead of $500 million. Placing the threshold at $1 billion
would not impact the vast majority of bank assets, which, because they
are held by large institutions, will still be subject to the full CRA
examination process. But it would increase the number of smaller
institutions that are relieved of unnecessary regulatory burden. As your
notice indicates, the compliance burden on institutions just above the
threshold, measured as a cost of compliance relative to asset size, is
generally proportionally higher than the burden on institutions far
above the same threshold. Accordingly, we believe the agencies should go
further to relieve the compliance burden by increasing the asset
threshold to $1 billion.
We emphasize that our member banks are incurring significant costs in
CRA compliance that many of their competitors (e.g., credit unions) are
not. We therefore believe it is very important for the agencies to do
all they can to minimize the burdens associated with CRA. We appreciate
the opportunity to comment on this important proposal.
Sincerely,
Walter C. Ayers
Executive Vice President
Virginia Bankers Association
Richmond, VA
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