Heritage Bank
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street N.W.
Washington DC 20429
RE: CRA COMMENT LETTER
Dear Sir:
I write today on behalf of Heritage Bank to support conceptually
what the CRA NPR is attempting to do. However, we respectfully offer
the following viewpoints in opposition to the proposed rule.
1. Moving the
small bank threshold to $500MM is not enough; it should be moved
to at least
$1 billion in assets instead. Banks from $500MM
up to $1 billion in assets are very much still “small banks” in
today’s banking environment and the rules need to reflect that
fact. The big are getting bigger, the small independent banks are
disappearing, and those of us who are left in the middle will survive.
It is not reasonable to subject a Wells Fargo-size institution and
a $500-999MM asset-size institution to the same requirements. First,
the requirements are unwarranted. As a community bank, we continually
seek out credit opportunities. If we didn’t, we wouldn’t
exist. Second, the large bank CRA rules, especially those related
to reporting requirements, are too burdensome for even banks in the
$500-999MM size range to comply with as our technology cannot accomplish
this reporting. The result? Increased overhead cost thus increased
cost of credit to the communities we all serve; more bank time spent
reporting, less time spent lending, developing and educating our
communities.
2. Data “enhancement” translates into more workload.
As I stated above, more overhead is not conducive to what CRA is
trying to accomplish. In rural areas such as where Heritage Bank
operates, measuring where loans are originated, size of borrowers,
etc. is all rather a moot point. Please be very mindful of the reporting
burden in rural areas. At what point do community bankers throw their
hands in the air and sell out? How big do you want the Wells Fargo’s
of the world to get? Does that improve the availability of credit
in rural areas? No.
3. Relative to the investment test, I am aware of very few qualifying
opportunities that have existed in the markets we serve simply because
most projects are not designated solely to meet LMI needs. Use this
opportunity to modify the definition to include any economic or community
development project as those too benefit LMI areas and persons. Communities
will benefit.
4. Who was it that wrote, “Oh the tangled web we weave”?
That certainly applies to the notion of factoring into a bank’s
CRA rating its level of compliance with existing consumer protection
regulations. Keep everything in it’s own jurisdiction – each
has its merits and should be evaluated as such.
Thank you for your consideration of these comments as you prepare
the Final Rule.
Sincerely,
Sara Arnett, Compliance Officer
Heritage Bank
Wood River, NE
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