Green
Belt Bank & Trust
From: Steven Afdahl
Sent: Monday, March 22, 2004 12:44 PM
To: Comments
Subject: Comments on CRA Revisions
Steven Afdahl
PO Box 790
Iowa Falls, IA 50126
March 22, 2004
Dear Mr. Feldman FDIC:
I am writing
on behalf of Green Belt Bank & Trust, a state-chartered
bank
with $140,000,000 in total assets located in Iowa Falls, Iowa. Our
customer base is primarily agriculture-based with moderate income
levels.
Our lending activities are diversified among agricultural, farm real
estate, commercial, commercial real estate, consumer, and residential
real
estate lending. Our current loan portfolio is $102,000,000 and represents
approximately 82% of deposits. We applaud and appreciate the proposed
amendments to the Community Reinvestment Act being made by the Office
of
Comptroller of the Currency, Federal Reserve Board, Federal Deposit
Insurance Corporation and Office of Thrift Supervision, “the
Agencies.” We also appreciate the Agencies’ recognition
and
understanding of the challenges faced by community banks in meeting
the
requirements of the ever-growing number of compliance regulations.
Increasing the asset size of banks eligible for the small bank CRA
exam
from $250 million to $500 million and eliminating the holding company
size
limitations will go along way in reducing the regulatory burden of
many
small banks, including my institution. It is ridiculous to compare
a bank
with a few branch locations and total assets of $250 million to a
bank
with hundreds of locations and billions of dollars in assets under
the
same exam process. Small banks simply do not have the resources (money,
manpower, technology) to compete with these large institutions under
the
large bank test. Too many times a community bank, that has served
its
local community well, is not afforded the recognition it deserves
simply
because it is compared with huge multi-million dollar organizations.
Just
as the community investment abilities of small and large banks differ,
so
do the needs of the small and large communities they serve. The ripple
affect of smaller dollar projects in a rural community may far outweigh
a
multi-million dollar investments’ impact a metropolitan
area, yet
the small community bank’s CRA rating often does not reflect
this.
The reporting requirements under the large bank CRA exam process
are
staggering for a small bank. Under the current rules, due to our
state’s rural population an institution may not be a HMDA
reporter
because it is not located in a MSA, could still be subject to the
large
bank CRA test and data collection due solely to having assets in
excess of
$250 million. While community banks still must comply with the general
requirements of CRA, this asset-size increase will eliminate some
of the
most problematic and burdensome elements of the current CRA regulation.
I also support the elimination of the bank holding company asset
size
threshold. Many banks maintain their own charter, management and
operational processes when purchased by a large holding company.
They
&
#8220;inherit” the regulatory requirements of the holding
company
but do not always benefit from the holding company’s resources
for
complying with these requirements.
Increasing the size of banks eligible for the small-bank streamlined
CRA
exam does not relieve banks from CRA responsibilities. The growth
and
survival of the bank is intertwined with the growth and survival
of the
community. The change merely reduces the reporting requirements and
costs
for small bank, freeing up more time and money that can be better
spent in
service to the community the bank is located.
Today’s
community banks are drowning in regulatory red tape,
utilizing valuable resources to meet regulatory compliance mandates
that
could be put to much better use for economic and community development
purposes in the communities they serve. Thank you for recognizing
this
and proposing the changes to the Community Reinvestment Act.
Sincerely,
Steven L. Afdahl
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