FDIC Federal Register Citations

Cheryl Nogueira
4 South Main St.
Fall River, MA 02721-5327

October 15, 2004

Robert E. Feldman

Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Dear Robert Feldman:

I am a community banker and I wish to express my strong support of the
FDIC’s proposal to increase the asset size limit of banks eligible
for the streamlined small-bank CRA examination to $1 billion. I also
strongly support the elimination of the separate holding company
qualification.

The proposal will greatly reduce regulatory burden for community banks
eligible for the smaller institution examination without weakening our
commitment to reinvest in our communities. Reinvesting in our communities
makes good business sense. Making these regulatory exams more streamlined
will not change the way community banks do business or reduce the volume
of loans. Rather, it will free up human and financial resources that can
be redirected to the community and used to originate loans and provide
other services.

Under the more streamlined CRA exam, community banks would still be
required to lend to all segments of their communities, including low-and
moderate-income individuals and neighborhoods and would continue to be
evaluated by their regulator for compliance. The regulation, if
implemented will decrease regulatory burden in terms of both cost of
compliance and the man-hours needed to comply with the current large bank
procedures. It is unfair to evaluate a $500 million or $1 billion bank
using the same exam procedures as those used for a $100 billion or $500
billion bank.

The addition of a community development criterion to the small bank
examination for those banks over $500 million in assets is a significant
improvement over the present investment test. It is often extremely
difficult for small banks to find investments which meet the qualified
investment test and which are located in their own communities. As a
result, many community banks (especially those in rural areas) have to
invest in statewide or regional projects to meet CRA requirements. These
investments actually take resources away from the bank’s local
community. Also, the community development criterion should not be a new
stand alone test but part of the evaluation of a bank’s overall
lending to the community.

The FDIC’s proposed changes to CRA are a vitally important step in
revising and improving the CRA regulations and in reducing regulatory
burden. While community banks will still be examined under CRA for their
record of helping to meet the credit needs of their communities, the
expanded small bank test will eliminate some of the most problematic and
burdensome elements of the current CRA regulation for community banks that
have been subject to a myriad of new regulations in recent years.

Thank you for considering my views.

Sincerely,

Cheryl A. Roberts Nogueira