Saratoga National Bank & Trust
Company
March 8, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington. DC 20429
Dear Mr. Feldman,
As a community banker, I strongly endorse the federal bank regulators'
proposal to increase the asset size of banks eligible for the small
bank streamlined Community Reinvestment Act (CRA) examination from
$250 million to $500 million and elimination of the holding company
size limit (currently $1 billion). This proposal will greatly reduce
regulatory burden. My bank is a $180 million institution that is
a member of a $1.3 billion holding company.
When a bank must comply with the requirements of the large bank
CRA evaluation process, the costs and burdens increase dramatically.
And the resources devoted to CRA compliance are resources not available
for meeting the credit demands of the community.
To be fair, banks should be evaluated against their peers, not banks
hundreds of times their size. The proposed change recognizes that
it's not right to assess the CRA performance of a $500 million bank
with the same exam procedures used for a $500 billion bank. Large
banks now stretch from coast-to-coast with assets in the hundreds
of billions of dollars. It is not fair to rate a community bank using
the same CRA examination.
Increasing the size of banks eligible for the small-bank streamlined
CRA examination does not relieve banks from CRA responsibilities.
Since the survival of many community banks is closely intertwined
with the success and viability of their communities, the increase
will merely eliminate some of the most burdensome requirements.
In summary, I believe that increasing the asset-size of banks eligible
for the small bank streamlined CRA examination process is an important
first step to reducing regulatory burden. I also support eliminating
the separate holding company qualification for the streamlined examination,
since it places small community banks that are part of a larger holding
company at a disadvantage to their peers. While community banks still
must comply with the general requirements of CRA, this change will
eliminate some of the most problematic and burdensome elements of
the current CRA regulation from community banks that are drowning
in regulatory red-tape.
Thank you for considering my thoughts on this issue.
Sincerely
Raymond O'Conor
President & CEO
Saratoga National Bank & Trust Company
Saratoga Springs, NY
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