Grafton
State Bank
March 11, 2004
Robert E. Feldman, Executive Secretary
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. I am the President of Grafton State Bank, a
$165 million community bank, located in Grafton, Wisconsin.
The small bank
CRA examination process was an excellent innovation. As a community
banker, I applaud the agencies for recognizing that
it is time to expand this critical burden reduction benefit to larger
community banks. At this critical time for the economy, this will allow
more community banks to focus on what they do best-fueling America's
local economies. 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.
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. I also urge the agencies to seriously consider raising the
size of banks eligible for the streamlined examination to $2 billion
or, at least, $1 billion in assets to better reflect the current demographics
of the banking industry.
Sincerely
Jefford Larson
President
Grafton State Bank
101 Falls Road
Grafton, WI
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