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Redding Bank of Commerce
April 2, 2004
Robert E. Feldman, Executive Secretary
ATTN: Comments
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
RE: CRA proposal to increase threshold for small bank eligibility
Dear Sir:
I am the CRA Officer for Redding Bank of Commerce, located in
Redding, California, with total assets of approximately $400 million. 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. This will greatly reduce the regulatory burden
placed on our Bank.
When we crossed the threshold from small to large bank it placed a
great deal of pressure on us to comply with reporting requirements of a
large bank. I have estimated that the increased reporting required of
large banks requires us to spend an additional 250 man hours ($25,000 at
$100 per hour) a year plus the cost of having the reports analyzed by an
third party, an additional $2,000. These additional costs only represent
the loan reporting requirement of large bank CRA. We have also spent
numerous hours (approx 50) researching investments. CRA qualified
investments are especially difficult to find in small communities. This
does not take into account the time the service requirements could take
to document what we do as a business bank. These additional requirements
do not provide any supplemental benefit to our Bank's CRA goal of
meeting the business credit needs of the communities we serve.
Increasing the asset size of banks eligible for small bank CRA
examinations does not relieve us from our CRA responsibilities. It will,
however, allow the bank to better allocate its limited resources in
meeting our CRA responsibilities. While community banks still must
comply with the general requirements of CRA, this change will eliminate
some of the most burdensome elements of the large bank reporting
requirements of the regulation.
Sincerely,
Larry Sterk
Vice President
Redding Bank of Commerce
1177 Placer St
Redding, CA 96001
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