FDIC Federal Register Citations

September 16, 2004

Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Dear Mr. Feldman:

As an employee of a $130 million community bank and as a board member of the Independent Bankers of Colorado, I hereby express my support, along with our management team, for the FDIC to raise the threshold for the streamlined small-bank CRA examination to $1 billion. The proposed threshold is without regard to the size of the bank's holding company.

It makes no sense to us why a small community ;bank should have to meet the same standards as our nation's largest banks. The proposed threshold amount will provide much needed relief from the already regulatory burden imposed on our small rural banks that make every effort to meet the financial needs of their communities.

We also support the addition of a community development criterion to the small bank examination but only for banks between $500 million and $1 billion. As you know it is quite difficult for our small rural banks to find appropriate CRA qualified investments in their communities, and it certainly does not benefit the communities they serve if the bank must make regional and statewide investments. This adjustment to the CRA threshold is appropriate inasmuch as the percent of industry currently held by community banks with assets of $50 million to $500 million is basically the same as what banks of $250 million had a decade ago.

The new community development criterion shOuld not be a separate test from the bank's overall CRA evaluation. A separate test would only erode the intent of the streamlined exam.

Our bank strongly supports the FDIC's proposal to change the definition of "community development" from only focusing on low and moderate-income area residents to including rural residents. This change will assist in eliminating the current distortions in the regulations that result in a small rural bank being told to invest in regional affordable housing bonds for an urban area not in the bank's community.

Thank you for considering our views on this important matter.

Respectfully,

Gary W. Betts, President
Fremont National Bank