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FIRST SECURITY BANK
September 15, 2004
Mr.
Robert E. Feldman,
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit
Insurance Corporation
550 17th St. NW
Washington, DC 20429
Re: Community Reinvestment, RIN Number 3064-AC50;
Proposal to Expand Eligibility for the Streamlined CRA Exam
Dear Mr. Feldman:
As a community banker, I join my fellow community bankers
throughout the nation in strong support of the FDIC's proposal to
increase the asset size limit of banks eligible for the streamlined
small-bank CRA examination. I also strongly support the elimination
of the separate holding company qualification.
The proposal will greatly alleviate unnecessary paperwork and
examination burden. Reinvesting in our communities is something we do
everyday. My community bank will not
survive if my community doesn't thrive. My bank must be responsive to
community needs and promote and support development.
Making it less burdensome to undergo a CRA exam will free up resources
that can be redirected to the community for loans and
other services.
The streamlined CRA exam is not
an exemption from CRA. It is a more cost effective and efficient CRA
exam. It doesn't make sense to
evaluate a $500 million or $1 billion bank using the same exam
procedures as for $100 billion or $500 billion bank.
One of the problems with the current large bank CRA exam is the
definition of "qualified investments" is too limited. Qualified
investments can be difficult to find. As a result, many community banks
(especially those in rural areas) have to invest in regional or
statewide mortgage bonds or housing bonds to meet CRA requirements.
These investments actually take resources away from the bank's local
community. Community banks and communities would be better off if the
banks could truly reinvest those dollars locally to support their own
local economies and residents. The proposal will help rural banks meet
the special needs of their communities by expanding the definition of
"community development" to include activities that benefit rural
residents and low- and moderate-income individuals. Rural banks are
frequently called upon to support needed economic or infrastructure
development such as school construction, revitalizing Main Street, or
loans that help create needed or better-paying jobs. These activities
should not be ineligible for CRA credit because they do not benefit only
low- or moderate-income individuals.
The FDIC's proposed changes to CRA are needed to help alleviate
regulatory burden. Without changes such as this, more and more community
banks like mine will find they cannot sustain independent existence
because of the crushing regulatory burden, and will opt to sell out. For
many small towns and rural communities, the loss of the local bank is a
major blow to the local community. By easing regulatory burden, it will
make it easier for community banks like mine to continue to provide
committed service to local communities that few other financial service
providers are willing to do.
Thank you for considering my views.
Sincerely,
Matt W. Amundson
President
First Security Bank
Hendricks, MN
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