Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official. 
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
Https
The site is secure. 
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
Federal Register Publications

FDIC Federal Register Citations



Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations




FDIC Federal Register Citations

TAMALPAIS BANK

October 4, 2004

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

Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold for the Small Bank CRA Streamlined Examination

Dear Sir or Madam:

I am the Senior Vice President, Senior Credit Officer and CRA Officer of Tamalpais Bank. We are located in the San Francisco Bay Area in Marin County with our main office in San Rafael, CA. Our asset size was $268 million as of December 31, 2002, $301 as of December 31, 2003 and $405 million as of August 31, 2004.

A Community Reinvestment Act Performance Evaluation was conducted by the FDIC as of June 7, 2004. We were evaluated using small bank procedures. Although we were a large bank for 2004, we were not evaluated as a large bank because we have not collected at least one year of loan data. Tamalpais Bank’s CRA Rating was Outstanding.

I am writing to strongly support the FDIC’s proposal to raise the threshold for the streamlined small bank CRA examination to $1 billion without regard to the size of the bank’s holding company. This would greatly relieve the regulatory burden imposed on many small banks such as my own under the current regulation, which are required to meet the standards imposed on the nation’s largest $1 trillion banks. I understand that this is not an exemption from CRA and that my bank would continue to help meet the credit needs of its entire community and be evaluated by the FDIC.

I also support the addition of a community development criterion to the small bank examination for larger community banks. It appears to be a significant improvement over the investment test. However, I urge the FDIC to adopt its original $500 million threshold for small banks without a community development criteria and only apply the new community development criterion to community banks greater than $500 million up to $1 billion. Banks under $500 million now hold about the same percent of overall industry assets as community banks under $250 million did a decade ago when the revised CRA regulations were adopted, so this adjustment in the CRA threshold is appropriate.

I believe adopting the FDIC’s proposal would significantly lower my bank’s current regulatory burden. I have reached this conclusion over the last several years during which time I have explored the requirements for large bank criteria. I have attended CRA conferences including the Community Redevelopment Conference in Hollywood in March of 2004. I also attend the annual CBA Compliance Conferences which include CRA. Additional understanding was reached during the recent CRA examination when Nancy Meuret, the Examiner in Charge, was very helpful in discussing the CRA requirements for a large bank. We are in the process of completely reorganizing our CRA program and have begun a massive new reporting and monitoring program. We are seeking investment opportunities. Implementation has to be accomplished with a total of 47 employees including staff for 5 branches. It would be much more advantageous to the community and the bank to redirect our efforts into areas that would further benefit our community.

Under the FDIC’s proposals, we would be able to mix community development loans, services and investments to meet the new community development criteria. This would be far more appropriate to the size of the bank and far better than subjecting the community bank to the same large bank examination that applies to $1 trillion banks. This more graduated transition to the large bank examination is a significant improvement over the current regulation.

I strongly oppose making the community development criteria a separate test from the bank’s overall CRA evaluation. For a community bank, community development lending is not significantly different from the provision of credit to the entire community. The current small bank test considers the institution’s overall lending in its community. The addition of a category of community development lending and services to aid lending and investments as a substitute for lending fits well within the concept of serving the whole community. A separate test would create an additional community development obligation and regulatory burden that would erode the benefit of the streamlined exam.

Banks would be required to engage in activities that meet credit needs in their assessment areas but could balance their community development lending, investing and service activities based on the opportunities in the market and the bank’s own strategic strengths. A community bank could perform well under the community development criterion by engaging in one or more as opposed to all of the activities. Tamalpais Bank’s performance in the Public Disclosure states that the bank is a leader in making community development loans, particularly in Enterprise Zones. This is an example of performance by a small bank which utilized the bank’s strategic strengths and which includes small business loans and community development loans.

Keeping the focus of small institutions on lending, which the small institution examination does, would be entirely consistent with the purpose of CRA which is to ensure that the Agencies evaluate how institutions help to meet the credit needs of the communities they serve.

The proposals by the FDIC enhance the effectiveness of the CRA regulations and CRA evaluations. The proposals would not diminish in any way the obligation of the bank to meet the credit needs of the community. Rather, the proposal would improve the effectiveness of CRA evaluations by permitting banks to focus on community development activities based on the opportunities in the market and the needs of the community.

In conclusion, I believe that the FDCI has proposed a major improvement in the CRA regulations, one that much more closely aligns the regulations with the Community Reinvestment Act itself and which would result in improved bank performance and greater benefit to the community. I urge the FDCI to adopt its proposal, with the recommendations above. I would be pleased to discuss these issues further with you, if that would be helpful.

Sincerely,
Jean Silveira
Senior Vice President
Senior Credit Officer, Community Reinvestment Officer
Tamalpais Bank
851 Irwin St., San Rafael, CA 94901

Last Updated 10/12/2004 regs@fdic.gov

Last Updated: August 4, 2024