FDIC Federal Register Citations

FARMERS STATE BANK

From: Larry Johnson [mailto:Larry_Johnson@fsbmail.net]
Sent: Monday, September 13, 2004 5:43 PM
To: Comments
Subject: RIN3064-AC50 (CRA)

Dear Mr. Feldman:

I appreciate being able to comment on your proposed changes to the Community Reinvestment Act (CRA).

In reviewing some of the comments already posted to your site, it is clearly expressed in most letters from community bankers that regulatory issues have placed a large burden upon our industry. USA PATRIOT Act, Check 21, CAN SPAM and FACTA are some of the new regulatory issues we have had to add to our workloads in just the past twelve months. In addition to that, we have had major changes to Regulation B and Regulation C along with minor changes to several other regulations. It is getting more and more difficult to keep up with the never-ending changes and data reporting requirements. And, as you can see by looking at several of the comment letters, compliance is often just one of the many "hats" community bankers wear. Many times compliance duties are in addition to lending, BSA, security and/or internal auditing. I feel strongly that it is time to give banks some relief. With that being said I would like to express my strong support for reducing the regulatory burdens of CRA on financial institutions and increasing the small bank asset size threshold from $250 million to $1 billion.

More than one comment letter submitted seemed to think that by reducing the number of banks examined under the large bank rules, those banks would suddenly be relieved of all requirements under CRA. And, that suddenly our support for the communities in which we live and work would cease. CRA is not being repealed here. No banker is disputing the importance of CRA. We know what our industry contributes is vital to our communities and that it must continue. Community banks will not survive if those communities don't thrive. However, banks could afford relief in the way of a less rigorous exam and eased reporting requirements. Ongoing costs of software and personnel required to maintain CRA data stretch already limited resources. This information is coded internally by most institutions and can be pulled if necessary instead of subjecting financial institutions to the excessive record keeping requirements of today. Also, many dwelling secured small business and small farm loans are covered and recorded under the new HMDA requirements. If the goal of some of those commenting here is to make everyone a homeowner, I encourage them to use their letter writing abilities to petition Congress to broaden CRA responsibilities by including credit unions and mortgage companies as well in order to make that dream a reality.

I applaud the FDIC for taking a leadership role and proposing this amendment to CRA.

Thank you,

B. Larry Johnson