FDIC Federal Register Citations

From: Carole Marshall [mailto:Carole.Marshall@unitybank.com]
Sent: Thursday, September 23, 2004 10:37 AM
To: Comments
Subject: Community Reinvestment : Rin number 3064-AC50

As a community banker and compliance officer, 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.

The proposal will greatly alleviate unnecessary paperwork and examination burden without weakening our commitment to reinvest in our communities. Reinvesting in our communities is something we do everyday as a matter of good business. My community bank could not survive if my local community doesn’t thrive, my bank must be responsive to community needs and promote and support community and economic development.

We realize that the streamlined CRA exam is not an exemption from CRA. It just doesn’t make sense and is inequitable to evaluate a $500 million or $1 billion bank using the same exam procedures.

One of the problems with the current large bank CRA exam is that the definition of “qualified investments” is too limited and qualified investments can be difficult to find. Many community banks have to invest in regional or statewide mortgage bonds or housing bonds and 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.

Our bank participates in many community development activities that do not qualify for credit. It would benefit the bank and the community by expanding the definition of “community development” so that it includes activities that benefit all residents in addition to low and moderate income individuals. Community bank are frequently called upon to support economic or infrastructure development such as school construction, revitalizing Main Street or loans that help create needed or better paying jobs. Community Banks are required to give grants and donations to various non-profit charitable organizations that currently do not qualify for CRA credit. Donations for medical assistance and research such as walks for March of Dimes, MDA, Cancer and participating in blood bank drives should qualify. Also, donations to schools for scholarships, Girl/boy scouts groups and educational tours of the bank for children. Financial education should qualify for all children and adults who request it. The time frame for Employee volunteer work should be expanded and should not be limited to work hours only. Our Community Bank participates in these activities and they 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 required to help alleviate regulatory burden. Without changes such as this, more and more community bank will find they cannot sustain independent existence because of crushing regulatory burden. By easing regulatory burden, it will make it easier for community bank 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.

Carole Marshall
VP Compliance