| MAINE BANKERS ASSOCIATION
September 20th
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429
RE: RIN Number 3064-AC50
Dear Mr. Feldman:
On behalf of
the members of the Maine Bankers Association, we write in strong
support of
increasing 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 unnecessary
regulatory burden imposed on Maine’s smaller banks, which today
are required to meet the exact same standards imposed on the nation’s
largest multi-state banks.
Maine Bankers
Association represents twenty-two financial services organizations,
the majority
of which are smaller commercial banks
operating in local regions of the state. For many years, it has been
clear to these Maine bankers that it makes little sense having a
local bank with 5 – 7 branches in several rural Maine counties
face the same standards as the nation’s largest banks with
assets in the trillions and with branches in nearly all 50 states!
Of course, community banks would still be required to help meet the
credit needs of their entire communities and would continue to be
examined by their regulator as to how they are meeting their local
community credit needs.
The Maine Bankers
Association supports the addition of a community development criterion
to be
included in the small bank examination
for larger community banks, but we believe that the FDIC should adopt
its original $500 million threshold. This new community development
criterion should be applied only to banks with assets between $500
million and $1 billion. Community banks up to $500 million in assets
now hold about the same percent of overall industry assets as community
banks with up to $250 million did a decade ago – so this adjustment
is an appropriate adjustment.
We know of local community Maine banks that have difficulties finding
appropriate CRA qualified investments in their local rural communities.
Many small banks then are forced to make regional or statewide investments
that are extremely unlikely to ever benefit their own rural community.
We are sure Congress did not intend for this result when it enacted
CRA.
Maine Bankers
Association opposes making the new community development criterion
a separate
test from the bank’s overall CRA Evaluation.
A new separate test would create an additional community development
obligation, a new regulatory burden, thereby defeating the intent
of the streamlined small bank examination.
Finally, from
a significantly rural state such as Maine, our bankers strongly
support the FDIC’s proposal to change the definition
of “community development” from only focusing on low
and moderate-income area residents, to one including rural residents.
This change will go a long way toward eliminating the current distortions
in the regulations that result in a small rural bank being told to
invest in regional projects for areas that are not in the small rural
bank’s community or market area.
Our Maine Bankers
Association membership includes banks that are more than a century
old – banks that have grown over time by
serving the needs of their local communities. These banks have survived
from the mid 1800s to the 21st Century by knowing the needs of their
customers. Our Maine banks over the years only prosper and survive
by understanding and meeting these customer needs, whether the customer
works in forestry, farming, fishing, or the paper industry. Increasing
the threshold from $250 million to $1billion won’t reduce the
local bank’s commitment to all members of their community – it
wisely will reduce regulatory burden on smaller banks that are in
no way competing with or similar to our nation’s largest billion,
even trillion dollar financial organizations.
Respectfully,
Joseph J. Pietroski, President
Mark L. Walker,
V. P. & Counsel
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