Mid-Missouri Bank
September 20, 2004
Federal Deposit Insurance Corporation
801 17th Street NW
Washington, D.C. 20434
To the FDIC Chairman,
I serve as the
CRA Officer for a $330 million bank in Springfield, Missouri. We
are the result
of the combination of three separate
smaller community banks, and still operate as separate banks despite
our recent charter combination. We support the spirit of the CRA,
but do not support its overly narrow focus on “community development” as
currently defined.
Our bank strongly
supports 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 on our bank and allow us to allocate
resources toward meeting the needs in our communities that, although
very important to the growth of our communities, might not meet the “community
development” definition in the current regulation.
We support the addition of a community development criterion to
the small bank examination for larger community banks, but believe
the new criterion should be applied only to banks greater than $500
million up to $1 billion. Community banks up to $500 million now
hold about the same percent of overall industry assets as community
banks up to $250 million did a decade ago when the revised CRA regulations
were adopted, so this adjustment in the CRA threshold is appropriate.
As bankers and FDIC examiners know, it has proven extremely difficult
for small banks, especially those in rural areas, to find appropriate
CRA qualified investments in their communities. Many small banks
have had to make regional or statewide investments that are extremely
unlikely to ever benefit the banks' own communities. This result
certainly was not intended by Congress when it enacted the CRA.
We strongly oppose making the CD criterion a separate test from
the bank's overall CRA evaluation. Such differentiation creates the
impression that CD lending is different from the provision of credit
to the entire community. The current small bank test considers the
institution's overall lending in its community. A separate test would
create an additional CD obligation and regulatory burden, eroding
the intent of the streamlined exam.
We strongly support the FDIC's proposal to change the definition
of "community development" from only focusing on low-
and moderate-income area residents to 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 affordable housing bonds for an urban area
not in the bank's community. It will also help banks like ours
who already make significant investments in the rural communities
we serve, but are given no credit for these activities under the
current regulation.
Lastly, we support
any change that will reduce or eliminate unnecessary paperwork
burden.
Although not discussed much in either of your recent
NPRs on the CRA regulation, the most inefficient aspect of the current
regulation is the reporting requirement. Our bank and other smaller
community banks expend unnecessary resources complying with the CRA
reporting requirement – resources that could be utilized lending
and investing in our rural communities.
Sincerely,
David E. Wright
CRA Officer
Mid-Missouri Bank
Springfield, Missouri
|
