Community
Bank and Trust
From: Feb1845BU@aol.com [mailto:Feb1845BU@aol.com]
Sent: Saturday, September 25, 2004 1:55 PM
To: Comments
Cc: psmith@aba.com
Subject: RIN No. 3064-AC50 (Proposed Changes to the CRA by the FDIC)
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: FDIC Proposed Increase in the Threshold
for
the Small Bank CRA Streamlined Examination
Dear Mr. Feldman:
I am a Director of Community Bank and Trust, Waco, Texas, a city
of approxi-
mately 100,000 residents. Our bank has $270,000,000 in assets, and
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. I understand that
this is not an exemption
from
CRA and that our bank would still have to help meet the credit needs
of our
entire community and be evaluated by our regulator.
I also support the addition of a community development criterion
to the small
bank examination for larger community banks. However, I urge the
FDIC to
adopt its original $500 million threshold for small banks
without a CD criterion
and only apply the new CD criterion to community banks
greater than $500 million up to
$1 billion. As FDIC examiners know, it has proven extremely difficult
for
small banks 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. That
was certainly
not the intent of Congress when it enacted CRA.
Today, when a small bank goes over $250 million, it must completely
reorganize
its CRA program and begin a massive new reporting, monitoring and
investment
program. If the FDIC adopt its proposal, a state nonmember bank would
move
from the small bank examination to an expanded but still streamlined
bank ex-
amination, with the flexibility to mix Community Development loans,
services
and investments to meet the new CD criterion.
I strongly oppose making the CD criterion a separate test from the
bank's
over-
all CRA evaluation. For a community bank, CD 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 CD lending fits well within the concept of serving
the whole
community. A separate test would create an additional
CD obligation and regulatory burden
that would erode the benefit of the streamlined exam.
Finally, I believe that the FDIC has proposed a major improvement
in the CRA
regulations, one that much more closely aligns the regulations with
the
Community Reinvestment Act itself, and I urge the FDIC to adopt its proposal,
with the
foregoing recommendations.
Sincerely,
Herbert H. Reynolds, Ph.D.,Sc.D.
Director, Community Bank and Trust
Waco, Texas
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