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FIRST NATIONAL BANK OF THE ROCKIES From: Pete Waller [mailto:PeteW@fnbrockies.com]
Sent: Wednesday, September 15, 2004 8:10 PM
To: Comments
Cc: psmith@aba.com
Subject: FDIC CRA Proposal
We 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. This would greatly relieve
the regulatory burden imposed on small bank under the current regulation
which are required to meet the standards imposed on the nation's largest
$1 Trillion banks. Community banks would still be required to help meet
the credit needs of their entire communities and would continue to be so
evaluated by their regulator.
We support the addition of a community development criterion to the
small bank examination for larger community banks, but we believe the
new community development 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
regulation were adopted, therefore this adjustment in the CRA threshold
is appropriate. As bankers and FDIC examiners know, it has proven
extremely difficult for small bank, especially those in rural areas such
as our bank, 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 CRA
was enacted.
We strongly oppose making the community development criterion a
separate test from the bank's overall CRA evaluation. Such
differentiation creates the impression that community development
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 community development 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.
We thank you for your consideration of our comments in advance.
Peter Y. Waller, CLBB
Chairman, President, & CEO
First National Bank of the Rockies
Grand Junction, CO 81505-1108
970-242-2255 fax 970-242-7722
pete@fnbrockies.com
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