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OHIO BANKERS LEAGUE
Mr. Robert E. Feldman; Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold for
the Small Bank CRA Streamlined Examination
Dear Mr. Feldman;
The Ohio Bankers League strongly supports the efforts of the FDIC to
modernize CRA regulations by raising the threshold for the streamlined
examination from $250 million to $1 billion, however we urge you to
modify the proposed community development criteria as we outline in
greater detail below.
The OBL is a trade association representing virtually all of the FDIC
insured depository institutions doing business in Ohio. Our members
include nearly 280 commercial banks, savings banks and thrifts ranging
from small locally controlled and managed mutual organizations to some
of the largest bank holding companies that do business across the
country and around the globe. Fifty five of our members would be
impacted by your proposal.
As stated above, the OBL strongly supports the FDIC’s proposal to
raise the threshold for the streamlined CRA examination to $1 billion
regardless of the size of the bank’s holding company. This would greatly
relieve the regulatory burden imposed on small banks under the current
regulation, which are required to meet the same standards as the
nation’s largest multi-billion dollar banks and bank holding companies,
which have far greater compliance resources.
The Ohio Bankers League also supports the addition of a community
development criterion to the small bank examination for community banks
that are larger than $500 million. It appears to be a significant
improvement over the investment test. We also 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.
We oppose however 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. The addition of a category of
community development lending (and services to aid lending and
investments as a substitute for lending) fits well within the concept of
serving the whole community. A separate test however would create an
additional obligation and regulatory burden, eroding the intent of the
streamlined exam.
The OBL would also encourage the FDIC however to stick with its
original proposal of applying the current streamlined exam, which does
not include an investment component, for banks between $250 million and
$500 million. Since the streamlined exam does not currently include an
investment test the addition of a new community development test for
banks of this size would not achieve the FDIC’s original goal of easing
the regulatory burden on community banks between $250 million and $500
million. Given inflation and the growth of bank assets since the
original streamlined exam was adopted, it would be appropriate to make
this increase as an inflation adjustment without the additional burdens
of the new community development criteria
The FDIC proposal is a major improvement in CRA compliance,
recognizing that there is a big difference in resources and compliance
capabilities between small and large banks. We urge you to adopt the
proposal with the revisions we recommend above.
Respectfully submitted;
Jeffrey D. Quayle
Senior Vice President & General Counsel
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