FDIC Federal Register Citations

Bank of Southside Virginia

From: Peter Clements
Sent: Wednesday, April 04, 2007 10:58 AM
To: Comments
Subject: Expanded Examination Cycle attn Mr. Robert E. Feldman, Executive Secretary 

Dear Mr. Feldman

Our Bank would like to express its clear support for the proposed rule extending the Examination Cycle for healthy banks to 18 months from the current 12 month cycle.

While it may not surprise anyone that a bank would support this effort we did not want to show indifference to a significant effort to reduce regulatory burden.  Banks with full External Audits should also be considered to have an extra layer of oversight in this regard and this voluntary level of oversight should be considered within the component rating system.

In fact we believe the action last year by the FDIC to increase the limit for FDICIA reporting to one Billion dollars was timely and appropriate and would support the same one Billion dollar limit for an 18 month Cycle since External Audits are required of Banks in excess of 500 million in total assets in size.

Many small banking institutions are not growing much faster than the rate of inflation and this kind of deliberate, controlled growth allows for better underwriting of Loans and  better Audit control of a financial enterprise. If you do consider the higher limit at some point in the future a high growth guideline could be added to help ensure that rapid growing and changing financial institutions continue to be examined in a more frequent manner as a matter of due course. 

From our review of the proposal there appears to be ample flexibility given to Regulatory Authorities to be able to come onsite at any point you feel necessary to ensure operations continue to meet Safety and Soundness guidelines. With the recently increased reporting detail being provided through the call report mechanism the remote monitoring capabilities continue to grow and should allow appropriate early warning signals.

Again we appreciate the interim rule and encourage final adoption once the comment period has been completed.

Thank you for the opportunity to comment.

Sincerely,

J. Peter Clements
President & CEO
The Bank of Southside Virginia