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Burt County State Bank
April 5, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th. Street, NW
Washington, DC 20429
RE: Proposed Rules – Community Reinvestment Act Regulations
Dear Mr. Feldman,
As a community banker, I strongly endorse the federal bank
regulators’ proposal to increase the asset size of banks eligible for
the small bank streamlined Community Reinvestment Act (CRA) examination
from $240 million to $500 million and elimination of the holding company
size limit (currently $1 billion). This proposal will greatly reduce
regulatory burden. I am the President of Burt County State Bank in
Tekamah, Nebraska.
Burt County State Bank has over $40 million in assets. Burt County
State Bank is majority owned by Lauritzen Corporation, a Nebraska-based
interstate financial holding company. Lauritzen Corporation controls ten
bank charters and has total assets of approximately $1.50 billion.
The small bank CRA examination process was an excellent innovation.
As a community banker, I applaud the agencies for recognizing that it is
time to expand this critical burden reduction benefit to larger
community banks. At this critical time for the economy, this will allow
more community banks to focus on what they do best—fueling America’s
local economies. When a bank must comply with the requirements of the
large bank CRA evaluation process, the costs and burdens increase
dramatically. And the resources devoted to CRA compliance are resources
not available for meeting the credit demands of the community. For
example, in my bank, the three part large bank CRA exam process accounts
for 3.75% of employee and benefits expense.
Increasing the size of banks eligible for the small-bank streamlined
CRA examination does not relieve banks from CRA responsibilities. Since
the survival of many community banks is closely intertwined with the
success and viability of their communities, the increase will merely
eliminate some of the most burdensome requirements.
In summary, I believe that increasing the asset-size of banks
eligible for the small bank streamlined CRA examination process is an
important first stop to reducing regulatory burden. I also support
eliminating the separate holding company qualification for the
streamline examination, since it places small community banks that are
part of a larger holding company at a disadvantage to their peers. While
community banks still must comply with the general requirements of CRA,
this change will eliminate some of the most problematic and burdensome
elements of the current CRA regulation from community banks that are
drowning in regulatory red-tape. I also urge the agencies to seriously
consider raising the size of banks eligible for the streamline
examination to $2 billion or, at least, $1 billion in assets to better
reflect the current demographics of the banking industry.
Sincerely,
Larry N. Nelson, President
Burt County State Bank
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