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FDIC Federal Register Citations Hudson
Savings Bank Re: RIN Number 3064-AC50 Dear Mr. Fieldman: I am Vice President, Residential Lending and CRA Officer of Hudson Savings Bank, located in Hudson, Massachusetts, a suburban community of 17,000 residents between Boston and Worcester. My bank is a $568 million bank and is currently subject to the large bank CRA exam. I am writing to strongly support the FDIC's proposal to raise the threshold for the streamlined small bank CRA examination to $1 billion. This would greatly relieve the regulatory burden imposed on many smaller banks such as my own under the current regulation, which are required to meet the standards imposed on the nation's largest banks. I understand that this is not an exemption from CRA and that my bank would still have to help meet the credit needs of its entire community and be evaluated by my regulator. However, I believe that this would lower my current regulatory burden substantially. I also support the addition of a community development criterion to the small bank examination for larger community banks. It appears to be a significant improvement over the investment test. As FDIC examiners know, it has proven extremely difficult for small banks to fmd 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 intent of Congress when it enacted CRA. An additional reason to support the FDIC's CD criterion is that it significantly reduces the current regulation's "cliff effect." 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 adopts its proposal, a state nonmember bank would move from the small bank examination to an expanded but still streamlined small bank examination, with the flexibility to mix Community Development loans, services and investments to meet the new CD criterion. This would be far more appropriate to the size of the bank, and far better than subjecting the community bank to the same large bank examination that applies to the nation's largest banks. This more graduated transition to the large bank examination is a significant improvement over the current regulation. I strongly oppose making the CD criterion a separate test from the bank's overall 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 (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 would create an additional CD obligation and regulatory burden that would erode the benefit of the streamlined exam. In conclusion, 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 recommendations above. I will be happy to discuss these issues further with you, if that would be helpful. Sincerely,
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| Last Updated 11/22/2004 | regs@fdic.gov | |