FDIC Federal Register Citations

Bank of Botetourt

October 7, 2004

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

Dear Mr. Feldman,

I am writing to you on behalf of Bank of Botetourt in southwestern Virginia, as well as many other community banks across the Commonwealth. First, we would like to applaud the FDIC's proposal to increase the definition of "small bank", for the purpose of determining those banks eligible for streamlined examination standards, from $250 million in assets to $1 billion in assets. As a bank that will surpass the current threshold in the coming months, it is an issue that Bank of Botetourt is following very closely.

In 1977, Congress enacted the Community Reinvestment Act to encourage banks to help meet the credit needs of their entire communities, including low and moderate income neighborhoods. Bank of Botetourt, by the very nature if its business, lends to all segments of the communities we serve. CRA loans are an important part of our business. Raising the threshold to $1 billion will not reduce CRA loans; it will reduce unnecessary and costly red tape.

Community banks that are subject to the large bank exam standards under CRA currently have the greatest compliance challenges of all banks. As indicated, Bank of Botetourt is currently facing the challenge of preparing to face these increased demands. Community banks simply do not have the resources to address compliance that large banks have.

Now, more than ever, community banks are feeling enormous regulatory strain. With the new requirements under the USA Patriot Act and the Sarbannes-Oxley Act, the regulatory burden on community banks is at an all-time high. In light of this compliance burden, CRA is an area where the FDIC can, and should, reduce the burden for small banks.

In conclusion, we commend the FDIC for their attention to this issue and greatly appreciate the opportunity to comment on this matter.

Sincerely,
H. Watts Steger, III
Chief Executive Officer & Chairman of the Board