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INDEPENDENT COMMUNITY BANKERS OF AMERICA September 7, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC
Office of the Comptroller of the Currency
250 E Street, SW
Public Information Room
Mailstop 1-5
Washington, DC 20219
Attn: Docket Number 04-17
Jennifer J. Johnson, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551
Attn: Docket No. R-1205 Regulation Comments
Chief Counsel’s Office
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
Attn: No. 2004-28
Re: Community Reinvestment Act – Joint Interim Rule
Dear Sir or Madam:
The Independent Community Bankers of America (ICBA)1
appreciates the opportunity to comment on the agencies’ interim rule
changes to the Community Reinvestment Act (CRA) regulations, as
announced in the Federal Register of Thursday, July 8. The
agencies have adopted several adjustments to the CRA regulations
unrelated to the pending proposal to expand eligibility for the
streamlined small bank CRA exam. These changes, effective on
publication, are primarily technical in nature.
First, the revisions update the definition of metropolitan
statistical areas to reflect revisions adopted by the Office of
Management and Budget. Second, to reflect changes made by the Census
Bureau, all references to block numbering areas have been dropped since
all counties have been assigned census tract numbers. Third, following
recent changes to the Home Mortgage Disclosure Act (HMDA) regulations by
the Federal Reserve (Regulation C), the CRA revisions redefine a “home
mortgage loan” to include “refinancings” along with home purchase loans
and home improvement loans.
Inasmuch as these changes are designed to coordinate the CRA rules
with existing regulatory changes, the ICBA does not object to the
revisions. However, we also believe it is important to point out that
these are the very types of change that do so much to add to the
regulatory burden that has the potential to cause the small community
bank to become an endangered species, as shown by in recent testimony
the Vice-Chairman of the FDIC2 and separately in an article
by two economists of the Federal Reserve Bank of Dallas.3
While the changes contemplated in the interim rule may seem minor,
like a pebble tossed in a pond, they produce a ripple effect. Each
adjustment will require all banks to changes policies, review and update
procedures, and review and update forms. Software will have to be
updated. Then, appropriate staff will have to be trained. Constant rule
changes, no matter how innocuous they may appear, also add to confusion
among bankers and examiners – further compounding regulatory burden. And
finally, banks will have to update compliance and audit procedures to
reflect the changes.
Moreover, each rule change does not take place in a vacuum. There are
many other revisions and changes being imposed under other rules and
regulations, such as those being applied under the Fair and Accurate
Credit Transactions Act. Therefore, the ICBA urges the agencies to be
ever mindful of the impact and costs of each regulatory change, even
those that are only “technical” in nature, such as those contemplated in
these interim rules.
Thank you for the opportunity to comment.
Sincerely,
Robert G. Rowe, III
Regulatory Counsel
Independent Community Bankers of America
One Thomas Circle, NW, Suite 400
Washington, DC 20005
1 The Independent Community Bankers of America represents
the largest constituency of community banks of all sizes and charter
types in the nation, and is dedicated exclusively to protecting the
interests of the community banking industry. ICBA aggregates the power
of its members to provide a voice for community banking interests in
Washington, resources to enhance community bank education and
marketability, and profitability options to help community banks compete
in an ever-changing marketplace. For more information, visit ICBA's
website at www.icba.org.
2 Statement of John M. Reich, Vice Chairman, Federal Deposit
Insurance Corporation on Consideration of Regulatory Reform Proposals
before the Committee on Banking, Housing and Urban Affairs, United
States Senate, June 22, 2004
3 “Small Banks Far From Thriving,” American Banker, August
20, 2004, p. 10 |
