High
Point Bank & Trust Company
September 8, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
comments@fdic.gov
Re: FDIC – 12
CFR Part 345; Proposed Revisions to the Community Reinvestment
Act
Regulations; 69 Federal Register 51611; August 20,
2004
Dear Sir or Madam:
The Federal Deposit
Insurance Corporation (FDIC) has proposed several amendments to
the Community
Reinvestment Act (CRA) regulations. The
proposals include 1) raising the asset threshold for a “small
bank” 2) adding a separate Community Development (CD) test
and 3) revising the definition of “community development.” The
above revisions would affect all FDIC insured financial institutions.
High Point Bank & Trust Company, founded in 1905, is located
in High Point, North Carolina. It is a state chartered non-member
bank, with assets of approximately $600 million. High Point Bank & Trust
Company primarily serves the cities of High Point, Jamestown and
Archdale, North Carolina and the surrounding counties of Guilford,
Davidson, Forsyth and Randolph.
High Point Bank & Trust Company (the Bank) supports raising
the asset threshold for a “small bank” from $250 million
to $1 billion. The Bank also supports revising the definition of “community
development” to include rural residents. However, the Bank
does not support the creation of a separate CD test in addition to
the small bank standard. A further discussion of the Bank’s
position on the above mentioned proposals follows.
Raising
the Asset Threshold for a “Small Bank” under
CRA
High Point Bank & Trust Company strongly supports the FDIC’s
proposal to increase the asset threshold of a “small bank” to
$1 billion. As noted in the proposal, increasing the threshold to
$1 billion would only decrease the percentage of industry assets
held by large institutions by a very nominal amount. Requiring banks
with assets of up to $1 billion to meet the same requirements of
a much larger bank is very time-consuming and financially draining.
It is also difficult for “small banks” to compete with “large
banks” for investments within the same assessment area.
Creating a Separate Community Development Test
High Point Bank & Trust Company agrees that a community development
criterion in the small bank examination standard for banks between
$250 million and $1 billion is appropriate. This will allow evaluation
of one or more of the bank’s community development activities
including CD lending, services or investments. However, High Point
Bank & Trust Company is strongly opposed to creating a separate
community development test in addition to the small bank standard.
We believe that such a test would create an additional community
development obligation, not contained in the CRA. This obligation
would become a focal point and actually detract from efforts to serve
the whole community.
Changing
the Definition of “Community Development”
The FDIC proposes
changing the definition of “community development” to
benefit not just low- and moderate-income residents, but also residents
of rural areas. High Point Bank & Trust Company supports this
change. We believe the change would encourage banks to invest within
their assessment area and better meet the intentions of the CRA to
benefit the community.
Conclusion
The proposals
for change to the CRA discussed above will have a large impact
on the banking
industry, especially those banks that
will change classifications from a “large bank” to a “small
bank.” Changing the definition of a “small bank” to
include all banks with assets up to $1 billion, allowing banks to
determine how they will meet the community development criteria instead
of imposing a separate test and including rural residents in the
community development definition are all steps towards improved CRA
regulations. Making the CRA requirements for “small banks” less
burdensome will allow the banks to focus their resources on benefiting
the community and, in so doing, meeting the intentions of the CRA.
Sincerely,
Charles L. Myers
High Point Bank & Trust Company
President and Chief Executive Officer
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