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via e-mail
FARMERS STATE BANK Subject:
Proposed Amendments to the Community Reinvestment Act Regulations
First of all, I applaud the efforts by our Regulators to propose
changes to the Community Reinvestment Act (CRA) regulations that would
reduce the paperwork burden associated with financial institution
compliance, especially compliance by small banks. We thank you for the
opportunity to express our opinion on these proposals.
I strongly encourage changing the definition of "small institution"
to mean an institution with total assets of less than $500 million,
without regard to holding company assets. Our bank is $350 million, and
as the bank's CRA compliance officer, I can personally vouch the fact
that the CRA compliance paperwork associated with moving from a small
bank to a big bank is unduly burdensome. Reporting as a big bank has
significantly added to our data collection paperwork efforts without, in
my opinion, improving the quality of information our regulators need in
order to evaluate our performance.
Additionally, it is not uncommon for banks our size to have
compliance assigned to officers who wear many other hats. In my case,
I'm responsible for bank operations, security, marketing, branch
administration and deposit compliance. Rarely, do banks our size have
the luxury enjoyed by the large banks of being able to assign CRA
compliance to an entire division of specialized compliance folks.
The focus of CRA evaluations should be on abusive lending practices.
And, as is proposed in the recommended amendments to the regulations, it
should be made clear to financial institutions that evidence of
discriminatory or other illegal credit practices would have a negative
impact on CRA evaluations.
Finally, I'm disappointed that the "investment test" was not changed
to reflect the fact that banks like ours, who serve small rural
communities, have limited community development investment
opportunities. This puts small banks at a disadvantage and discourages
them from aggressively pursuing "outstanding" performance ratings.
Thanks, again for the opportunity to weigh in on these significant
proposals.
Keith Stanton
Senior Vice President & Cashier
Farmers State Bank
220 South Detroit Street
LaGrange, Indiana 46761
888-492-7111
260-463-7341 fax
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