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PREMIER COMMUNITY BANK
March 17, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
Re: 12 CFR Part 345
Dear Sir:
I am an assistant vice president of Premier Community Bank, a $145
million community bank located in Marion, Wisconsin. As a community
banker, I am writing to support the federal bank regulatory agencies'
(Agencies) proposal to enlarge the number of banks that will be examined
under the small institution Community Reinvestment Act (CRA)
examination. The Agencies propose to increase the asset threshold from
$250 million to $500 million and to eliminate any consideration of
whether the small institution is owned by a holding company.
I applaud the Agencies for recognizing that it is time to expand this
critical burden reduction benefit to larger community banks. When a bank
must comply with the requirements of the Large Bank CRA evaluation
process, the costs and burdens increase dramatically. The resources
devoted to this strenuous evaluation process ultimately take away
valuable resources needed to meet the credit demands of the community.
Adjusting the asset size limit also more accurately reflects the
significant changes and consolidation within the banking industry over
the last 10 years, The proposed change recognizes that it is not fair to
assess the CRA performance of a $500 million bank (or even a $1 billion
bank, for the matter) with the same performance evaluation standards
used to evaluate a $500 billion bank. Large banks now stretch from
coast-to-coast with assets in the hundreds of billions of dollars. Small
community banks should not have to be burdened with the same strenuous
CRA evaluation processes as these large banking company conglomerates.
While I applaud the Agencies proposed increase, at the same time I feel
that the size limit should be increased to $1 billion in order to more
accurately reflect the changes happening in the banking industry.
Community activists who are against the Agencies proposal appear to
be oblivious to the cost and burdens that a community bank experiences
with a Large Bank CRA exam. Yet, at the same time, they object to bank
mergers that remove the local community bank from the community. If
community groups want to continue to see community banks in the
community providing local decision making and support, then they must
recognize that regulatory burdens are strangling smaller institutions
and forcing them to consider selling to larger institutions that have
more resources to manage the burdens.
Increasing the size of banks eligible for the Small Bank streamlined
CRA examination does not relieve banks from CRA responsibilities. This
streamlined examination does provide a very understandable assessment
test of the bank's record of providing credit in its community. Added to
this is the fact that the survival of many community banks is closely
intertwined with the success and viability of the community that they
are in.
In conclusion, I feel that increasing the asset-size of banks
eligible for the Small Bank streamlined CRA examination is an important
first step to reducing regulatory burden. I also support eliminating the
separate holding company qualification for the streamlined examination
because it places small community banks that are part of a larger
holding company at a disadvantage to their peers. While community banks
must still comply with the general requirements of CRA, this change will
eliminate some of the most burdensome elements of the current CRA
regulation from community banks that are drowning in regulatory
red-tape. I also urge the Agencies to seriously consider raising the
size of banks eligible for (the streamlined examination to $1 billion in
assets in order to better reflect the current demographics of the
banking Industry.
Jeff Wilke
Assistant Vice President
Premier Community Bank
Marion, WI
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