| Houghton State Bank
April 2, 2004
Ms. Jennifer J. Johnson Secretary
Board of Governors of
the Federal Reserve System
20th & Constitution Avenue, NW
Washington, D.C. 20551
Docket No. R-1181
Ms. Leneta G. Gregorie
Legal Division
Room MB-3082
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429
Attention: Comments/Executive Secretary
Re: Proposed Rules – Community Reinvestment Act Regulations
Dear Sirs and Madams:
Houghton State Bank appreciates the opportunity to comment to the
Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, and the Office of the Comptroller of the Currency
on the proposed amendments to the Community Reinvestment Act.
Houghton State Bank is a community bank with over one hundred and
fifteen million dollars in assets and four branch offices in Southwest
Iowa. Houghton State Bank is majority owned by Lauritzen Corporation, a
Nebraska-based interstate financial holding company. Lauritzen
Corporation controls ten bank charters and has total assets of
approximately $1.50 billion.
Houghton State Bank strongly endorses the agencies' proposal to amend
the definition of "small institution" to mean an institution with total
assets of less than $500 million, without regard to any holding company
assets. We agree with the agencies that this change will reduce
unwarranted burden on small institutions such as ours. As the agencies
note in the joint notice of proposed rulemaking, there have been
significant changes in the marketplace since this regulation was adopted
in 1995. Raising the threshold from $250 million to $500 million
recognizes the substantial asset growth that has occurred. It also
recognizes that banks should be evaluated against their peers and not
banks hundreds of times their size. Eliminating the reference to the
institutions' holding companies recognizes the reality that affiliation
with a holding company does not relieve the regulatory burden imposed on
small institutions classified as large institutions due to the holding
company's asset size. As a small bank subsidiary of a holding company,
we have, at times, struggled with the burden of large bank status and
the regulatory requirements of that status. The streamlined "small bank"
test, while substantially less burdensome, continues to provide adequate
information to determine whether an institution is meeting the credit
needs of its entire community, including low-income and moderate-income
communities, consistent with safe and sound lending practices.
If you have any questions, please do not hesitate to contact me at
712-623-4823.
Sincerely
James D. Sifford
President
Houghton State Bank
116 Coolbaugh
Red Oak, IA 51566
| 
