Northpoint Bank
March 8, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal
Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: Community Reinvestment Act Regulations
Dear Mr. Feldman:
I am the President
of Northpointe Bank, a $194 million bank located in Grand Rapids,
Michigan. As a community banker, I strongly support
the federal bank regulators' proposal to increase the asset size
of banks eligible for the small bank streamlined Community Reinvestment
Act (CRA) examination from $2.50 million to $500 million. I also
support the elimination of the holding company size limit (currently
$1 billion). I am in favor of this proposal because it will greatly
reduce regulatory burden.
The small bank CRA examination process was an excellent innovation,
and I commend the agencies for recognizing that it is time to expand
this critical burden reduction benefit to larger community banks.
The passage of this proposal will allow more community banks to focus
on what they do best - fueling America's local economies. When a
community bank such as Northpointe Bank must comply with the requirements
of the large bank CRA evaluation process, the costs and burdens increase
dramatically, and the resources devoted to CRA compliance are resources
not available for meeting the credit demands of the local community.
Adjusting the asset size limit will also serve to more accurately
reflect the significant changes and consolidation that has occurred
within the banking industry in the last 10 years. The proposed change
recognizes that it's not right or fair to assess the CRA performance
of a $500 million bank or a S1 billion bank with the same exam procedures
used for a $500 billion bank. Furthermore, while the proposed increase
in asset size is a good first step, I strongly believe that the size
of banks eligible for the small-bank streamlined CRA examination
should be increased to $2 billion, or at a minimum, $1 billion.
I would also like to point out that increasing the asset size of
banks eligible for the small-bank streamlined CRA examination does
not relieve banks from their CRA responsibilities. Since the survival
of many community banks, including Northpointe Bank, is closely intertwined
with the success and viability of their communities, the increase
will merely eliminate some of the most burdensome requirements.
In summary. I believe that increasing the asset-size of banks eligible
for the small bank streamlined CRA examination process is an important
first step to reducing regulatory burden. I also support eliminating
the separate holding company qualification for the streamlined examination,
since it places small community banks that are part of a larger holding
company at a distinct disadvantage to their peers. While community
banks still must comply with the general requirements of CRA, this
change will eliminate some of the most problematic and 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 $2 billion, or at least $I billion, in assets to better
reflect the current demographics of the banking industry.
Sincerely,
Charles A. Williams
President & CEO
Northpointe Bank
Grand Rapids, MI
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