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COMMUNITY TRUST BANK
From: Danny Van [mailto:dvan@ctbonline.com]
Sent: Thursday, September 02, 2004 12:30 PM
To: Comments
Subject: RIN 3064-AC50
I am writing in support of the proposed changes to the CRA definition
with respect to the definitions of small and large banks. I work for a
$400MM community bank, and although we are committed to the communities
we serve, the "large" bank definition and requirements are very
difficult for a small, by today's standards, bank like ours to fulfill.
We employ a full time CRA Officer and a separate Community
Development Officer to help coordinate and facilitate our various CRA,
financial literacy, affordable housing, and various other initiatives,
and will continue to do so even in the event of a rules change. Our
commitment to CRA is sincere, and we have received recognition in
numerous ways for our efforts, including being noted as a "model site"
by FDIC on its website for our excellence with the Money Smart program.
We are a leader in lending on affordable housing developments, having
done more LIHTC projects, I would guess, than any bank of our size in
our state. We received recognition by a leading community organization
in our area as the top corporate citizen in our city this year for our
various initiatives and programs. We are one of the largest users in our
state of the various FHLB programs, and have been awarded several grants
for affordable housing and economic development purposes. By utilizing a
strategy of partnering with community organizations, taking advantage of
governmental and quasi-governmental programs, and providing facilitation
and flexible financing, we have achieved many successes in these areas.
Despite our many successes, it is highly difficult, based on the
existing rules, to achieve anything more than a mediocre result on a CRA
exam, due to the limitations of being a small bank and operating in a
largely rural area. Some of the challenges are due in part to
statistical anomalies resulting from having a very large number of low
income persons in a limited geographical area.
For instance, due to there being a large number of low-income persons
in Union Parish, there exist no low-income census tracts in Union
Parish, which is one of only three parishes in which we operate. The
reason is that the median income is so very low there, to classify
someone as "low income" requires them to be very, very poor, so
consequently there are not enough concentrations of very, very poor in
any single census tract for a tract to qualify as low-income. Use of a
median income as a valid benchmark in an area requires that incomes be
arrayed along somewhat of a normal distribution of incomes. This is
possible and valid when utilized for areas where there is a broad mix of
incomes and socioeconomic factors, and where enough population density
exists to validate the data. However, when a large percentage are in
poverty, the data utilizing a median as a benchmark becomes meaningless,
because of the absence of middle-income and high-income persons. "Low",
as defined, becomes simply a function of being a low percentage of an
already very low number. I would invite anyone who cares to come, to
Union Parish, for a tour, and I would challenge that person to conclude
that there are no low-income tracts there, when measured by any
reasonable and valid standard.
Regardless, and I understand that such an issue is not specifically
an FDIC issue, but it highlights the difficulties that a small bank,
with relatively few branches in a small geographic area, can encounter
when trying to fulfill the "large bank" requirements, despite a true and
sincere commitment to the communities we so eagerly serve.
Thank you for your time, and for providing those of us in the
industry an opportunity for comment.
Sincerely,
Danny Van
President
Community Trust Bank
1800 Hudson Lane
Monroe, LA 71201
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