Chicopee Savings Bank
April
15, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St, NW
Washington, D.C. 20429
comments@fdic.gov
Dear Mr. Feldman:
As a community
banker, I strongly endorse the federal bank regulators’ proposal
to increase the asset size of banks eligible for the small bank streamlined
Community Reinvestment Act (CRA) examination from $250 million to
$500 million and elimination of the bank holding company size limit
(currently $1 billion). This will greatly reduce regulatory burden.
I am the President of Chicopee Savings Bank, a $352 million bank
located in Chicopee, Massachusetts.
The small bank CRA examination process was an excellent innovation.
As a community banker, 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. And the resources devoted to CRA compliance are resources
not available for meeting the credit demands of the community.
Adjusting the
asset size limit also more accurately reflects significant changes
and consolidation
within the banking industry in the last
10 years. To be fair, banks should be evaluated against their peers,
not banks hundreds of times their size. The proposed change recognizes
that it’s not right to assess the CRA performance of a $500
million bank or a $1 billion bank with the same exam procedures used
for a $500 billion bank. Large banks now stretch from coast-to-coast
with assets in the hundreds of billions of dollars. It is not fair
to rate a community bank using the same CRA examination. And, while
the proposed increase is a good first step, the size of banks eligible
for the small-bank streamlined CRA examination should be increased
to $1 billion.
Increasing the size of banks eligible for the small-bank streamlined
CRA examination does not relieve banks from CRA responsibilities.
Since the survival of many community banks 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. 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 inundated
in regulatory red-tape. I also urge the agencies to consider raising
the size of banks eligible for the streamlined examination to $1
billion in asset size to better reflect the current demographics
of the banking industry.
Sincerely,
William J. Wagner,
President
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