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INDEPENDENT BANKERS OF COLORADO
1580 Logan Street, Suite 510
Denver, Colorado 80203
Phone 303.832.2000
Fax 303.832.2040
www.ibcbanks.org
April 6, 2004
Office of the Comptroller of the Currency
By e- mail to regs.comments@occ.treas.gov
The Federal Reserve Board
By e-mail to regs.comments@federalreserve.gov
Federal Deposit Insurance Corporation
By e-mail to regs.comments@fdic.gov
Re: Proposal to Increase the CRA Cap for Small Banks
To Whom it May Concern:
The Independent Bankers of Colorado (IBC) is the largest banker trade
association in Colorado, exclusively representing community banks. On
behalf of the IBC’s Board of Directors and over 115 member banks, please
accept the following comments in support of the proposal to increase the
CRA cap for small banks.
To reduce regulatory burden, the federal banking agencies propose
increasing the asset size of banks eligible for the small bank
streamlined Community Reinvestment Act (CRA) examination from $250
million to $500 million and eliminating the holding company size limit
(currently $1 billion). The community banking industry strongly endorses
these proposals, which we believe will indeed greatly reduce regulatory
burden.
The small bank CRA examination process was an excellent innovation.
It is time again for the federal agencies to expand this critical burden
reduction benefit to larger community banks. At this critical time for
the economy, this will allow more community banks to focus on what they
do best—fueling America's local economies. 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 time their size. The proposed change
recognizes that it is 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 $2
billion, or at a minimum, $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.
Increasing the asset-size of banks eligible for the small bank
streamlined CRA examination process is an important first step to
reducing regulatory burden. We 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 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. We also urge the agencies to consider raising the size of
banks eligible for the streamlined examination to $2 billion or, at
least, $1 billion in assets to better reflect the current demographics
of the banking industry.
Sincerely,
Barbara M.A. Walker
Executive Director |
