CITIZENS TRI-COUNTY BANK
March 9, 2004
Robert E. Feldman, Executive Secretary
Attention Comments
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
Dear Sir.
I strongly approve of the proposal made by federal bank regulators to
increase the asset size of banks that are eligible for the streamlined
Community Reinvestment Act (CRA) examination from $250 million to $500
million and the elimination of the holding company size limit (currently
$1 billion). I am certain that this proposal will effectively reduce
regulatory burden. I am the Chief Executive Officer and Chairman of
Citizens Tri-County Bank, a $312 million community bank, located in
Dunlap, Tennessee.
As a community banker, I congratulate the agencies for their
recognition of the need to expand this significant burden reduction
benefit to larger community banks. This expansion will permit more
community banks to focus on customer service, which in turn energizes
local economies. When a community bank must comply with the requirements
of the large bank CRA examination process, costs and burdens
dramatically increase. The resources that must be allocated to CRA
compliance are resources that are not available to meet the credit needs
and demands of the community. Community banks must bear the expenses of,
among other things, additional overhead, training, reallocation of
resources, and computer software and hardware.
In all fairness, banks should be compared to their peers. In my
opinion, it is unfair to assess the CRA performance of a $300 million
bank or a $1 billion bank with the identical procedures used to examine
a $500 billion bank. In addition, I believe that the size of banks
eligible for the streamlined CRA examination should be increased to at
least $1 billion.
Community activists object to bank mergers and acquisitions that
remove locally owned banks from communities. Yet, they seem unconcerned
about the excessive costs and regulatory burdens that both small and
large community banks must bear. Communities have better access to the
decision-makers when banks are locally owned and operated. Community
banks may be forced to consider selling to larger institutions because
they can no longer bear excessive regulatory burdens; therefore,
community activists should be encouraged to support this proposal.
The success and growth of a community and the community bank is
interdependent. Small community banks are so closely involved with
communities that they will not be relieved of CRA responsibilities even
if the size of banks eligible for the streamlined CRA evaluation is
increased.
I understand that community banks must comply with the general CRA
requirements; however, increasing the asset size of banks eligible for
streamlined examination will greatly reduce regulatory burden. The
elimination of a separate holding company qualification for a
streamlined CRA examination can provide smaller community banks that are
held by larger holding companies a fairer advantage. I would urge the
agencies to consider raising the ceiling for banks eligible for
streamlined CRA examination to at least $1 billion to better reflect the
current demographics of the banking industry.
Sincerely,
H. Glenn Barker
CEO and Chairman
Citizens Tri-County Bank
Dunlap, TN
