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FDIC Federal Register Citations



NORTHSTAR BANK


August 243, 2004


Robert E. Feldman, Executive Secretary
Attn: Comments
Federal Deposit Insurance Corporation
550 17th Street North West
Washington, DC 20429

Subject: Community Reinvestment RIN 3064-XXXX

Dear Mr. Feldman:

Northstar Bank is a four year old $100 million state non-member bank, with two offices in the Thumb of Michigan. Our main office is located in Bad Axe, Michigan, approximately 100 miles north of Detroit, Michigan. Farming and agri-business are primary building blocks of our local economy. The bank is owned by Northstar Financial Group, Inc. which also has a bank just north of Metropolitan Detroit.

Our organization supports the increasing of the size limit for eligibility for the small-bank exam from $250 million to $1 billion and the elimination of the separate holding company qualification. As community bankers we realize the "streamlined" examination procedures do not exempt our organization from the original mandate of the Community Reinvestment Act. We feel the proposed changes actually recognize how community banks function. Community banks must meet the financial needs of our local communities or we will cease to exist.

It has been my experience the Directors, Officers, Staff, and, most importantly, the Shareholders of community banks have a strong bond with their local area. They have both a financial interest, and a personal pride which creates a vested interest in the success of their hometown.

The adding of the new community development criterion to small bank performance standards will need a common sense approach on the part of-the banks and the Regulators. While a community bank may support the idea of a particular community development project it might be beyond the risk tolerance or expertise of the institution. The dollar amount or required terms of sorne projects could be beyond the banks ability to prudently fund. The Regulators must consider these factors when judging a bank's community development activities.

The expansion of community development definitions to include a broader range of activities in rural areas does recognize the unique characteristics of rural America. This change will provide additional flexibility needed by community banks to meet the community development criterion.

The Community Reinvestment Act was enacted to encourage banks to provide financial service to all parts of the communities where they collect deposits. The FDIC's proposal does not change that, but provides some relief from the burden of regulatory compliance.

I appreciate the opportunity to comment on the proposed changes.

Sincerely
John R. Booms
President & CEO




Last Updated 09/07/2004 regs@fdic.gov

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