March 19, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
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 holding company
size limit (currently $1 billion). This proposal will greatly reduce
regulatory burden. I am the President and CEO of Community Trust Bank
with an asset size of $173,000 located in Hiram, Georgia.
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. 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 times 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 the 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
interwined 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 in reducing regulator burden. I also urge the
agencies to seriously 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
Genevieve B. Cole
President & CEO
Community Trust Bank
Hiram, GA
