Community Bank of Florida
March 24, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
RE: 12 CFR Part 345
RE: Proposed Revisions to the Community Reinvestment Act Regulations
Dear Mr. Feldman:
I am writing
to support the federal bank regulatory agencies’ (Agencies)
proposal to enlarge the number of banks that will be examined under
the small institution Community Reinvestment Act (CRA) examination.
The Agencies propose to increase the asset threshold from $250 million
to $500 million and to eliminate any consideration of whether the
small institution is owned by a holding company. This proposal is
clearly a major step towards an appropriate implementation of the
Community Reinvestment Act and should greatly reduce regulatory burden
on those institutions newly made eligible for the small institution
examination, and I strongly support both of them.
The regulatory
burden on small banks has grown, including massive new reporting
requirements
under HMDA, the USA Patriot Act and the
privacy provisions of the Gramm-Leach-Bliley Act. But the nature
of community banks has not changed. When a community bank must comply
with the requirements of the large institution CRA examination, the
costs to and burdens on that community bank increase dramatically.
In looking at my bank, converting to the large institution examination
requires, among other things, that we devote additional staff time
to documenting services and investments, which we currently do not
do, and begin to geocode all of our loans that might have CRA value.
This imposes a dramatically higher regulatory burden that drains
both money and personnel away from helping to meet the credit needs
of the institution’s community.
I also recommend raising the asset threshold for the small institution
examination to at least $1 billion. Raising the limit to $1 billion
is appropriate.
Keeping the focus of small institutions on lending, which the small
institution examination does, would be entirely consistent with the
purpose of the Community Reinvestment Act, which is to ensure that
the Agencies evaluate how banks help to meet the credit needs of
the communities they serve.
In conclusion, I strongly support increasing the asset-size of banks
eligible for the small bank streamlined CRA examination process as
a vitally important step in revising and improving the CRA regulations
and in reducing regulatory burden. I also support eliminating the
separate holding company qualification for the small institution
examination, since it places small community banks that are part
of a larger holding company at a disadvantage to their peers and
has no legal basis in the Act. While community banks, of course,
still will be examined under CRA for their record of helping to meet
the credit needs of their communities, 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.
Sincerely,
Robert L. Epling
President
Community Bank of Florida
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