From: Gail Mcbride
Sent: Tuesday, August 24, 2004 1:11 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
Community banks are put at a competitive disadvantage since
non-banks and credit unions are not subject to the same CRA
requirements. The small bank threshold should be raised from
$250 million to $1 billion. As a community banker, I greatly
welcome the regulators' effort on raising the threshold.
The community banking industry is slowly being crushed under
the cumulative weight of regulatory burden, something that
must be addressed by Congress and the regulatory agencies
before it is too late. This is especially true for CRA, though
well intentioned, unnecessarily increases costs for community
banks that are passed on to consumers.
I also support the recommendation to change the definition
of “community development” to benefit not just
low- and moderate-income residents but also residents of
rural areas. However, I do not support the FDIC proposal
that adds a new community development criterion to the small
bank examination for banks between $250 million and $1 billion:
consideration of the bank’s community development lending,
services and investments. In small community banks bankers
many times perform more then one role at the institution,
and by adding the community development criterion to the
small bank examination it adds a time consuming accumulation
of additional data on the compliance function similar to
the large bank CRA examination. The data collection and analysis
that must be done for the large bank CRA examination almost
always requires an institution to purchase additional costly
software such CRA Wiz and hire additional employees. Once
again, adding the community development criterion stretches
already limited resources at community banks and provides
no urgently needed relief to institutions sized between $250
million and $1 billion.
Please help community banks to continue to be contributors
to their local communities in order to help their communities
flourish. Community banks are in a better position than the
multi-regionals and the big national banks to do that since
we are from our communities and understand its needs. Please
do not let community banks drown in regulatory red-tape.