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FDIC Federal Register Citations

Burt County State Bank

April 5, 2004

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

RE: Proposed Rules – Community Reinvestment Act Regulations

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 $240 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 of Burt County State Bank in Tekamah, Nebraska.

Burt County State Bank has over $40 million in assets. Burt County State Bank is majority owned by Lauritzen Corporation, a Nebraska-based interstate financial holding company. Lauritzen Corporation controls ten bank charters and has total assets of approximately $1.50 billion.

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. For example, in my bank, the three part large bank CRA exam process accounts for 3.75% of employee and benefits expense.

Increasing the size of 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 intertwined 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 stop to reducing regulatory burden. I also support eliminating the separate holding company qualification for the streamline examination, since it places small community banks that are part of a larger holding company at a disadvantage to their peers. While community banks still must comply with the general requirements of CRA, 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. I also urge the agencies to seriously consider raising the size of banks eligible for the streamline examination to $2 billion or, at least, $1 billion in assets to better reflect the current demographics of the banking industry.

Sincerely,

Larry N. Nelson, President
Burt County State Bank

Last Updated 04/13/2004 regs@fdic.gov

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