From: Jay Randall [mailto:jtr@CommunityBankIowa.com]
Sent: Friday, March 26, 2004 3:08 PM
To: Comments
Subject: CRA Comments
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.
The small bank CRA examination process was an excellent innovation.
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 time their size.
Ironically, community activists seem oblivious to the costs and
burdens. And yet, they object to bank mergers that remove the local
bank from the community. This is contradictory. If community groups
want to keep the local banks in the community where they have better
access to decision-makers, they must recognize that regulatory
burdens are strangling smaller institutions and forcing them to
consider selling to larger institutions that can better manage
the burdens.
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 step to reducing regulatory burden. I also support eliminating
the separate holding company qualification for the streamlined
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 streamlined examination to $2 billion or, at least, $1
billion in assets to better reflect the current demographics of
the banking industry.
Sincerely,
Jay T. Randall, President
Community Bank
Dunlap IA 51529