Federal Deposit
Insurance Corporation

If, and that is one giant IF, you truly give any consideration to the amount of additional burden the proposed rulemaking on modifications to the risk-based capital framework would have on community banks, especially as compared to any benefit which would be derived, you will exclude community banks from any of the proposed modifications. I can not imagine the time and expense it would take to go through this institution’s loan portfolio and code just mortgage related loans (if our software would enable coding to reflect all the variables, which it does not) to accurately classify the risk of individual mortgage loans and HELOC’s.. I can assure you that by the time the initial coding process was completed, it would have become outdated due to the changes which constantly occur which affect the risk ratings on loans.  Keeping information current would require a constant portfolio review process which, even at our asset size, would require at least two additional employees. Large institutions must have pushed for the proposed modifications in order to reduce their capital requirements.  Why not just make the modifications applicable to them? If, on the other hand, there are concerns with the capital position of community banks in general, why not just adjust the risk weights to increase capital requirements?  Why must every action the federal government takes under the guise of achieving greater security, safety & soundness, disclosure, etc. always have a significant associated expense?     

Lewis Shuler