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EMPRISE BANK
From: Meryem Erzi [mailto:Erzi@emprisebank.com]
Sent: Friday, September 03, 2004 3:21 PM
To: Comments
Cc: Mike Hessman; Walter Westphall
Subject: Community Reinvestment -- RIN 3064-AC50
Re: Comment Regarding Community Reinvestment 12 CFR Part 345 - RIN
3064-AC50
To Whom It May Concern:
I would like to comment regarding the new Small Bank threshold change
proposal. I would like to see the threshold raised to a larger number
than $250MM, however I think the number should perhaps be $3BB or even
$5BB, although $1BB is a step in the right direction. Given the enormous
size of some financial institutions today, I think it is entirely
possible for a bank with $2BB or $3BB in assets to qualify as a
community bank, dedicated to serving the needs of their local community
or communities. Community banks are put at a competitive disadvantage
since non-banks and credit unions are not subject to the same CRA
requirements, without even considering the tax advantage that credit
unions possess. The community banking industry is slowly being crushed
under the cumulative weight of regulatory burden, which is something
that must be addressed by Congress and the regulatory agencies before it
is too late. This is especially true for CRA. Although it is well
intentioned and nobody argues with the importance and necessity of being
responsive to the needs of the local community, the necessity to compile
and retain data of all kinds simply to document and prove compliance
unnecessarily increases the costs for compliance. And those added costs
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. Rural residents typically
fit the income pattern that would qualify for low-income status if they
lived in a city with defined census tracts.
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 (although I again submit that number should
be much larger). Consideration of the bank's community development
lending, services and investments should be based on an overall
subjective assessment by the examiner, after consultation with local
community sources, and should not be based on any artificial,
standardized ratios or magic numbers. Adding the community development
criterion to the small bank examination 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 and/or hire
additional employees to handle record keeping. Adding a formalistic
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 big nationwide 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.
Respectfully submitted,
Meryem Erzi
Emprise Bank
Vice President, Compliance Officer
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