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CAPITAL CITY BANK GROUP
From: Hutchison, John [mailto:Hutchison.John@ccbg.com]
Sent: Wednesday, August 25, 2004 11:03 AM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
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. Although
my
own company is around $2BB in assets, we are located primarily in small
communities with populations less than 10,000 persons, and we certainly
feel
we are a "community" bank, despite our size.
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. However, the fact that they live in a rural
county
may skew the income numbers to prevent recognition of their actual
financial
status.
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.
John M. Hutchison
Senior Vice President-Compliance
Capital City Bank Group, Tallahassee, FL
850-671-0642
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