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FDIC Federal Register Citations

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
 

Last Updated 08/26/2004 regs@fdic.gov

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