Brentwood Bank
411 McMurray Road, Suite 200
Bethel Park, PA 15102-1165
Phone: 412-409-9000
Fax: 412-409-3291
April 6, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
RE: Proposed rate updating the Community Reinvestment Act (CRA)
Dear Mr. Feldman:
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 CRA examination from $250 million to $500
million. However, I believe the agencies must consider additional relief
in this area than has been proposed.
The agencies note that raising the asset limit to $500 million will
have little material impact on the amount of total assets currently
covered by the large retail institution exam, but will reduce by
approximately half the number of institutions subject to such review.
I concur with agencies determination to ensure the vast majority of
industry assets remain subject to the large retail exam. However, I
would suggest the agencies either index the dollar amount eligible for
the small bank streamlined CRA exam or increase the exempt amount from
$500 million to $1 billion in assets.
It is my understanding that as of 12/31/03, the number of FDIC
insured banks and thrifts were 9,182 representing $9 trillion in assets
(FDIC Quarterly Banking Profile 4th Quarter 2003). Of these
institutions, 8,088 had totals assets $500 million or less while 8,612
had total assets of $1 billion or less. Further, institutions with $500
million or less in assets account for $1.03 trillion in assets, or 11
percent of total industry assets. The data also showed that institutions
with $1 billion or less in assets account for $1.38 trillion in assets
or 15 percent of total industry assets.
By either tying the amount eligible for streamlined exams to some
type of index or increasing the asset threshold for the large retail
institution exam to $1 billion would not have a significant impact on
the total amount of assets nor the total number of institutions covered
by the exam. It would free up resource dedicated to documenting large
bank CRA requirements and allow more community banks to focus on what
they do best — fueling America's local economies.
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. 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. While community banks still must comply with
the general requirements of CRA, this change will eliminate some for the
most problematic and burdensome elements of the current CRA regulation
from community banks.
Sincerely,
John W. Cost
Loan Administration Officer
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