From: Wilma van Leeuwen
Sent: Tuesday, August 24, 2004 12:54 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
Community banks are put at a competitive disadvantage since non-banks
and credit unions are not subject to the same CRA requirements. The
small bank threshold should be raised from $250 million to $1 billion.
As a community banker, I greatly welcome the regulators' effort on
raising the threshold. The community banking industry is slowly being
crushed under the cumulative weight of regulatory burden, something
that must be addressed by Congress and the regulatory agencies before
it is too late. This is especially true for CRA, though well intentioned,
unnecessarily increases costs for community banks that 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. However, 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: consideration of the bank’s community
development lending, services and investments. In small community
banks bankers many times perform more then one role at the institution,
and by adding the community development criterion to the small
bank examination it 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 such CRA Wiz and hire additional employees.
Once again, adding the 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 multi-regionals
and the big national 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.
Wilma van Leeuwen
Vice President/Compliance Officer
First City Bank
