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FDIC Federal Register Citations

Affinity Bank

March 31, 2004

Robert E. Feldman
Executive Secretary
Attn: Comments
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429

Re: Proposed Revisions to the Community Reinvestment Act Regulations

Dear Mr. Feldman:

As a community banker, I strongly endorse the federal bank regulators' joint proposal to increase the asset size of banks eligible for the small bank streamlined Community Reinvestment Act (CRA) examination from $250 million to $500 million. In fact, I believe that this threshold should be increased to at least $1 billion.

The regulatory burden on small banks has continued to grow since the CRA regulations were rewritten in 1995 and now include, among others, new reporting requirements under HMDA, the USA Patriot Act and the Fair Credit Reporting Act. The costs and burden associated with these regulations keep community banks from concentrating on the business of banking and on meeting the credit needs of our local communities.

Adjusting the asset size limit also more accurately reflects the consolidation that has taken place within the banking industry over the past ten years. Banks should be evaluated against banks within their peer group, not banks hundreds of time their size. The proposed change reflects that it is not fair to assess the CRA performance of a $500 million bank or a $1 billion bank with the same exam procedures used for a $500 billion bank.

Increasing the size of banks eligible for the small-bank streamlined CRA examination does not relieve banks from CRA responsibilities, it merely eliminate some of the most burdensome requirements.

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 unnecessary regulatory burden and will have only a small effect on the amount of total industry assets covered by the large bank test.

Thank you for your consideration.

Sincerely,

Steven A. Ehrlich
Chairman, President and
Chief Executive Officer
Affinity Bank
1310 Broadcasting Road
Wyomissing, PA

Last Updated 04/27/2004 regs@fdic.gov

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