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FDIC Federal Register Citations



Home State Bank


September 9, 2004

Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

RE: Proposed Amendments to the Community Reinvestment Act

Dear Mr. Feldman:

Thank you for the opportunity to comment on the FDIC’s proposal to amend the “small institution” test for banks under the Community Reinvestment Act. Home State Bank is a state-chartered, community bank of $370 million in assets, located in Loveland and Fort Collins, Colorado.

Home State Bank strongly supports the FDIC’s proposal to increase the asset size of banks eligible for the small bank CRA examination from $250 million to $1 billion. In fact, we encourage the FDIC to follow the OTS’ lead in raising the asset threshold to $2 billion. Because of our asset size, we have experienced first hand the cost in transitioning from “small bank” to “large bank.” We began our first year of CRA data collection under the large bank requirements in January of this year. We have seen a significant cost in terms of software, developing and implementing policies, procedures, forms, training programs, audit procedures, as well as a staff addition to monitor compliance.

We believe increasing the asset threshold to $2 billion would be reasonable in today’s economic climate. Raising the threshold will help to restore the competitive balance in our industry given the disparity between small community banks and larger banks. Recent years have seen the regulatory burden increase greatly with the passage of new laws such as Gramm-Leach-Bliley Act, the USA Patriot Act, the FACT Act, Check 21, and revisions to the Home Mortgage Disclosure Act. Added to this, community banks like Home State Bank have long been at a competitive disadvantage to credit unions that do not have the same regulatory burden as commercial banks, particularly under the Community Reinvestment Act.

Home State bank does not support the proposal to add a mandatory community development performance criterion to the evaluation method for small banks with assets greater than $250 million up to $1 billion. A separate community development test would not reduce the burden for small banks within this asset range and would require the bank to compete with much larger banks for the same community development loans and investment activities as is currently required under the large bank exam requirements.

In closing, we urge the FDIC to adopt the increased asset size threshold for small banks, and to maintain the current CRA small-bank streamlined exam guidelines.

Sincerely,

Georgia Zastrow, CRCM
CRA Officer

 

Last Updated 09/10/2004 regs@fdic.gov

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