Security Bank
March 15, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Dear 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
Community Reinvestment Act (CRA) examination from $250 million to $500
million and elimination of the holding company size limit (currently
$1 billion). This proposal will greatly reduce regulatory burden. I
am the Vice President and Compliance Officer of Security Bank, a $220
million bank located in Tulsa, Oklahoma.
The small bank
CRA examination process was an excellent innovation. As a longtime
community banker
I applaud the agencies for recognizing
that it is time to expand this critical burden reduction benefit to
larger banks. At this critical time for the economy, this will allow
more community banks to focus on what they do best-fueling America’s
local economies. When a bank must comply with the requirements of the
large bank CRA evaluation process, the burdens (and costs) increase
dramatically.
Adjusting the asset
size limit also more accurately reflects significant changes and
consolidation
within the banking industry in the last 10
years. To be fair, banks should be evaluated against their peers, not
banks hundreds of times their size. The proposed change recognizes
that it isn’t right to assess the CRA performance of a $500 million
bank with same exam procedures used for a $500 billion bank. Large
banks now stretch from coast-to-coast with assets in the hundreds of
billions of dollars. It is not fair to rate a community bank using
the same CRA examination. And, while the proposed increase is a good
first step, the size of banks eligible for the small-bank streamlined
CRA examination should be increased to at least $1 billion.
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 the communities, the increase will merely
eliminate some of the most burdensome requirements. Regulatory burdens
are strangling smaller institutions and forcing them to consider selling
to larger institutions that can better manage the burdens.
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. I also support eliminating
the separate holding company qualification for the streamlined examination,
since it places small community banks that are part of a larger holding
company at a disadvantage to their peers. While community banks must
comply with the general requirements of CRA, this change will eliminate
some of the most problematic and burdensome elements of the current
CRA regulation from community banks that are drowning in regulatory
red-tape. I also urge the agencies to seriously considering the size
of bank eligible for the streamlined examination to at least $1 billion
in assets to better reflect the current demographics of the banking
industry.
Respectfully submitted,
Sharon Ray
Vice President
Security Bank
10727 E. 51st Street
Tulsa, Oklahoma 74146
