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FDIC Federal Register Citations
Bank of Utica

January 9, 2006

Robert E. Feldman, Executive Secretary 
Attn: Comments 
Federal Deposit Insurance Corporation 
550 17th Street, NW 
Washington, DC 20429 
RE: RIN#3064-AC97 FDIC 

Dear Mr. Feldman:

The following comments are made in response to the Interagency Questions and Answers (Q&A’s) addressing revisions to the Community Reinvestment Act:

1. §___.12(t)-1 (proposed: When evaluating a qualified investment, what consideration will be given for prior period investments?)

We feel it is important to give full credit for prior period investments still outstanding. A qualified investment may have been made in a geographic area which will benefit that area over a number of years. For instance, an economically distressed city may seek funding through qualified bonds to help stabilize and revitalize the community and attract new jobs. Although there will be only one bond issue, it may have a multi-year impact. There will be a need only for one issue thereby eliminating the opportunity to make this same investment in this same community again for many years.

2. §___.12(s) and 563e.12(r)-4 (Proposed: What are examples of qualified investments?)

Your answer includes State and municipal obligations such as revenue bonds, that specifically support affordable housing or other community development. We feel this should be expanded to include any bonds issued by local municipalities in the bank’s assessment area in proportion to the percentage of LMI census tracts in that municipality or, where applicably in proportion to the number of LMI individuals served. Although these bonds may not directly support affordable housing or community development as defined by the regulation, they do support services which benefit everyone in the community even if only a portion of that community is low-moderate income. As an example, if a school district issues a bond to upgrade its facilities and only 25% of their students are eligible for free lunch, 25% of the bank’s investment should be included in its qualified investment since these students directly benefit from the upgrade.

Furthermore, if more than 50% of the census tracts in a municipality are LMI, the bank should be given full credit for that investment since a majority of the investment will benefit LMI individuals and families. It is important to include the outstanding portion of this investment as a qualified investment in future exams because of the long term positive impact on the community.

3. §___.12(j) and 563e.12(i)-3 (proposed revision: What are examples of community development services?)

All of the services listed in your proposed answer are important. Notably those services pertaining to deposit products are included in your list even though banks are not traditionally given credit for deposits under CRA. For example, our bank is a unit bank located in a LMI census tract. We offer a free personal checking account which also pays interest. In addition, we have historically paid above market rates on all of our deposit products. We feel this benefits our entire community, including municipalities, school districts, non-profits, hospitals, individuals and families of all income levels including but not limited to LMI levels by allowing all included to maximize their earning potential. We feel that credit should be given where rates paid on deposits are above average. This credit could be measured quantitatively. For instance, if rates are 50% higher than competitors’ rates, CRA credit should be given.


Overall we are very satisfied with the changes made to CRA. It is particularly important to us that intermediate banks have the choice of being examined as either a small or large bank. We have been examined as a large bank for years and are experienced with the criteria. We feel these criteria best suit our business operations.

Tom Sinnott




Last Updated 01/10/2006

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