From: Rhunnicutt@westernbankofcheyenne.com [mailto:Rhunnicutt@westernbankofcheyenne.com]
Sent: Tuesday, September 14, 2004 1:35 PM
To: Comments
Subject: Community Reinvestment, RIN#3064-AC50
Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
FDIC
550 17th Street, NW
Washington, DC 20429
September 14, 2004
Dear Mr. Feldman:
I'm joining community bankers throughout the nation in strong support
of the
FDIC's proposal to increase the asset size limit of banks eligible
for the
streamlined small-bank CRA examination. The current "one size
fits all"
regulations and philosophy to evaluate and compare a community bank
of $1
billion with a $100 billion big city or national bank is not realistic.
I
agree with other community bankers that this new FDIC proposal will
greatly
alleviate some unnecessary paperwork and examination burden without
weakening our commitment to reinvest in our communities.
I also support
the FDIC's proposed "community development" requirement
for
banks between $250 million and $1 billion and agree it is more flexible
and
more appropriate than the large bank investment test. The advantage
to this
proposal is that it continues to focus on community development,
but also
considers investments, lending and services. This proposal would
let
community banks pursue community development activities that both
meet the
local community's needs and yet make sense in light of the bank's
strategic
strengths.
Similarly, the proposal will help even smaller rural banks meet
the special
needs of their communities by expanding the definition of "community
development" so that it includes activities that benefit all
rural residents
in addition to low to moderate income individuals. Rural banks are
frequently called upon to support needed economic and/or infrastructure
development such as recreation center construction, "main street"
revitalizing, and/or industrial park loans that help create needed
or better
paying jobs. These activities should not be ineligible for CRA credit
just
because they do not directly benefit the low to moderate income individuals.
This a very appropriate time for me to write this letter. Our community
bank, is currently undergoing a two week CRA examination. In preparation
for this exam, three of our key staff spent three weeks working on
the
pre-exam paper work. The result of their efforts was a 12"x18"x9" box
of
paper being sent to FDIC. In all reality, our community would have
been
better served by our staff and financial resources being used to
serve our
customers and participate in community activities. I would also strongly
support the further reduction of CRA examination requirements for
even
smaller banks (<$250 million).
I believe the CRA requirement for small community banks in a competitive
market is questionable to begin with. We are a growing $70 million
community bank competing with numerous state and national banks and
ten or
more credit unions. If our bank is not responsive to the needs of
our
customers and community, we would not be competitive and would not
survive
long in our community. Having or not having CRA requirements would
not make
a difference in how we do business nor how we serve the community.
Reinvesting in our customers and community is something we do everyday
as a
matter of general business.
The FDIC's proposed changes to CRA are needed to help alleviate
continuing
growth of regulatory burden. Community banks are finding the regulatory
burden continues to grow unabated and is putting undue pressures
on
personnel, overhead expenses and more importantly on customer services.
As
costs of compliance increase (financial and personnel) the lure of
selling
to bigger banks also increases. In most cases, mergers and consolidations
negatively impact and reduce customer service, community awareness
and
understanding the special needs of small communities. Understanding
of
local conditions falls prey to out-of-town decisions and regimented
policy
and procedures. Reducing regulatory burden, will make it easier for
community banks like ours to continue to provide flexible and appropriate
service to our communities that the larger financial service providers
are
unable or unwilling to provide.
Sincerely,
Rick Hunnicutt
Chairman of the Board
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