Federal Deposit
Insurance Corporation

Michael Vehle
PO Box 1246
Mitchell, SD 57301

September 15, 2004

Comments to FDIC

Dear Comments to FDIC:

Rural areas and rural Community Banks are different than their large city Bank cousins. Without changes we may eventually force smaller community banks to sell out to the large chain banks and for many small towns and rural communities, the loss of the local bank is a major blow to the local community.

As an employee of a community bank, I join 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. I also strongly support the elimination of the separate holding company qualification.

The proposal will greatly alleviate unnecessary paperwork and examination burden without weakening our commitment to reinvest in our communities. Reinvesting in our communities is something we do everyday as a matter of good business.

Making it less burdensome to undergo a CRA exam by expanding eligibility for the streamlined exam will not change the way this bank does business. In fact, it will free up human and financial resources that can be redirected to the community and used to make loans and provide other services.

Banks subject to the simplified CRA exam are still fully obligated to comply with CRA. However, it just doesn't make sense and is inequitable to evaluate a $500 million or $1 billion bank using the same exam procedures as for $100 billion or $500 billion bank.

One of the problems with the current large bank CRA exam is that the definition of "qualified investments" is too limited, and qualified investments can be difficult to find. The advantage to this proposal is that it continues to focus on community development, but considers investments, lending and services.

Similarly, the proposal will help rural banks meet the special needs of their communities by expanding the definition of "community development" so that it includes activities that benefit rural residents in addition to low- and moderate-income individuals.

Rural areas are different and rural banks are frequently called upon to support needed economic or infrastructure development such as school construction, revitalizing Main Street, or loans that help create needed or better-paying jobs. These activities should not be ineligible for CRA credit because they do not benefit only low- or moderate-income
individuals.

The FDIC's proposed changes to CRA are needed to help alleviate regulatory burden and inspire investment in the local communities these banks serve.

Thank you for considering my views.

Sincerely,

Michael Vehle
605-996-0554