Federal Deposit
Insurance Corporation

Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold for the Small Bank CRA Streamlined Examination

Dear Mr. Feldman;

The Ohio Bankers League strongly supports the efforts of the FDIC to modernize CRA regulations by raising the threshold for the streamlined examination from $250 million to $1 billion, however we urge you to modify the proposed community development criteria as we outline in greater detail below.

The OBL is a trade association representing virtually all of the FDIC insured depository institutions doing business in Ohio. Our members include nearly 280 commercial banks, savings banks and thrifts ranging from small locally controlled and managed mutual organizations to some of the largest bank holding companies that do business across the country and around the globe. Fifty five of our members would be impacted by your proposal.

As stated above, the OBL strongly supports the FDIC’s proposal to raise the threshold for the streamlined CRA examination to $1 billion regardless of the size of the bank’s holding company. This would greatly relieve the regulatory burden imposed on small banks under the current regulation, which are required to meet the same standards as the nation’s largest multi-billion dollar banks and bank holding companies, which have far greater compliance resources.

The Ohio Bankers League also supports the addition of a community development criterion to the small bank examination for community banks that are larger than $500 million. It appears to be a significant improvement over the investment test. We also support the FDIC’s proposal to change the definition of “community development” from only focusing on low- and moderate-income area residents to including rural residents.

We oppose however making the community development criterion a separate test from the bank’s overall CRA evaluation. Such differentiation creates the impression that community development lending is different from the provision of credit to the entire community. The current small bank test considers the institution’s overall lending in its community. The addition of a category of community development lending (and services to aid lending and investments as a substitute for lending) fits well within the concept of serving the whole community. A separate test however would create an additional obligation and regulatory burden, eroding the intent of the streamlined exam.

The OBL would also encourage the FDIC however to stick with its original proposal of applying the current streamlined exam, which does not include an investment component, for banks between $250 million and $500 million. Since the streamlined exam does not currently include an investment test the addition of a new community development test for banks of this size would not achieve the FDIC’s original goal of easing the regulatory burden on community banks between $250 million and $500 million. Given inflation and the growth of bank assets since the original streamlined exam was adopted, it would be appropriate to make this increase as an inflation adjustment without the additional burdens of the new community development criteria

The FDIC proposal is a major improvement in CRA compliance, recognizing that there is a big difference in resources and compliance capabilities between small and large banks. We urge you to adopt the proposal with the revisions we recommend above.

Respectfully submitted;
Jeffrey D. Quayle
Senior Vice President & General Counsel