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FDIC Federal Register Citations



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FDIC Federal Register Citations


Brentwood Bank

From: John Cost [mailto:JCost@brentwoodbank.com]
Sent: Friday, September 17, 2004 9:29 AM
To: Comments
Subject: Community Reinvestment Act

As a community banker, I strongly support the FDIC's proposal to raise the threshold for the streamlined small bank CRA examination to $1 billion without regard to 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 standards imposed on the nation's largest $1 trillion banks. Community banks would still be required to help meet the credit needs of their entire community and would continue to be so evaluated by their regulator.

I support the addition of a community development (CD) criterion to the small bank examination, but believe the new CD should be applied only to banks greater than $500 million. Since community banks under $500 million now hold the same percent of overall industry assets as community banks up to $250 million did 10 years ago when the revised CRA regulations were adopted, this adjustment is appropriate. As you are no doubt aware, it is extremely difficult for small banks, especially those in the rural areas, to find appropriate CRA qualified investments. Many of these banks have to make regional or statewide investments that are unlikely to ever benefit their own communities. I'm sure this wasn't the intention of Congress when they enacted CRA.

I strongly oppose making the CD criterion a separate test from the overall CRA evaluation. The current small bank test considers the overall lending in the community. This separation would create the impression that CD lending is different from the provision of credit to the entire community and would create an additional CD obligation and regulatory burden, thereby eroding the intent of the streamlined exam.

I strongly 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. This change will go a long way toward eliminating the current distortions in the regulations that result in a small rural bank being told to invest in regional affordable housing bonds for an urban area not in their community.

Thank you for your consideration.


John Cost
Loan Administration Officer
Brentwood Bank
411 McMurray Road, Suite 200
Bethel Park, PA

 

Last Updated 09/17/2004 regs@fdic.gov

Last Updated: August 4, 2024