FARMERS STATE BANK
From: Morris Neighbor [mailto:Morris_Neighbor@fsbmail.net]
Sent: Monday, September 13, 2004 4:13 PM
To: Comments
Subject: CRA
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
500 17th Street NW
Washington, DC 20429
RE: Community Reinvestment Act Proposal
RIN 3064-AC50
Dear Mr. Feldman:
Farmers State Bank appreciates being able to comment on your proposal
to increase the asset size for eligibility under the small bank
examination procedures from $250 million to $1 billion.
Our institution strongly supports your proposal. The overall impact
in
my state would result only 32 additional institutions being treated
as
small banks for examination purposes. The compliance burden for these
institutions would be significantly decreased, allowing them to allocate
resources to products and services within their communities.
We cannot, however, support the additional proposed changes which
would
add additional community development criterion to the standards for
banks between $250 million and $1 billion. Passage of these changes
would defeat the original intent of the proposal, which was to provide
these very institutions with relief from regulatory burden. Banks
hoping to take advantage of channeling newfound resources into lending,
investments and services in their communities would find themselves
channeling those funds back into compliance efforts.
The FDIC states in their proposal that it is concerned that smaller
institutions currently covered by large bank tests have noted
difficulties with making qualified investments and the difficulties
with
competing with larger institutions for limited investment opportunities.
Also of concern is the cost in maintaining staff and resources. The
new community development criterion would not eliminate these concerns
and would place these institutions right back into the same difficult
position.
We take the spirit and intent of the Community Reinvestment Act
seriously. We understand that no community bank will survive without
meeting the needs of the community. We urge you to allow banks to
dedicate as much of their resources as possible to meeting those
needs.
Thank you,
Morris Neighbor
Chairman of the Board
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