NORTHSTAR BANK
August 243, 2004
Robert E. Feldman, Executive Secretary
Attn: Comments
Federal Deposit Insurance Corporation
550 17th Street North West
Washington, DC 20429
Subject:
Community Reinvestment RIN 3064-XXXX
Dear Mr. Feldman:
Northstar Bank is a four year old $100 million state non-member
bank, with two offices in the Thumb of Michigan. Our main office
is located in Bad Axe, Michigan, approximately 100 miles north of
Detroit, Michigan. Farming and agri-business are primary building
blocks of our local economy. The bank is owned by Northstar Financial
Group, Inc. which also has a bank just north of Metropolitan Detroit.
Our organization supports
the increasing of the size limit for eligibility for the small-bank
exam from $250 million to $1 billion and the elimination
of the separate holding company qualification. As community bankers
we realize the "streamlined" examination procedures do
not exempt our organization from the original mandate of the Community
Reinvestment Act. We feel the proposed changes actually recognize
how community banks function. Community banks must meet the financial
needs of our local communities or we will cease to exist.
It has been my experience the Directors, Officers, Staff, and, most
importantly, the Shareholders of community banks have a strong bond
with their local area. They have both a financial interest, and a
personal pride which creates a vested interest in the success of
their hometown.
The adding of the new community development criterion to small bank
performance standards will need a common sense approach on the part
of-the banks and the Regulators. While a community bank may support
the idea of a particular community development project it might be
beyond the risk tolerance or expertise of the institution. The dollar
amount or required terms of sorne projects could be beyond the banks
ability to prudently fund. The Regulators must consider these factors
when judging a bank's community development activities.
The expansion of community development definitions to include a
broader range of activities in rural areas does recognize the unique
characteristics of rural America. This change will provide additional
flexibility needed by community banks to meet the community development
criterion.
The
Community Reinvestment Act was enacted to encourage banks to provide
financial service to all parts of the communities where
they collect deposits. The FDIC's proposal does not change that,
but provides some relief from the burden of regulatory compliance.
I appreciate
the opportunity to comment on the proposed changes.
Sincerely
John R. Booms
President & CEO
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