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CENTRAL BANK
September 15, 2004
Mr.
Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit
Insurance Corporation
550 17th St. NW
Washington, DC 20429
Re: Community Reinvestment, RIN Number 3064-AC50;
Proposal to Expand Eligibility for the Streamlined CRA Exam
Dear Mr. Feldman:
As a community banker, I join my fellow 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. My community bank will not
long survive if my local community doesn't thrive, and that means my
bank must be responsive to community needs and promote and support
community and economic development.
Making it less burdensome to undergo a CRA exam by expanding
eligibility for the streamlined exam will not change the way my 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.
It is important to remember that the streamlined CRA exam is not
an exemption from CRA. It is a more cost effective and efficient CRA
exam. Banks subject to the simplified CRA exam are still fully
obligated to comply with CRA. Just as now, community banks would
continue to be examined to ensure they lend to all segments of their
communities, including low- and moderate-income individuals and
neighborhoods. 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.
The FDIC's proposed changes to CRA are needed to help alleviate
regulatory burden. Without changes such as this, more and more
community banks like mine will find they cannot sustain independent
existence because of the crushing regulatory burden, and will opt to
sell out. For many small towns and rural communities, the loss of the
local bank is a major blow to the local community. By easing
regulatory burden, it will make it easier for community banks like
mine to continue to provide committed service to local communities
that few other financial service providers are willing to do.
Thank you for considering my views.
Sincerely,
Donald B. Smith President
Central Bank
Kokomo, IN
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