Virginia Bankers Association
From: Robert Chapman [mailto:rchapman@bankofthejames.com]
Sent: Tuesday, October 05, 2004 12:10 PM
To: Comments
Cc: wayers@vabankers.org
Subject: RIN #- 3064-AC50 Community Reinvestment Act (CRA)
Mr.. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
FDIC
550 17th Street, NW
Washington, DC
Dear Mr.. Feldman:
I hope this letter finds you in good health and good spirits. I am
writing on behalf of the Virginia Bankers Association on the FDIC's
proposed changes to its CRA regulation. We applaud the FDIC's proposal
to raise the definition of "small bank", for purposes of
determining those banks eligible for the streamlined examination
standards, from $250 million in assets to $1 billion in assets regardless
of holding company affiliation. We believe the arguments in support
of such a change are compelling, and urge the FDIC to finalize its
proposal at the earliest possible time.
We stress that community banks in Virginia, many of which are state
non-member banks, are under enormous regulatory strain. New requirements
under the USA Patriot Act and in particular the Sarbannes-Oxley Act
have pushed the overall burden on such banks to a new high. This
burden hits us particularly hard as we do not have the resources
available to address compliance that the large banks have. In light
of this compliance burden, we believe the FDIC should remain ever
vigilant in reducing the burden whenever it can. CRA is an area where
the FDIC can, and should, reduce the burden on small banks.
Let me also say that our bank by the very nature of our business
lends to all segments of the communities we serve. CRA loans are
an important part of our business and we seek such loans. Raising
the threshold to $1 billion will not reduce CRA loans; it will reduce
unnecessary and costly red tape thereby allowing us to remain competitive.
Finally. we note that increasing the threshold to $1 billion will
not impact the vast majority of bank assets, which, because they
are held by large institutions, will still be subject to the full
CRA examination process. But it will relieve smaller institutions
of unnecessary and, we believe, inappropriate regulations. Again,
the cost of compliance for institutions just above the current threshold
is disproportionately high relative to institutions above the threshold.
The FDIC is right to address this by increasing the threshold to
$1 billion.
In summary, we commend the FDIC for pursuing the right course on
this issue. Making CRA easier for us in the community bank world
will ease compliance burdens and allow us to more effectively compete
in the marketplace. We appreciate the opportunity to comment.
Sincerely,
Robert R. Chapman, III
President & CEO
Bank of the James
Lynchburg, Virginia
|
