CONWAY NATIONAL BANK
September 28, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: RIN Number 3064-AC50: FDIC Proposed Increase in the Threshold for
the Small Bank CRA Streamlined Examination
Dear Mr. Feldman:
I am the Compliance Officer and CRA Officer of The Conway National
Bank in Horry County (the largest of the 46 counties in South Carolina,
area-wise) and have been since the positions were created. My bank’s
assets are $660 million. I have been through both the small and large
CRA examinations by my primary regulator, the OCC. I strongly support
the FDIC’s leadership role in its proposal to raise the threshold to $1
billion for the streamlined small bank CRA examination. This would
greatly relieve the regulatory burden currently imposed on small banks
throughout our great nation, not just in metropolitan areas.
I also support the FDIC’s proposal to change the definition of
“community development,” which only focuses on low- and moderate-income
area residents, to include rural residents. During my previous CRA
examination by the OCC, a one million dollar loan to a public utility
authority for the purpose of furnishing water to rural areas of our
community (which includes a number of low- to moderate-income families)
did not qualify under current CD criteria.
On June 25, 1992, I addressed the Federal Financial Institutions
Examination Council in Washington, D.C., concerning regulatory burden in
the banking industry. As I stated then concerning regulation of the
banking industry, I am reiterating now: Listen to the people in the
trenches: the banking officers. We know our business.
As we all know, what was once accepted by society is no longer
accepted. Prior to my employment with CNB in 1975, I was a seasoned
consumer lender, having begun my career in 1965, when the following
practices were standard in the industry:
- As a debt collector in the mid 1960s, I phoned and visited people
at three o’clock in the morning (FDCPA) – things have changed…
- As a loan officer in the late 1960s, I asked young females what kind
of birth control practices they used (ECOA) – things have changed…
- I saw add-on interest rates of six percent compared with simple
interest rates of six percent (TIL) – things have changed…
- I saw ghetto areas red-lined in the late 1960s and early 1970s (CRA) –
again, things have changed...
The banking industry is highly competitive; as society changes, the
banking industry changes with it, as previously mentioned (albeit
sometimes prodded by legislation as all industries are).
From December 15, 2003, through July 14, 2004, the OCC completed 321
CRA evaluations on community banks. The breakdown, which I believe would
be comparable with the other regulatory agencies, is as follows:
Substantial Non-compliance: 0
Needs to Improve: 2
Satisfactory and Outstanding: 319
My calculations indicate that if this is indeed indicative of all
banks, then 99.4 percent of regulated banks today may not even need CRA
regulations – especially not burdensome ones. Remember that Senator
William Proxmire, the main sponsor of the Community Reinvestment Act,
said that this law would not increase the paper burden on banks “by one
piece of paper”.
Maybe it is time for all the regulators to re-visit the burdensome
requirements of CRA – things have changed.
Respectfully,
A. Mitchell Godwin
Vice President
CC: OCC
FRB
ABA
ICBA
SCBA
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