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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

SHOREBANK PACIFIC

September 29, 2004

Robert E Feldman
Executive Secretary
Attn: Comments/ Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: RIN Number 3064-AC50
Dear Mr. Feldman:

As - one of the few banks operating under a strategic plan for CRA purposes, and
- as one of four banks in the Pacific Northwest with a outstanding CRA rating, and
- as a bank primarily focused on rural development,

we write to you to encourage:
- the increased threshold for determination of a small bank without regard to the size of the holding company, and
- the provision for loans to rural residents as qualification for community development credit.

The existing regulations do not give proper credit to rural banks because the very nature of rural communities is that their populations blend the income within an SMSA so that they are not considered low income even though there are significant low income groups within any population classification. Our headquarters is in the second lowest income per capita county in Washington state, but neither the county nor the town are considered a low income area for CRA purposes. This is one reason why we adopted the strategic plan approach to CRA compliance. That condition just didn’t make sense. Our loans to entrepreneurs in these areas are at least as oriented to traditional community development criteria as the same loans that we make in urban low income SMSAs.

To arrive at the strategic plan was a very intensive process wherein we dedicated .5 FTE for a year to establish the plan and create the monitoring and reporting structure. For a bank of less than $100MM in assets this is a significant commitment. Another reason for this choice of approach was because we are owned by a holding company with assets in excess of $1B and thus needed to meet the large bank test. This too imposed an unnecessary burden since we operate as an independent entity and therefore were required to assume the same burden as a larger institution without the resources. This cost has directly impacted our earnings. That doesn’t seem to be the desired outcome of the regulation.

Smaller community banks do not necessarily have the resources nor the expertise to make the same investment decisions as larger banks. As a result granting more flexibility to these banks to meet community development goals utilizing their individual expertise, which is often closer proximity to the customer that leads to financial advice, to the community that provides leadership, and to developing public private partnerships are ways that the community bank operates to the greater benefit that cannot is not provided by the larger institutions. Allowing them credit for doing so not only rewards what is already being done, but recognizes the unique benefit that these institutions provide to their communities.

Sincerely,
David C.E. Williams
ShoreBank Pacific
203 Howerton Way
Ilwaco, WA

Last Updated 10/08/2004 regs@fdic.gov

Last Updated: August 4, 2024