Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official. 
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
Https
The site is secure. 
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
Federal Register Publications

FDIC Federal Register Citations



Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations




FDIC Federal Register Citations


WASHINGTON COUNTY BANK

September 10, 2004

Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, 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 rural community banker who started large bank CRA reporting January 1 of this year, I urge your support for the streamlined small-bank CRA examination and the elimination of the separate holding company qualification. As a small bank of $40 million , we found the cost of training, data capture, and labor demands to be one of the largest non-interest budget items for the year!

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.

One of the problems with the current large bank CRA exam is that the definition of "qualified investments" is too limited, and qualified investments can be difficult to find. As a result, our bank had to invest in regional housing bonds to meet CRA requirements. These investments may benefit other areas of the region, but they actually took resources away from the Tekamah community. Community banks and communities would be better off if the banks could truly reinvest those dollars locally to support their own local economies and residents. Communities like Tekamah, Herman, Craig, and Decatur, Nebraska deserve viable infrastructure, quality education, adequate fire and police protection, and locally funded housing and economic development. Expanding the definition of "community development" to include these activities for rural citizens in addition to low and moderate income individuals only makes good sense.

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 as happened in Tekamah. What used to be a century old local bank with local directors and lifelong ties to the community is now a branch bank. By easing regulatory burden, it will make it easier for other community banks 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,
Larry N. Nelson, President
Washington County Bank

Last Updated 09/27/2004 regs@fdic.gov

Last Updated: August 4, 2024