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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations


Bankers’ Bank of the West

September 13, 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:

My name is Roger R. Reiling, President/CEO of Bankers’ Bank of the West, Denver, Colorado. We are a bankers’ bank and although we are exempt from CRA, we are a correspondent bank who has relationships with over 400 community banks in nine states, I am writing to support the FDIC’s proposal to raise the threshold for the streamlined small bank CRA examination to $1 billion without regard to the size of the bank’s holding company. Many of our calls on the community banks evolve into discussion on the tremendous burden in terms of cost and time of man hours the current regulation imposes. To our knowledge without exception these banks are and have always been ready to meet the credit needs of their entire community. Under your new proposal, community banks would still be required to help meet the credit needs of their communities and would continue to be evaluated by their regulator.

We also support the addition of a community development criterion to the small bank examination for larger community banks, but believe that the FDIC should adopt its original $500 million threshold without a Community Development standard. The new Community Development standard should be applied only to banks greater than $500 million up to $1 billion. As your examiners have found, it is difficult for small banks, especially in rural areas, to find appropriate CRA qualified investments in their communities. To often we have seen small banks make investments that are extremely unlikely to benefit the banks’ own community. We do not think that was the intent of Congress when it enacted CRA.

Another reason to support the FDIC’s criterion is that when the small banks go over the $250 million level, they must completely reorganize their CRA program with a new reporting, monitoring and investment program. Should the FDIC adopt its proposal, a state nonmember bank would move from the small bank examination to an expanded but still streamlined small bank examination, with the flexibility to mix Community Development loans, services and investments to meet the new Community Development criterion. This would be far more appropriate to the size of the bank, and far better than subjecting the community bank to the same large bank examination that applies to $1 trillion banks.

We would strongly support the FDIC’s proposal to change the definition of “community development” from only focusing on low and moderate-income area residents to including rural residents. I think that this change in the definition will go a long way toward eliminating the current distortions in the regulation.

In conclusion, I believe that the FDIC has proposed a major improvement in the CRA regulations, one that much more closely aligns the regulations with the Community Reinvestment Act itself, and I urge the FDIC to adopt its proposal, with the recommendations above. I will be happy to discuss these issues further with you, if that would be helpful.

Sincerely,

Roger R. Reiling
President/CEO

 

Last Updated 09/15/2004 regs@fdic.gov

Last Updated: August 4, 2024