FDIC Federal Register Citations

First Security Bank

From: Adrian Smith
Sent: Friday, September 17, 2004 9:28 AM
To: Comments
Subject: RIN No. 3064-AC50

I am writing to voice my support for the FDIC proposal to raise the CRA threshold for large banks to $1 billion. Not only would this be more consistent with the recent OTS amendment, but it would also relieve banks of significant compliance burden without compromising the bank's commitment to the community. I am reminded of a comment made approximately a year ago by a recently retired FDIC examiner with whom we have worked. He felt that banks under $1 billion in assets shouldn't be subject to a CRA examination at all, because if a bank of that size is not meeting the needs of its community, it will not survive. A small bank's commitment to its community is a self-enforcing endeavor that is reflected by the bank's ability to sustain itself.

I also strongly support expanding the current definition of" community development" to include activities that include rural residents. In fact, that definition should be even more encompassing. Community
development should apply to any activity that promotes or improves the economic well-being of a bank's assessment area. I think the original intent of the Community Reinvestment Act is to ensure that banks feel and act upon a sense of responsibility to improve the communities they serve. While no one segment should be forgotten, I feel CRA should apply to all of the bank's assessment areas and not be limited to low- and moderate- income areas and individuals.

The amendment as proposed would give banks more flexibility in meeting their CRA obligations and would help in reducing their compliance burden, but at the same time would not exempt the banks from their obligations to meet the credit needs of their communities. While I personally believe it is unfair that banking is the only industry in the nation that is obligated to meet community development standards, I also believe that even without those obligations, community banks would still be the flagships for community development activities in their assessment areas.

Sincerely
Adrian Smith
First Security Bank
Batesville, MS