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FDIC Federal Register Citations

COMMUNITY TRUST BANK

From: Danny Van [mailto:dvan@ctbonline.com]
Sent: Thursday, September 02, 2004 12:30 PM
To: Comments
Subject: RIN 3064-AC50

I am writing in support of the proposed changes to the CRA definition with respect to the definitions of small and large banks. I work for a $400MM community bank, and although we are committed to the communities we serve, the "large" bank definition and requirements are very difficult for a small, by today's standards, bank like ours to fulfill.

We employ a full time CRA Officer and a separate Community Development Officer to help coordinate and facilitate our various CRA, financial literacy, affordable housing, and various other initiatives, and will continue to do so even in the event of a rules change. Our commitment to CRA is sincere, and we have received recognition in numerous ways for our efforts, including being noted as a "model site" by FDIC on its website for our excellence with the Money Smart program. We are a leader in lending on affordable housing developments, having done more LIHTC projects, I would guess, than any bank of our size in our state. We received recognition by a leading community organization in our area as the top corporate citizen in our city this year for our various initiatives and programs. We are one of the largest users in our state of the various FHLB programs, and have been awarded several grants for affordable housing and economic development purposes. By utilizing a strategy of partnering with community organizations, taking advantage of governmental and quasi-governmental programs, and providing facilitation and flexible financing, we have achieved many successes in these areas.

Despite our many successes, it is highly difficult, based on the existing rules, to achieve anything more than a mediocre result on a CRA exam, due to the limitations of being a small bank and operating in a largely rural area. Some of the challenges are due in part to statistical anomalies resulting from having a very large number of low income persons in a limited geographical area.

For instance, due to there being a large number of low-income persons in Union Parish, there exist no low-income census tracts in Union Parish, which is one of only three parishes in which we operate. The reason is that the median income is so very low there, to classify someone as "low income" requires them to be very, very poor, so consequently there are not enough concentrations of very, very poor in any single census tract for a tract to qualify as low-income. Use of a median income as a valid benchmark in an area requires that incomes be arrayed along somewhat of a normal distribution of incomes. This is possible and valid when utilized for areas where there is a broad mix of incomes and socioeconomic factors, and where enough population density exists to validate the data. However, when a large percentage are in poverty, the data utilizing a median as a benchmark becomes meaningless, because of the absence of middle-income and high-income persons. "Low", as defined, becomes simply a function of being a low percentage of an already very low number. I would invite anyone who cares to come, to Union Parish, for a tour, and I would challenge that person to conclude that there are no low-income tracts there, when measured by any reasonable and valid standard.

Regardless, and I understand that such an issue is not specifically an FDIC issue, but it highlights the difficulties that a small bank, with relatively few branches in a small geographic area, can encounter when trying to fulfill the "large bank" requirements, despite a true and sincere commitment to the communities we so eagerly serve.

Thank you for your time, and for providing those of us in the industry an opportunity for comment.

Sincerely,

Danny Van
President
Community Trust Bank
1800 Hudson Lane
Monroe, LA 71201

Last Updated 09/03/2004 regs@fdic.gov

Last Updated: August 4, 2024