Heritage Bank
September 17,
2004
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street N.W.
Washington DC 20429
RE: CRA COMMENT LETTER (RIN Number 3064-AC50)
Dear Sir:
Heritage Bank
supports the CRA Proposed Rule dated 8/20/04, along with community
bankers
across the nation. The new proposal is very
much “on target” to reduce regulatory burden and make
better use of the limited resources of banks in the $1 billion and
less size range.
Banks up to $1
billion in assets are very much still “small
banks” in today’s banking environment and the rules need
to evolve to reflect that fact. The big are getting bigger, the small
independent banks are disappearing, and those of us who are left
in the middle will survive. It is not reasonable to subject a Wells
Fargo-size institution and a $250-999 million asset-size institution
to the same requirements.
Why? First, the
requirements are unwarranted. As a community bank, we continually
seek out credit
opportunities. If we didn’t,
we wouldn’t exist. Second, the large bank CRA rules, especially
those related to reporting requirements, are too burdensome for even
banks in the $250-999 million size range to comply with, as our technology
cannot accomplish this reporting. In rural areas such as where Heritage
Bank operates, measuring where loans are originated, size of borrowers,
etc. is all rather a moot point.
The result of the current CRA regulations? Increased overhead cost
thus increased cost of credit to the communities we all serve; more
bank time spent reporting, less time spent lending, developing and
educating our communities. That is clearly counterproductive, and
the proposed CRA rule will improve this situation greatly.
I would further
encourage the agencies to act expeditiously on this legislation,
since reporting
requirements begin and end on a calendar-year
basis. From a practical standpoint, we need relief ASAP so that preparations
aren’t made (i.e. resources wasted) to comply with the current
CRA rules for the 2005 calendar year.
Thank you for your consideration of these comments in support of
the proposed rule.
Sincerely,
Sara Arnett, Compliance Officer
Heritage Bank
Wood River, NE
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