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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

FIRST FEDERAL SAVINGS BANK  

From: Janelle Poppe [mailto:JPoppe@ffsbky.com]
Sent: Thursday, September 16, 2004 3:13 PM
To: Comments
Subject: CRA Proposal

September 16, 2004

To Whom It May Concern:

We strongly 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. This would greatly relieve the regulatory burden imposed on small banks under the current regulation, which are required to met the standards imposed on the nation's largest $1 trillion banks. As a community bank, we would still be required to help meet the credit needs of our community and would continue to be so evaluated by regulators.

We also support the addition of a community development criterion to the small bank examination for larger community banks, however it is our belief that the new community development (CD) criterion should be applied only to banks greater than $500 million up to $1 billion. Community banks up to $500 million now hold about the same percent of overall industry assets as community banks up to $250 million did a decade ago. It is for this reason that we feel the adjustment in CRA threshold is appropriate. Many small banks have to look outside their communities to find appropriate CRA qualified investments. Surely this result was not intended by Congress when it enacted the CRA.

We strongly oppose making the CD criterion a separate test from the bank's overall CRA evaluation. Such differentiation creates the impression that CD lending is different from the provision of credit to the entire community. The current small bank test considers the institution's overall lending in its community. A separate test would create an additional CD obligation and regulatory burden, eroding the intent of the streamlined exam.

In conclusion, we 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. This change will go a long way toward eliminating the current distortions in the regulations that result in a small bank being told to invest in regional affordable housing bonds for an urban area not in the bank's community.

Sincerely,
B. Keith Johnson
President / CEO
First Federal Savings Bank

Last Updated 09/28/2004 regs@fdic.gov

Last Updated: August 4, 2024