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FDIC Federal Register Citations

Western Commerce Bank

September 16, 2004

Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
E-mail: comments@fdic.gov.

RE: Community Reinvestment, RIN number 3064-AC50; Proposal to Expand Eligibility for the Streamline CRA Exam

Dear Mr. Feldman:

As a community banker, I support the FDIC’s proposal to increase the asset size limit of banks to $500,000,000 for CRA Examinations. We have always strived to provide loan and deposit products for all income levels of customers, along with being a leader in government programs for small businesses and farm and ranch loans. Our loan to deposit ratio’s for the past 20 plus years has exceeded 75%, with the average in New Mexico around 55%. These are areas that should be considered, as you can verify that banks are supporting their community.

Western Commerce Bank had received Outstanding CRA Ratings until we were moved to the large bank category in 2001. This was very disappointing to our Board, President, Officers and employees. Our asset size was only $257,000,000 and since then has averaged between $251M and $257M, which is not a large bank. The examiner for our November 2002 CRA Exam advised us that we should be spending approximately $85,000 in donations for low and moderate area organizations. We are located in Carlsbad, Loving, Hobbs, Lovington, Tatum, NM with one location in Albuquerque. In all of the small towns we are in there is only one designated moderate-income area in Hobbs, although Albuquerque does have both low and moderate areas. This makes it hard for us to find investments that would qualify for the Investment test, as well. Living and working in rural communities we try to be involved in local activities to support our areas, but they do not qualify as low to moderate income area activities.

We strive to receive an Outstanding CRA Rating, therefore we invested in a $3,000,000 CRA Qualified Investment Fund with CRA Fund Advisors. This was to show the examiners we want to comply by investing in development programs for low and moderate income areas. The CRA Fund Advisors, who are nationwide, could only locate a Freddie Mac Pool A26091 that has $293,200 in mortgage loans located in Albuquerque that are in the low and moderate-income areas. Not only that, but the value of the Pool has been running below market. Our External Auditor and CPA required us to “Mark It To Market” each quarter resulting a reduction in capital of whatever the unrealized loss was for the end of quarter. But our President and Directors feel that we should participate in this program to help with our CRA Rating.

These are just a few topics that I wanted to share with you in regard to what rural community banks are challenged with. I strongly recommend the move from $250 million to $500 million in CRA Examinations to help release the regulatory burden on small banks. This will allow the smaller bank to concentrate on truly helping their community and by working with them hands on, through loan programs and local community activities. We take our CRA evaluation seriously and in the past have used our record keeping activities to show our commitment to our communities.

Thank you for your consideration,
Brenda K. Suggs
Vice President and Compliance Officer
Western Commerce Bank
PO Box 1358
Carlsbad, NM 88221-1358
bsuggs@wcb.net

 

Last Updated 10/04/2004 regs@fdic.gov

Last Updated: August 4, 2024