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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

FIRST SECURITY BANK

September 15, 2004

Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC  20429

Re: Community Reinvestment, RIN Number 3064-AC50; Proposal to Expand Eligibility for the Streamlined CRA Exam

Dear Mr. Feldman:

As a community banker, I join my fellow community bankers throughout the nation in strong support of the FDIC's proposal to increase the asset size limit of banks eligible for the streamlined small-bank CRA examination. I also strongly support the elimination of the separate holding company qualification.

The proposal will greatly alleviate unnecessary paperwork and examination burden. Reinvesting in our communities is something we do everyday. My community bank will not survive if my community doesn't thrive. My bank must be responsive to community needs and promote and support development.

Making it less burdensome to undergo a CRA exam will free up resources that can be redirected to the community for loans and other services.

The streamlined CRA exam is not an exemption from CRA. It is a more cost effective and efficient CRA exam. It doesn't make sense to evaluate a $500 million or $1 billion bank using the same exam procedures as for $100 billion or $500 billion bank.

One of the problems with the current large bank CRA exam is the definition of "qualified investments" is too limited. Qualified investments can be difficult to find. As a result, many community banks (especially those in rural areas) have to invest in regional or statewide mortgage bonds or housing bonds to meet CRA requirements. These investments actually take resources away from the bank's local community. Community banks and communities would be better off if the banks could truly reinvest those dollars locally to support their own local economies and residents.

The proposal will help rural banks meet the special needs of their communities by expanding the definition of "community development" to include activities that benefit rural residents and low- and moderate-income individuals. Rural banks are frequently called upon to support needed economic or infrastructure development such as school construction, revitalizing Main Street, or loans that help create needed or better-paying jobs. These activities should not be ineligible for CRA credit because they do not benefit only low- or moderate-income individuals.

The FDIC's proposed changes to CRA are needed to help alleviate regulatory burden. Without changes such as this, more and more community banks like mine will find they cannot sustain independent existence because of the crushing regulatory burden, and will opt to sell out. For many small towns and rural communities, the loss of the local bank is a major blow to the local community. By easing regulatory burden, it will make it easier for community banks like mine to continue to provide committed service to local communities that few other financial service providers are willing to do.

Thank you for considering my views.

Sincerely,

Matt W. Amundson
President
First Security Bank
Hendricks, MN

Last Updated 10/16/2004 regs@fdic.gov

Last Updated: August 4, 2024