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Washington, D.C. (July 19, 2004) - The Independent Community Bankers of
America (ICBA) expressed profound disappointment that the Federal Reserve
and the Office of the Comptroller of the Currency have elected to withdraw a
proposal to increase the asset-size limit for eligibility for the streamlined
Community Reinvestment Act exam to $500 million.
As pointed out by John Reich, vice chairman of the Federal Deposit Insurance
Corp., in congressional testimony last month, "The proposal would not
exempt those institutions from complying with CRA…[and]…. would result
in significant regulatory burden reduction for a number of institutions without
weakening the objectives of the Community Reinvestment Act."
At the same time, ICBA applauded the Office of Thrift Supervision for increasing
the asset-size limit for the streamlined exam to $1 billion and recognizing
that community banks are strangling in red tape.
"Community activists have claimed that the proposed change to CRA would
reduce community investments in rural areas," said ICBA President and CEO
Camden R. Fine. "Yet the overwhelming regulatory burden is also causing
consolidation in the industry, especially among smaller community based
banks-pushing the very banks most focused on their communities
out of the community."
Studies show the examination burdens for community banks associated with
the large bank CRA exam can be more than double those of the smaller
bank exam. The examination and data collection requirements consume bank
resources that could otherwise be devoted to community development and service.
"Unless bank regulators and the Congress are willing to take steps to lighten
the growing regulatory burden for community banks - of which the CRA
exam is just one of scores of requirements - community banks will be
less able to provide service to their communities," said Fine.
With different final rules from the federal bank agencies, the debate on
the streamlined CRA exam will likely continue in the Congress. ICBA will
continue to make the case for regulatory burden relief, including an
easing of CRA exam burdens for community banks.
About ICBA
The Independent Community Bankers of America represents the
largest constituency of community banks of all sizes and
charter types in the nation, and is dedicated exclusively to
protecting the interests of the community banking industry. ICBA
aggregates the power of its members to provide a voice for community
banking interests in Washington, resources to enhance community
bank education and marketability, and profitability options to help
community banks compete in an ever-changing marketplace. For more
information, visit ICBA's website at www.icba.org.
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