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Last update: 09/30/14

ICBA News Release Header

FOR IMMEDIATE RELEASE

ICBA Expresses Profound Disappointment on Withdrawal of CRA Proposal

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.






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