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ICBA Strongly Supports Increase in Size Limits for CRA Streamlined Exam

Washington, D.C. (Oct. 20, 2004 )- Independent Community Bankers of America (ICBA), the nation's largest banking trade association, sent a comment letter today to the Federal Deposit Insurance Corp. (FDIC) strongly urging approval of the proposal to increase the asset-size limit for eligibility for the streamlined "small-bank" Community Reinvestment Act (CRA) examination to $1 billion-an action ICBA has advocated for many years.

"Expanding eligibility for the streamlined exam will not change the way community banks do business or lessen their resolve to reinvest in their communities," wrote ICBA in its comment letter. "In fact, by alleviating unnecessary paperwork and examination burden, it will allow community banks to reallocate and redirect both human and financial resources to their communities and customers."

Among the reasons for ICBA's support of the increase:

  • The $1 billion limit reflects demographic shifts in the industry in the 10 years since the $250 million limit was set;
  • The streamlined exam is in full accord with the stated purpose of the CRA;
  • Banks under $250 million in assets have been successful and committed contributors to their communities under the streamlined exam for nearly 10 years;
  • The proposal includes a new community development criterion to the streamlined exam for banks between $250 million and $1 billion in assets, allowing them flexibility to balance community development activities based on real-life community needs.

"Obviously there has been a great deal of recent interest in CRA," said Karen M. Thomas, executive vice president of ICBA. "All banks will continue to comply with CRA requirements under the proposed changes. The difference is more community banks will avoid wasteful administrative costs and be able to ensure funds are reinvested locally-not diverted elsewhere."

The full text of the letter is available at /advocacy/commentlettersdetail.cfm?ItemNumber=3853&sn.ItemNumber=1711.

ICBA's document "The Truth about CRA," outlining the facts regarding the change to the CRA asset-size limits, is available at /advocacy/index.cfm?ItemNumber=1775.