FOR IMMEDIATE RELEASE
CRA Proposal Will Alleviate Reg Burden for Community Banks
Washington, D.C. (Jan. 20, 2004) - The Independent Community Bankers of America applauds the proposal of federal bank regulators to increase the asset size limit for banks eligible for the small bank streamlined Community Reinvestment Act examination from $250 million to $500 million and to eliminate the $1 billion holding company size qualification. As a result, regulatory paperwork and examination burden on more than 1,000 community banks will be eased.
"We commend the regulators for making this change to CRA regulations that will do more than any other to emphasize performance over process and eliminate unnecessary regulatory burden," said ICBA president/CEO Kenneth A. Guenther.
ICBA has long urged federal regulators to increase the CRA small bank size limit to $2 billion. A 2002 Grant Thornton/ICBA study compared CRA compliance examination costs between "small" and "large" community banks. The study showed that these costs can more than double when a bank exceeds $250 million in assets and is no longer subject to the streamlined CRA exam.
"In an age of trillion dollar banks, examining a $500 million bank using the 'large bank' CRA exam procedures is completely unwarranted," said Guenther. "Increasing the small bank size limit will not undermine the purposes of CRA. Instead it will free larger community banks from unnecessary costs, improving their productivity and enhancing their ability to meet the credit needs of their communities. The bulk of CRA examination resources should be focused on truly large banks whose hundreds or thousands of local branches never see a CRA examiner, not on community banks that cannot thrive unless they serve their communities."