Member Letter to Congressman Pat Toomey

December 6, 2004

The Honorable Pat Toomey
House of Representatives
224 Cannon House Office Building
Washington, DC 20515

Re: The Increase in CRA "Small Institution" Threshold from $250 million to $1 billion

Dear Mr. Toomey:

This letter is in strong support of the FDIC proposal to increase the asset size of banks eligible for the small bank streamlined Community Reinvestment Act (CRA) examination from $250 million to $1 billion.

As the CRA Officer and Vice President of Lending of a $566 million community bank, I fully support this proposal.

First Star Savings Bank is truly a community bank and we are committed to the communities we serve.

Community banks are struggling with regulatory compliance. When a bank must comply with the requirements of the large bank CRA evaluation process, the costs and burdens increase dramatically. This is an area that could easily be changed to give needed relief without in any way weakening the CRA requirements. The tougher examination should be aimed at the $15 billion institutions, not a $566 million community bank that must serve our communities or we cease to exist as a viable business entity.

I strongly believe increasing the size of banks eligible for the small-bank streamlined CRA examination does not relieve banks from CRA responsibilities but will merely eliminate some of the most burdensome requirements strangling smaller institutions and forcing them to consider selling to larger institutions that can better manage the burdens.

Thank you for your time and attention to this issue.

Sincerely,

Charles Hangen
Vice President of Lending, First Star Savings Bank
CRA Officer

Cc: Joseph Svetik, Paul Sebastian