Federal Deposit
Insurance Corporation

From: Randy Lawrence [mailto:rlawrence@TXNS.ORG]
Sent: Monday, September 20, 2004 3:59 PM
To: Comments
Subject: CRA regulation changes

9-20-2004

To: FDIC

I am the Director of Housing Development for a non profit serving 13 North Central Texas counties surrounding the Dallas-Fort Worth Metroplex. Most of the areas we serve are considered Rural Communities. As such, serving their affordable housing needs are more challenging than when I built affordable housing in the Metroplex itself. I have found that the banking institutions are less responsive to the needs of the rural citizens. They are much more interested in large developments in the metropolitan area. In the case of our Agency we are in the process of developing over 500 units of housing in various locations, most of it new construction, in the rural areas. The size of each development is 35 to 100 units. The total funding needed for all the developments is over $50 Million. The stumbling blocks we run into the most are the funding ratios and pre-development funds, as the banks are looking at each development separately. When I worked in the metropolitan area, the banks were competing for business. You could get grants for the pre-development process from the bank or other private sources.

After carefully studying the proposed changes, I have concerns in regard to the banks being even less willing to work with rural and small affordable housing developments. As of right now, 75% of the banking institutions are "small" banks. This new proposal would increase that to 94%. The proposed changes for the $250 million to $1 billion institutions sound as if they will still give incentive to them to participate in some community development. I am afraid that the language would allow them to look at larger, more "profitable", developments in order to meet criteria for "Outstanding" rating. I feel the regulation should be more explicit in protecting the needs of the rural communities.

You have also asked about a definition for rural. I have dealt with several definitions but the one I believe is most accurate is the one that states that any community not directly bordering a MSA is a rural community if it is 25,000 or under in population.