Federal Deposit
Insurance Corporation

Mr. Robert Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington DC. 20429-9990

Re: RIN 3064-AC50

The City County Reinvestment Task Force (RTF) is chartered by the City Council and County Board of Supervisors to monitor lending practices and develop strategies for reinvestment in the region. It was established by joint resolution in 1977 and is Co-Chaired by the City Council and the County Board of Supervisors. It has an extraordinary record of success in facilitating access to capital in underserved markets generating billions of home loans, small business loans, affordable housing and community investments ($1.9B in 2003). Through local attention to the CRA and long term strategic planning and analysis the CRA has become one of the primary tools for community stability and revitalization in the region. These accomplishments occur because of the "partnership' that has been forged between community, lenders and government. The partnership depends on each party bringing its full authority and potential to the work.

Government has provided much protection and risk diversion with affordable housing, investments and small micro lending efforts. This was offered with the confidence that the lenders would equally commit. The RTF has done constant and disciplined assessment of credit access and through dialogue, face to face, many new and innovative solutions have been created, so much so that a thriving and profitable "industry" has emerged in this region focused on economically healthy communities.

Unfortunately one of the least accessible or available players has not been at the table and has not strategically benefited or been a player in this twenty-five year initiative. Strangely enough it is banks under $1Billion that have pushed themselves away from the challenge and avoided major or vital commitments. Even when efforts were very near geographically or directly in concert with their primary business plan the small banks have refused to work in concert with the major lenders, the community and government.

Why?

Having observed and worked with many financial institutions it is my assessment that smaller banks tend to be focused on serving the primary needs of their boards and developing the bottom line for those small group of key investors. Most of those investors know very little about the potential markets in low and moderate-income communities. They are largely focused on suburban depositors and businesses and lack the resources to look beyond that which is familiar and common to their personal culture.

That is the reason why they seek exemption. They are iconoclastic, maybe self-made men who have assets adequate to create a small bank and micro mange the lending and investment strategies with a myopic eye and a prejudice against foreign markets and ethnic consumers.

By changing the rules and modifying the deposit standards you are directly perpetuating a very divisive and exclusionary national banking policy. I urge you not to do that. All of the research and work that has been done to validate CRA lending and investments as viable profit centers for small banks, as well as large, will be violated. Your decision is based on something other than reality. Please consider the alternative. Do not exempt nks with assets under $1B from the CRA.

Sincerely,