Federal Deposit
Insurance Corporation

September 16, 2004

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

Dear Mr. Feldman:

We are a concerned tribe opposed to reducing the CRA (Community Reinvestment Act) requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. Your proposed changes will halt the progress that has been made.

I understand that banks with over.$250 million in assets must be tested on their nurnber of loans, investments, and services to low- and moderate-income communities. But your proposal would eliminate the investment and service requirements for all banks with under $1 billion in assets. This will result in significantly fewer loans and investments in affordable rental housing, health clinics, community centers, and economic development projects.

The proposed changes, which would make smaller banks less accountable for their community reinvestment activity, deeply concern us, as banks are finally acknowledging the investment opportunities in Indian country. Indian country has made strides with the help of banks in the mortgage arena—we saw conventional mortgage activity increase for Native Americans in 2003. We believe that the strength of the current law has been instrumental to this development.

The following data point up the severe continuing needs in our tribal area that require a strong CRA. According to our last survey, the rate of homeownership for Native Americans in our tribal area is just 33 percent, or half that of the general population and substantially lower than that of other minority groups. In addition, Native Americans are four times more likely than the average American family to live in substandard housing. (Fannie Mae date,. Testimony, Pattye Greene, May 3, 2004, House Financial Services Committee) Overcrowding has been documented in the NAIHC study "Too Few Rooms..." (2001) reporting as many as 25 or even 30 people living in deplorable conditions under one roof in a 2-or 3-bedroom house.

If the reduced requirements were approved, it would allow mid-sized banks to choose which community development activities they will undertake. Right now, these banks must make community development loans, investments, and services a priority. You proposed test allows banks to choose only one of the three activities. The result will be less community development activity. The recent strides in economic development in Indian country will be lost if banks aren't required to invest.

You also propose that community development activities in rural areas should benefit any group of individuals instead of only low-and moderate-income individuals. This will allow banks to chose and focus on affluent residents of rural areas rather than the lower income consumers CRA targets. Finally, you would also eliminate publicly available data on the small business lending of mid-sized banks. Without data, community groups and citizens cannot hold banks accountable for lending to small businesses in their communities.

Your proposed changes directly oppose CRA's mandate to require lenders to meet community needs. CRA is too important o be significantly weakened.

Please withdraw your proposal, as did two other federal agencies—the Office of Thrifts Supervision and the Office of the Comptroller of the Currency—that recognized the harm of similar changes to underserved communities.

Sincerely,

Archie Lynch, Tribal Administrator
Haliwa Saponi Indian Tribe