Federal Deposit
Insurance Corporation

I am writing on behalf of SJF Ventures to express our support for a strong Community Reinvestment Act ("CRA"). Specifically, we are writing to oppose the proposal to change the CRA definition of "small bank" to those with less than $1 billion in assets and to eliminate comprehensive CRA exams for 879 FDIC state-chartered banks. These changes, along with a community development criterion that allows banks a choice in their community-development activities (eg, loans, investments, OR services), would drastically limit the scope and scale of financial services available to many rural and low-income communities, creating a capital drought and stunting economic development efforts. These changes would also negatively impact our organization's ability to support small businesses in these areas.

SJF Ventures is a venture capital fund with a mission to serve low-wealth citizens and communities that has been certified as a Community Development Financial Institution (CDFI) by the U.S. Treasury Department. Our fund was capitalized with $17 million in investments, primarily from banks incentivized in part by CRA, such as Bank of America, Wachovia, Citibank, Deutsche Bank, and MBNA. We are in the process of raising a second fund of $50 million. A strong CRA is important to continuing to encourage financial institutions to invest in funds such as ours that prioritize creating employment and asset-building opportunities for low-income families.

SJF's portfolio companies have retained and created more than 1,600 jobs to date. Seven five percent of those positions have been filled by low-wealth employees. Nearly all of the portfolio companies provide employer-paid health insurance and many offer employee training programs; 401K plans and profit sharing or broad-based employee stock options., SJF portfolio companies have fostered community revitalization, with 77.% of portfolio company sites and 64% of employee residences in economically distressed urban or rural locations. SJF has led or co-led financing rounds in 13 of 18 portfolio companies, with SJF investing $10.2MM in rounds totaling $44MM. Most of these companies would not have received sufficient financing without SJF's leadership.

Investing with a CRA motivation is also good business for banks. Due to our diversified, expansion-stage investment strategy, we anticipate returning more capital to our bank investors than most conventional venture capital funds capitalized, as we were, in 1999.

Thank you for your attention to our feedback. To learn more about our fund, visit www.sjfund.com.
400 West Main Street, Suite 604, Durham, NC 27701 P 919.530.1177 F 919.530.1178