Federal Deposit
Insurance Corporation

Serena Rice
106 Sunset Rd.
Belle Mead, New Jersey 08502

October 4, 2004

Dear Federal Deposit Insurance Commission:

As a researcher and policy analyst who studies the need for low income housing on a daily basis I am appalled that the FDIC is considering steps that would, de facto, reduce the development of such housing. While many individuals and even institutions recognize the importance of community development, particularly development of affordable housing, banks and thrift institutions that provide the resources for investment in such projects also need incentives to continue investing in community resources. If the FDIC raises the comprehensive CRA exam threshold, 2,000 institutions will lose that icentive.

I agree with the National Congress for Community Economic Development that this proposed change would have a devastating effect on affordable housing and community development investment throughout the nation, particularly in rural areas.

The FDIC proposes that the community development loans and investments in rural areas can benefit any group of individuals, not just low- and moderate-income individuals. Currently, banks have to finance affordable housing and economic development projects that target low- and moderate-income borrowers and neighborhoods. Under the proposed changes, nothing in the CRA regulations would prevent banks from earning CRA points for financing developments with no community development benefit whatsoever. Moreover, the one part exams would cover 99 percent of all FDIC-supervised banks located in rural areas.

President Bush’s comments promoting an "Ownership Society" are truly disingenuous if the actions of officials he appointed are undermining proven laws that revitalize communities, increase minority homeownership, and increase small business ownership for women and minorities.

Please rescind your proposal.

Sincerely,
Serena Rice