From: Southern Mutual Financial Services
[mailto:smfs@southernmutualhelp.org]
Sent: Monday, October 04, 2004 12:40 PM
To: Comments
Subject: Comments on CRA
September 28th, 2004
Dear FDIC Commissioners,
We are writing against the proposed changes to rules governing
the Community Reinvestment Act (CRA). In particular, we are opposed
to changing the definition of a "small bank" from a bank
with assets of 250 million dollars to a bank having assets of one
billion dollars. The proposed changes would adversely impact our
work with poor families in rural areas by removing incentives for
local, community banks to invest in the future prosperity and health
of the communities that they serve. Under the proposed change,
there will be only four banks in Louisiana with more than one billion
dollars in assets.
Our bank partners have told us that without CRA, they would not
have invested in our work, our families, or our rural communities.
Under the proposed changes, only one bank partner will receive
the full CRA exam; only one bank will have incentives to invest
in our work in poor rural communities. CRA regulations are not
only better for communities, but better for banks–providing
banks with the flexibility and incentive to develop new markets
over the long term.
Without the current CRA regulations, the responsibility for community
investment will be transferred to already overburdened local and
state governments, who may be unable to meet the needs of so many
under served families and communities. We urge you to maintain
the current "small bank" definition so that local, smaller
banks are provided with continued incentive to invest in their
communities.
