Federal Deposit
Insurance Corporation

Raphael Podolsky
80 Jefferson St.
Hartford, CT 06106

October 7, 2004

FDIC FDIC
Dear FDIC FDIC:

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429
RE: RIN 3064-AC50

Dear Mr. Feldman:

I am a consumer advocate who works on behalf of low-income consumers. I write to urge you to preserve the CRA (Community Reinvestment Act) requirements for mid-sized banks.

CRA is vital for increasing homeownership and economic development in lower-income communities. Since the passage of the CRA in 1977, great progress has been made in ending redlining and pushing banks to improve their lending performance in underserved communities. Banks have improved their outreach efforts, removed barriers in underwriting criteria that excluded credit-worthy low- and moderate-income applicants, and created loan counseling programs that assist first-time homebuyers. The CRA has played an important role in Connecticut, where it has helped make banks more responsive to low-income community needs.

There is still a long way to go, however, and the proposed changes to the CRA do not help us get there. At a time when stronger curbs against predatory lending and other unscrupulous practices are needed, this proposal weakens the already inadequate regulations of banks. In Connecticut, few banks reviewed under the state CRA receive anything more than a "satisfactory" rating, which is a minimally acceptable rating, not a high rating. Of 45 banks listed on the Connecticut Banking Commissioner's website, only 9 of them -- 20% -- had a rating of "outstanding." The remaining 80% all had lower ratings.

Monitoring under CRA is an important element to press banks to work toward an "outstanding" rating. The need for such movement is every bit as important for mid-size banks as for large ones. Community revitalization and wealth-building in low-income communities -- and especially an increase in homeownership -- will not happen without the active application of the CRA. It is an incentive which produces results.

I understand that banks with over $250 million in assets must be tested on their number 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.

I urge you to preserve full CRA coverage for mid-sized banks.

Sincerely,
Raphael L. Podolsky
Legal Assistance Resource Center of Connecticut
80 Jefferson St.
Hartford, CT 06106