Federal Deposit
Insurance Corporation

September 19, 2004

Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429

Re: RIN 3064-AC50

Dear Mr. Feldman:

On behalf of the Delaware Community Reinvestment Action Council, Inc., (DCRAC), a fair lending advocacy group in Delaware, I am writing in opposition of the proposal to redefine small banks as banks with assets under one billion dollars.

We also oppose the streamlined evaluation process which looks to employ a seriously deficient community development criterion. Currently, a mid-sized bank must engage in all three activities: lending, investments, and service. Under the proposal a mid-sized bank may choose the easiest of a community development activity.

The Community Reinvestment Act (CRA) has been instrumental in increasing access to homeownership, boosting economic development, and expanding small businesses in Delaware's minority, immigrant, and low- and moderate-income communities. With each attempt to weaken CRA, Delaware has seen a rise in predatory lending practices. Given this backdrop, any further tinkering with the CRA is outweighed by the harm to the community.

Yet another rationale for not implementing the proposal is that it hampers the Administration's goals of improving the economic status of immigrants and creating 5.5 miliion new minority homeowners by the end of the decade. For example, in Delaware the current small banks and the proposed additional small banks are predominantly in our rural communities. Rural Delaware is already handicapped in serving the lending, investment, and credit service needs of a growing lower income community. The government is already chiseling away at programs that address the current housing crisis in Delaware. The burden has fallen on non-profits and their for-profit counterparts. It is CRA that enables our communities to continue to be served to some extent. The proposal to expand the small bank definition and evaluate bank performance under an amorphous community development criterion will likely have a drastic adverse impact on homeownership prospects as well as efforts at developing affordable housing, particularly in rural Delaware—home to two of Delaware's three Counties.

In addition, already predatory lending and rising consumer debt are threatening to demoralize our communities. CRA is an important mechanism by which community confidence is regenerated. We simply cannot afford to lose any CRA credit, investments, and services in our community. Not only all resources currently available -to meet the credit needs of the community are needed, they are simply not enough! This proposal limits the currently available resources immensely.

Lastly, Delaware boasts a CRA environment where financial education, homeownership counseling, small business counseling and CDFIs, Low Income Housing Tax Credits, IDA programs, and numerous innovative means are employed to serve the credit needs of the entire Delaware Community. Already we maintain that this is not enough.

Corporate goodwill is not enough to encourage community reinvestment. Strong CRA is needed to ensure that the credit needs of all communities are met. The proposal would further limit opportunities.

We strenuously oppose the expansion of small bank definition. We are equally opposed to the ill-conceived notion of a community development criterion. As mentioned earlier, community development investments are crucial to meeting the housing and business needs of our community. Community development services build consumers of financial services. CRA is the research (identify investment opportunities) and development (investment in people who become bankable) arm of the business recognized as banking. This proposal limits R&D by our financial institutions in our communities.

Thank you for the opportunity to comment on this proposal.

Sincerely,

Rashmi Rang
Delaware Community Reinvestment Action Council Inc.
Wilmington, DE