Federal Deposit
Insurance Corporation

From: janneybc@aol.com [mailto:janneybc@aol.com]
Sent: Monday, October 18, 2004 2:43 PM
To: Comments
Subject: Save the Community Reinvestment Act

Dear FDIC,

Mr. Feldman:

After 6 years in corporate finance at JP Morgan and 12 years with Shorebank Corporation in Chicago, I am very concerned about the proposal to ease Community Reinvestment Act (CRA) requirements for smaller banks. CRA does provide an important counter to the purely market force of profit maximization, and the rate of decline in many LMI communities will accelerate if most banks do not have a CRA motive to at least look for lending opportunities in those communities. The rate of capital outflows will accelerate as banks logically invest in more profitable communities, and the rate of positive change will slow dramatically as less new capital investment goes into these LMI areas. In a state like COlorado, the impact of this change will be huge - from over 300 banks to 3, with a huge drop in the capital available for rural communities (which is everything outside of the Front Range), affecting homeownership, jobs, and business growth.

While I understand that smaller banks should have lower CRA requirements than the big guys, this change is not the right solution. I have worked with banks from Citibank to ShoreBank Pacific, and I have at least some understanding that the "large bank" CRA rules don't work for the smaller ones, but this change is too big and will affect the economies in many smaller and rural communities. Right now, these banks must make community development loans, investments, and services. Your proposed test allows banks to choose only one of the three activities. The result will be less community development activity were I live. That will mean fewer jobs, fewer homes and fewer community services.

Yes, the market has changed since CRA's inception, but the law is still needed to build and improve LMI communities and try to reduce the higher economic costs we will ALL face if those communities and families sink further into poverty and are isolated even further from the mainstream economy. These are goo d investments for the future, and this is an appropriate role for government regulation. Lets not leave states with large rural areas and smaller banks out to dry with this proposed change.

Thanks for listening.

Anne Carpenter
Janney Carpenter
Englewood, CO