Federal Deposit
Insurance Corporation

Enterprise Foundation

October 18, 2004

Mr. Donald E. Powell
Chairman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: RIN Number 3064-AC50

Dear Chairman Powell:

The Enterprise Foundation urges you to withdraw the Federal Deposit Insurance Corporation's proposed changes to the Community Reinvestment Act (CRA) regulations. We believe the proposal would undermine the intent of the CRA by decreasing the regulatory incentives for mid-sized banks to make investments in and provide services for underserved communities. The proposal would also mistakenly shift the focus of community development away from activities that benefit low- and moderate-income individuals to activities that benefit any individuals who reside in rural areas, regardless of their income.

Enterprise and its subsidiary organizations, primarily the Enterprise Social Investment Corporation, have invested more than $5 billion to support more than 160,000 affordable homes in low-income communities across the country. Many of our partners are depository institutions covered by the CRA. There is no federal policy more important to expanding housing and economic opportunity to low-income families and communities than the CRA.

The proposed revision would significantly increase the number of financial institutions subject to the small bank CRA examination. Because about 96 percent of FDIC-regulated banks have assets of less than $1 billion, only about 41 institutions – about 4 percent of FDIC-regulated banks – would be subject to comprehensive CRA exams under the new proposal. If the proposal is implemented, it is estimated that eight states – Alaska, Arizona, Idaho, Minnesota, Montana, New Mexico, West Virginia and Wyoming – would have no FDIC-supervised banks subject to a full CRA review and 36 states would have five or fewer such banks. Mid-sized banks no longer subject to the complete CRA examination would have much less incentive to provide investments and services that benefit low- and moderate-income individuals, such as banking accounts and remittances.

Sincerely
F. Barton Harvey III
Chairman of the Board
Chief Executive Officer