Federal Deposit
Insurance Corporation

City of Tulsa

October 20, 2004

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

RE: RIN 3064-AC50: Notice of Proposed Rulemaking to 12 CFR Part 345

Dear Mr. Feldman:

The City of Tulsa, Oklahoma would like to take this opportunity to comment on the FDIC's proposed changes to the Community Reinvestment Act (CRA) requirements. Specifically, we oppose the change to the definition of "small bank." The current definition of such a bank is defined as one whose assets do not exceed $250 million. The proposed rule would increase the asset threshold to $1 billion, thereby allowing banks now defined as "large banks" to fall under the small bank category. Large banks must undergo a full CRA examination while small banks are not subject to. the investment and service tests of the CRA. We believe that this change in definition will result in fewer investments in low and moderate-income communities.

As you may know, Tulsa has experienced significant job losses over the past two years, with most estimates ranging around 26,000 jobs. Although the City and surrounding suburbs recently approved a Vision 2025 bond package to revitalize our community, it will be seven to eight years before taxpayers see a return on their investment. The proposed rule changes concern us because of the potential impact they could have on our local efforts to retain jobs and people. With government funding shrinking, eliminating regulatory incentives for private capital to leverage public dollars is irresponsible and counter-productive to local efforts.

The proposed regulatory changes would allow mid-sized banks to choose specific community development activities. Current regulation requires these banks to engage in three types of activities: community development lending, investment and services. Reducing the number of activities in low and moderate-income communities will result in less community development activity and place these areas at a distinct disadvantage compared to more affluent areas. This goes against the original intent and spirit of the CRA.

The regulations also eliminate publicly available data on small business lending by mid-sized banks. Oklahoma is a state made up primarily of small businesses as we are largely a rural state. Without data, community groups and citizens cannot hold banks responsible for lending to small businesses in their neighborhoods. Furthermore, the State has recently begun a comprehensive dialogue with housing providers, lenders, developers and community leaders to create a state-wide affordable housing policy and implementation plan. These rule changes pose a real and dangerous threat to the progress we've made toward creating a unified approach to solving a long-standing problem. Without affordable housing, expanding or creating new businesses in our communities is made that much more difficult.

On the face of it, these proposed regulations will compromise the very communities CRA was enacted to protect. CRA has been a key component to increased lending, investment and banking services in what had previously been underserved communities. Efforts to undermine these protections will reverse the positive trend we've witnessed here in Tulsa. For these reasons, Tulsa is opposed to the proposed rulemaking and respectfully requests the FDIC to withdraw them immediately.

Thank you for providing the opportunity for the City of Tulsa to comment on this proposed rule.

Sincerely,
Donna Harvey
Housing Planner