Federal Deposit
Insurance Corporation

Salt Lake City

October 19, 2004

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

RE: RIN 3o64-AC50

Dear Mr. Feldman:

I am opposed to the changes being proposed to quadruple to $1 billion the minimum asset size for applying the full Community Reinvestment Act (CRA) test to state chartered non-member banks. This proposed change to the CRA regulations would have a, devastating impact on lending and investment in affordable rental housing, health clinics, community centers and economic development projects. In Utah alone, it would mean that of 16 banks will no longer be obligated to reinvest. in their communities, a net loss of 61% of the CRA investment currently occurring.

The FDIC rule, as proposed, adds a weak and trivial community development criterion in lieu of the investment and service test applicable today as part of the present exam. It allows banks to satisfy the community development, criterion by choosing whether to provide community development loans, investments or services instead of assessing their performance for all three categories. This change will most likely result in a significant decrease in the funding of community development activities.

Another harmful element in the proposal weakens the lending test for mid-sized banks that could decrease access to credit for many low to moderate income individuals. These banks will no longer be subject to a rigorous examination of their mortgage, small business, small farm, and consumer lending. The banks will no longer be required to collect and report essential lending information and, without this data, it will be impossible for community groups and citizens to hold banks accountable for lending to small businesses and low to moderate income individuals in their neighborhoods.

I urge you to withdraw your proposal, as it works at cross purposes with the statutory mandate of CRA to meet community needs. As you know, this mandate requires that banks, regardless of their asset size, have a continuing and affirmative obligation to serve the credit and deposit needs of their local communities, including low and moderate income areas.

Sincerely,
Sam Guevara
Chief of Staff