Federal Deposit
Insurance Corporation

City of Beaumont, TX

October 20, 2004

Robert Feldman
Executive Secretary
Attention: Comments/Legal ISS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429-9990

RE: RIN 3604-AC50

Dear Mr. Feldman:

Although much of the below is taken from a recommended format, I do want you to know that I speak sincerely and as a former member of Texas Commerce Bank's CRA committee.

I am opposed to the watering down of CRA (Community Reinvestment Act) requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. Your proposed changes, however, could halt the progress that has been made.

I understand that banks with over $250 million in assets must be tested on their number of loans, investments and services to low and moderate communities. But your proposal would eliminate the investment and service requirements for all banks with under $1 billion in assets. This will result in significantly fewer loans and investments in affordable rental housing, health clinics, community centers and economic development projects.

In the watered-down exam, you would allow mid-sized banks to choose which community development activities they will undertake. 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.

You also propose that community development activities in rural areas should benefit any group of individuals instead of only low-and moderate-income individuals. This will allow banks to pick and focus on affluent residents of rural areas rather than the lower income consumers CRA targets. Finally, you would also eliminate publicly available data on the small business lending of mid-sized banks. Without data, community groups and citizens cannot hold banks accountable for lending to small businesses in their neighborhoods.

Your changes directly oppose CRA's mandate to require lenders to meet community needs. CRA is too important to be gutted. Please drop your proposal like the two other federal agencies that recognized its harm to underserved communities

Sincerely
Evelyn M. Lord
Mayor