Federal Deposit
Insurance Corporation

October 19, 2004

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

RIN number 3064-AC50

To Whom It May Concern:

We, the undersigned organizations, represent a broad and diverse coalition of organizations committed to increasing the flow of private capital to our nation’s low- and moderate-income (LMI) communities.

We are very concerned that the proposed rule changes by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) to offer “streamlined” testing under the Community Reinvestment Act (CRA), to institutions up to $1 billion in assets, will harm affordable housing and community and economic development in LMI communities, particularly in rural areas.

CRA was enacted to encourage federally insured financial institutions to meet the credit needs of their communities, including LMI persons. Communities and nonprofit corporations partner with banks to leverage limited federal subsidies with private capital for meeting communities’ needs.

The great, but little known, story of CRA is of all the partnerships between banks and nonprofit providers to meet communities’ credit needs throughout America. The proposal to increase the threshold for “streamlined” testing under CRA to institutions up to $1 billion in assets will pull the rug out from many of these partnerships.

From the FDIC’s own data, the proposed rule change by 2 of the 4 bank regulatory agencies would eliminate any regulatory incentive for at least 1300 banks to include LMI persons in their community services and investments. It appears that some states – Wyoming and Idaho -- would have no bank charters with a CRA impetus both to invest in, and provide services to, their communities, while others – Vermont, Alaska, and Montana – would only have one.

Because institutions with assets of $250 million to $1 billion comprise substantial market share in rural areas, this change means that many rural communities and states will not have any institutions required to offer services and investments that benefit low- and moderate-income communities.

We agree with the description of the proposal by Senator Paul Sarbanes, ranking member of the Senate Banking Committee, as an “extreme action” and “bad policy”, and urge you not to adopt it. Now is not the time to reduce the private capital available to leverage dwindling Federal resources. All communities deserve evidence that financial institutions enjoying the benefits of Federal deposit insurance are documenting how they are helping to meet the credit needs of their communities.

Sincerely,

National Association of Affordable Housing Lenders
National Affordable Housing Management Association
National Low Income Housing Coalition
Homestead Affordable Housing, Inc., Nortonville, KS
National Housing Conference
Mt. Calvary Baptist Church, Prichard, AL
National Housing Trust
National Leased Housing Association
Enterprise Foundation
California Community Reinvestment Corporation
American Association of Homes and Services for the Aging
Rural Opportunities, Inc.
Neighborhood Development Services, Ravenna, OH
Housing Assistance Council
HSBC Bank USA, N.A.
Local Initiatives Support Corporation
Kate Adams, Rochester, NY
Christian Concern Management & Development Corp., Collegeville, PA
Southern California Association of Non-Profit Housing
Recapitalization Advisors, Inc.
South Central Citizens Coalition, Harvey, ND
Reliance Housing Foundation, Inc., Ft. Lauderdale, FL
Alabama Multifamily Loan Consortium
Charles Hill & Associates, Inc.
Residential Capital Corp., Columbus, OH
Community Housing, Inc., Winchester, KY
Community Housing Works, San Diego
Volunteers of America
Century Housing
Neighborhood Housing Services of New York City
Cooperative Services, Inc. Oak Park, MI
Umpqua Community Development Corp., Roseburg, OR
Community Housing Works, Excondido, CA
National Affordable Housing Preservation Associates
National Association of Housing and Redevelopment Officials
Portland Development Commission, Portland, Oregon
Central New York Citizens in Action, Utica, NY
Progressive Redevelopment Inc., Decatur, GA
Related Capital Co.
Low Income Investment Fund
Community Investment Corporation
Community Reinvestment Fund
The John Stewart Company, San Francisco
Venice (CA) Community Housing Corporation
Brattleboro (VT) Area Community Land Trust
The Housing Authority of the City of Atlanta, Georgia
Vermont Affordable Housing Coalition
Community Development Ventures Incorporated
Green Mountain (VT) Habitat for Humanity
Ohio Capital Corporation for Housing
Washington County (VT) Mental Health Services, Inc.
Peoples’ Self-Help Housing Corporation, San Luis Obispo, CA
Los Angeles Business Council
South County Housing, Gilroy, CA
National Council of State Housing Agencies
Livable Places, Los Angeles, CA
Council of Large Public Housing Authorities
Access Capital Strategies LLC, Cambridge, MA
Council for Affordable And Rural Housing
Calvert Social Investment Foundation