Federal Deposit
Insurance Corporation

From: Kathy Fisher [mailto:kathyfisher@pccy.org]
Sent: Wednesday, October 20, 2004 4:47 PM
To: Comments
Subject: Community Reinvestment Act 12 CFR Part 345

October 20, 2004

Mr. Robert E. Feldman
Federal Deposit Insurance Corporation
Attention: Comments/Legal ESS
550 17th St. NW
Washington, DC 20429-9990

RE: RIN 3064-AC50

Dear Mr. Feldman:

On behalf of Philadelphia Citizens for Children and Youth (PCCY), I oppose the FDIC's proposal to allow banks with assets above $250 million to be examined as small banks under the Community Reinvestment Act (CRA). This policy would reduce lending, investments and services in low-income communities and dramatically diminish banks’ obligation to reinvest in their communities. In Pennsylvania alone, 43 banks would be exempted from CRA if the new regulations are enacted.

The FDIC’s plan to add a weak and trivial community development criterion in lieu of the investment and service tests applicable today is a wholly inadequate substitute for the present standards. The new approach would permit banks to satisfy the community development criterion by choosing whether to provide community development loans, investments or services instead of assessing their performances for all three categories. This change is likely to result in a significant drop-off of lending, investments and services for affordable housing development, low-income housing tax credits, community service facilities, and economic development.

I also fear the proposed changes will have harmful consequences for low- and moderate-income consumers. They are likely to undercut the extent to which these banks provide checking and savings accounts for these individuals, affordable banking services necessary to bring unbanked households into the financial mainstream, and money transfer and remittance services, which are particularly important to new immigrants and ethnically diverse communities.

I urge you to withdraw the proposal of the Federal Deposit Insurance Corporation to quadruple (to $1 billion) the minimum asset size for applying the full Community CRA exam to state chartered non-member banks. This proposed change would have a devastating impact on lending, housing, and access to financial services both urban and rural communities across Pennsylvania and throughout the nation.

Sincerely,
Kathleen Fisher
Welfare and Public Benefits Coordinator
Philadelphia Citizens for Children and Youth
Seven Benjamin Franklin Parkway, 6th Floor
Philadelphia, PA 19103
215-563-5848 x 27 / 215-563-9442