Federal Deposit
Insurance Corporation

Lorain County Reinvestment Coalition

From: Paul Bellamy [mailto:lcrc@bright.net]
Sent: Wednesday, October 20, 2004 4:55 PM
To: Comments
Subject: RIN 3064-AC50

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

RE: RIN 3064-AC50

Dear Mr. Feldman:

I am the executive director of the Lorain County Reinvestment Coalition a
nonprofit CRA and fair housing advocacy group. I am also a concerned
citizen opposed to watering down CRA (Community Reinvestment
Act) requirements for mid-sized banks. CRA is vital for increasing
homeownership and economic development in lower-income
communities. However, your proposed changes will 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-income 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. History makes it clear
depostories will only do these deals when they have to. That is what CRA
is for---the "market" wasn't serving low and moderate income people. Nothing
has changed since CRA and HMDA was passed, banks must be forced to
do the right thing.

In this 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! But this will allow banks to
cherry-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.

The FDIC---of all the federal regulators--ought to remember that banks are
working with our money, not their money. Why should the CRA, which
has only had nominal support from regulators in the last ten years anyway,
be declawed even further? It's the wrong thing to do, plain and simple.

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

Sincerely,

Paul Bellamy
Executive Director