Federal Deposit
Insurance Corporation

Maryland Department of Housing and Community Development

From: Greiner, John [mailto:Greiner@dhcd.state.md.us]
Sent: Wednesday, October 20, 2004 3:09 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

Dear Sir/Madam

On behalf of the Maryland Department of Housing and Community Development, we would like to register our opposition to changing the definition of small banks from those with assets of less than $250 million to $1 billion, and more importantly, from reducing the scope of activities they must undertake to meet Community Reinvestment Act (CRA) requirements. We would also like to express our opposition to changing the requirements on rural banks that would allow that to count all lending in rural areas as meeting CRA requirements.

The Maryland Department of Housing and Community Development (DHCD) serves as the State of Maryland's Housing Finance Agency and is responsible for providing both homeownership and rental housing for Maryland's low- and moderate-income citizens. As part of this effort, DHCD manages the State's Mortgage Revenue Bond (MRB) program, which primarily supports homeownership efforts, and the Federal Low-Income Housing Tax Credit program, which helps finance affordable rental housing. We believe that changing the definitions of what constitutes a small bank and lessening the CRA requirements on those organizations will adversely impact our ability to sell and market the low-income housing tax credit, making it harder to develop low-income rental housing. In addition, in many of our rural areas, we already face a shortage of banks who participate in our homeownership programs. Allowing banks to count all lending in rural areas as CRA activity will reduce their incentive to participate in our homeownership programs financed through MRBs. Given the shortage of affordable rental housing that already exists, and the Bush administration's emphasis on homeownership, we believe that any actions that adversely impact the provision of affordable housing of either type should not be enacted. Therefore, we urge you to reject the proposal that would change the definition of what constitutes a small versus a large bank, and the proposal that would allow banks in rural areas to abandon programs that provide homeownership and rental housing opportunities for low- and moderate-income families.

Sincerely,

John M. Greiner
Housing Policy Officer
Maryland Department of Housing and Community Development