Federal Deposit
Insurance Corporation

From: Peter Amar [mailto:peteamar@foxfarmconsulting.com]
Sent: Wednesday, October 20, 2004 2:47 PM
To: Comments
Cc: Peter Amar
Subject: CommReinvestAct - RIN3064-AC50

Cheboygan County Human Services

Coordinating Body

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

RE: RIN 3064-AC50

Dear Mr. Feldman:

The Cheboygan County Human Services Coordinating Body’s (HSCB) mission is “to facilitate interagency cooperation, coordination and collaboration for the improvement of human services in Cheboygan County”. Our membership includes most of the private, non-profit and public health and human services agencies in the area. We wish to express our concerns regarding proposed changes to the CRA (Community Reinvestment Act) requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. However, the proposed changes will halt the progress that has been made.

It is our understanding 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 the 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.

The proposed exam 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. The proposed test allows banks to choose only one of the three activities. The result will be less community development activity.

The proposed rule would allow community development activities in rural areas to benefit any group of individuals instead of only low- and moderate-income individuals. This will allow banks to focus on affluent residents of rural areas rather than the lower income consumers CRA targets. Finally, the new rule 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.

These changes directly oppose CRA’s mandate to require lenders to meet community needs. CRA is too important to be changed in this fashion. Please drop your proposal like the two other federal agencies that recognized its harm to underserved communities. If you have questions about this letter, please contact Peter Amar, HSCB staff (peteamar@foxfarmconsulting.com; 989-731-5295).

Sincerely,
Julie Sproul, HSCB Chair