Federal Deposit
Insurance Corporation

City of Napa Housing Authority

October 20, 2004

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

Subject: Rin 3064-AC50: Notice of Proposed Rulemaking to 12 CFR Part 345

Dear Mr. Feldman:

The Housing Authority of the City of Napa and the Napa Valley Housing Authority would like to go on record in opposition to the FDIC’s proposed changes to the Community Reinvestment Act (CRA) requirements. We strongly oppose the change to the definition of a “small bank”. Currently a small bank is defined as a bank with assets of $250 million or less. The proposed rule would increase the asset threshold to $1 billion, thereby allowing banks now classified as “large banks” to be defined as a small bank exempt from meeting critical standards of community performance in community development lending, investment and services for low and moderate income households and communities throughout America.

It is important to note that the original CRA legislation was enacted in response to an identified problem that a large number of banks were not on their own volition providing adequate community development lending, investments and services for low and moderate income households and businesses throughout the country. The current CRA standards have significantly reduced that problem and increased the level of funding commitment to assist low and moderate income households and business throughout the country. Why would the FDIC want to relax regulations that are in fact working to achieve the goals contained in the original CRA legislation?

The proposed FDIC rule change would greatly weaken or eliminate extremely important standards to ensure that the CRA remains effective, including the lending test and the investment and service parts of the CRA exam for FDIC supervised banks with assets between $250 million and $1 billion. Without a doubt the result of this rule change would mean less access to the necessary capital to address the ongoing community development needs of low and moderate income households and businesses throughout America.

Implementation of these proposed regulations are not consistent with the CRA statutory mandate that banks, regardless of their asset size, have a continuing and affirmative obligation to serve the credit and deposit service needs of their local communities, including low and moderate income households, business and communities. Therefore, the Napa Housing Authority and the Napa Valley Housing Authority are opposed to implementing this proposed rule and strongly urge the FDIC to withdraw this proposed regulation.

Thank you for consideration of our comments on this important issue for low and moderate-income households and business throughout America.

Sincerely,

Peter Dreier
Housing Director