Federal Deposit
Insurance Corporation

From: David Paccone [mailto:dpaccone@syrhousing.org]
Sent: Thursday, October 21, 2004 3:03 PM
To: Comments
Subject: RIN 3064-AC40

October 20, 2004

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

RE: RIN 3064-AC50: Notice of Proposed Rulemaking to 12 CFR Part 345

Dear Mr. Feldman:

The Syracuse Housing Authority would like to take this opportunity to comment on the FDIC’s proposed changes to Community Reinvestment Act (CRA) requirements.

We oppose the changes to the definition of “small bank”. By increasing the asset

threshold to $1 billion, this change allows banks now classified as “large banks” to fall under the small bank definition.

For many banks in Syracuse, NY, as well as across the nation this will be a fundamental change in status. Large banks must undergo a full CRA examination; small banks are not subject to the investment and service tests of the CRA. There is no question that this will result in less investment in low and moderate income communities.

Current regulation requires mid-sized banks to engage in three types of activities; community development lending, investment and services. The new regulations provide for a bank to choose which community development activity they will do This will result in a reduction of activities in low and moderate income communities and place these areas at a severe disadvantage compared to more affluent areas.

These changes go against the original intent and spirit of CRA.

In their totality, these proposed regulations will hurt the very communities CRA was enacted to protect. The argument that the CRA has become irrelevant because small banks have recognize community development is critical for their survival does not accept the reality that the small bank network in the United States is diminishing due to consolidation and large-bank acquisition.

Overall, the Syracuse Housing Authority sees that any change in the CRA at this time will have a negative impact on the community it serves, and on the future of the urban residential communities it is working to reestablish and reinvigorate. More specifically, it makes the homeownership program that the Syracuse Housing Authority has established in these communities lost a vital resources, and makes the mortgage hunting more onerous for those prospective low-income working families the program serves.

Thank you for providing the opportunity to comment on this proposed rule.

Sincerely,
Frederick R. Murphy
Executive Director