Federal Deposit
Insurance Corporation

October 18, 2004

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

To Whom It May Concern:

On behalf of the National Leased Housing Association (NLHA), I am requesting the FDIC to withdraw its August 20th proposal to raise the asset threshold under which banks are defined as small for purposes of CRA compliance. The FDIC proposal to raise the "small" bank threshold from $250 million to $1 billion would eliminate nearly 96 percent of the FDIC-regulated banks' participation in three areas of the CRA exam: 1) lending; 2) investing; and 3) services to low and moderate income communities.

With a shrinking supply of affordable housing, it is imperative that lenders continue to provide the private capital that is necessary for the successful development and recapitalization of low and moderate income rental housing. Our members are active owners and developers of such housing and have relied on CRA to drive the participation of local lenders to leverage scarce subsidy dollars.

Successful programs like the Low-Income Housing Tax Credit enjoy bi-partisan support and have been responsible for the development of over 1 million units of affordable housing for working families. However, the program often requires multiple layers of funding sources to complete the construction or rehabilitation of such housing. Without the participation of local lenders incentivized by CRA, sufficient private capital may not be available.

Further, a number of our member organizations own properties that are 25 to 40 years old and seek to refinance their mortgages under the current low interest rate environment to replace aging heating systems, install new roofs and otherwise upgrade the buildings to extend the property's remaining useful life. Properties with less than 60 units are not generally appealing to the large national lending companies that specialize in such refinancings unless they charge 5 or more points to the borrower. CRA has encouraged local lenders to provide the necessary refinancing without the exorbitant processing costs with the added benefit of the formation of community partnerships that have resulted in not only building renovation but community revitalization.

The bottom line is that the Community Reinvestment Act has been good for affordable housing and community development. We urge the FDIC to reconsider its proposal to remove the regulatory incentive for over 1300 banks to meet the credit needs of their communities.