Federal Deposit
Insurance Corporation

City of Lansing (MI)

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

Dear Mr. Feldman:

I am opposed to the watering down of CRA (Connnunity Reinvestment Act) requirements for mid-sized banks. CRA is vital for increasing home ownership in cities like Lansing, Michigan and for aiding economic development in lower-income neighborhoods. Your proposed changes will undermine continuing progress toward meeting those goals.

I understand that banks with over $250 million in assets must be tested on their commitment of loans, investments and services to low-and moderate-communities. But your proposal would eliminate the investments 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.

In the watered-down exam, you would allow mid-sized banks to choose which community development activities they will undertake. Right now, these banks must make investments in community development loans, investments and services. Your proposed test allows banks to choose only one of the three activities. The result will be less diverse community development activity and diminished impact in cities like Lansing where these options are most needed.

You 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.

Your changes directly oppose CRA's mandate to require lenders to meet community needs. CRA is too important to be gutted. Two other federal agencies have recognized the harm these changes will do to under served communities. Please drop your proposal as they have done.

Sincerely,

Tony Benavides
Mayor