Federal Deposit
Insurance Corporation

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

RE: RIN 3064-AC50

Dear Mr. Feldman:

The City of Denton would like to comment about the Federal Deposit Insurance Corporation's (FDIC) proposal to ease Community Reinvestment Act (CRA) examinations for banks between $250 million and $1 billion in assets. CRA plays a vital role in increasing homeownership and economic development in low- and moderate-income neighborhoods and has significantly complemented the City's community development and economic development efforts. It has also benefited the banking industry, making them aware of, new investment and business opportunities that they previously overlooked. The City Of Denton therefore urges you to follow the lead of the Federal Reserve Board (FRB) and the Office of the Comptroller of the Currency (OCC) and reconsider this or any other effort to weaken CRA.

As the City understands the proposed rule, banks between $250 million and $1 billion in assets would be allowed to choose which community development activities to undertake. Currently, they must demonstrate that they make community development loans, investments and services. Under the proposed rule, they would be examined under only one of those three criteria. Since the rule would affect over 5,000 banks nationwide with a total of more than $750 billion in assets, the impact on our community and economic development efforts and on those of cities nationwide would be substantial. The City also fears that the proposed rule would decrease the availability of banking services for low- and moderate-income households:

The City of Denton is especially concerned that under the proposed rule, large bank holding companies would be able to reform their holdings into series of small "community banks" so that they could then avoid more stringent CRA exams. The City urges FDIC to address this issue before making any regulatory changes. The City is also concerned that the FDIC is proceeding with this rule when the FRB and OCC have firmly decided against pursuing a similar weakening of CRA for the institutions that they govern. Not only would FDIC action create a confusing and uneven playing field, the City is concerned that it would allow financial institutions to "charter shop" for the most lenient CRA regulator.

While the City is not in a position to gauge how bank asset sizes have changed since the inception of CRA, $1 billion seems like a large threshold in light of the number of banks (over 5,000) that it would exempt from tougher CRA examinations. Though the City of Denton would prefer no changes in existing CRA regulations, if FDIC insists on moving forward with these proposed changes, we urge you to lower the threshold to ensure that most banks continue to be covered by the more stringent examination. Note that we use the term "more stringent" hesitantly: we do not find that the current examination process particularly stringent.

In sum, the City of Denton believes that CRA is working as Congress intended and is not in need of change. It has played an important role in increasing investment, economic development and financial services in low- and moderate-income neighborhoods. It has also greatly complemented community development efforts in Denton and cities throughout the nation.

Sincerely,

Euline Brock
Mayor