Federal Deposit
Insurance Corporation

October 15. 2004

RE: RIN 3064-AC50

Dear Mr. Feldman:

The City of Harrisburg is opposed to the watering down of CRA (Community Reinvestment Act) requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. The proposed changes will halt the progress that has been made.

We understand that banks with over $250 million in assets must be tested on their number of loans, investments and services to low-and-moderate-communities. The now pending proposal would eliminate the investment 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, the proposed changes would allow mid-sized banks to choose which community development activities they will undertake. Right now, these banks must make community development loans, investments and services. The proposed test allows banks to choose only one of three activities. The result will be less community development activity.

It is also now proposed that community development activities in rural areas should benefit any group of individuals instead of only low-and-moderate-income individuals. This will allow banks to cherry-pick and focus on affluent residents of rural areas rather than the lower income consumers the CRA targets. Finally, the proposed changes 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.

The changes now offered directly oppose CRA's mandate to requirg lenders to meet community needs. CRA is too important to be gutted. We strongly recommend that the FDIC drop this proposal, just as the two other federal agencies did when they recognized the harm to underserved communities.

Sincerely,
Stephen R. Reed
Mayor

cc: The U.S. Conference of Mayors