Federal Deposit
Insurance Corporation

October 15, 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:

The Evangelical Lutheran Church in America, a church with approximately 5 million members, urges you to withdraw the proposal of the Federal Deposit Insurance Corporation to quadruple (to $1 billion) the minimum asset size for applying the full Community Reinvestment Act (CRA) exam to state chartered non-member banks. The proposed regulatory changes to the CRA would create harsh disadvantages for poor and middle income families. These changes would have a devastating impact on lending, housing, and access to financial serves in urban and rural communities across the United States. We call for fairness in lending and accessible economic solutions to be available to all, but especially to those who. are already financially over-burdened.

The CRA has been effective in increasing homeownership as well as expanding economic development and small businesses particularly in our nation's minority, immigrant, and low- and moderate-income communities. The FDIC proposal would significantly diminish banks' obligation to reinvest in their communities. The less rigorous CRA exam would apply to an additional 900 banks with assets totaling $401 billion, excluding them from the existing investment requirements. The revision would likely mean the loss of hundreds of millions of dollars in loans, investments, and services for local communities, and would disproportionately impact small cities and rural communities where the mid-sized banks are most often located.

We expect the new community development criterion to result in a significant reduction of lending, investments, and services for affordable housing development, Low Income Housing Tax Credits, community service facilities such as clinics, and economic development projects. We also believe that: 1) the dramatic weakening of the lending test for midsize banks will decrease access to credit for many individuals including farmers and small business' owners, 2) the elimination of the service test will negatively affect low-and moderate-income consumers, and 3) the broadening of the definition of community development in rural areas will result in providing CRA "credit" even though their lending activities did not serve low-and moderate-income households as is currently required.

According to FDIC's own data, the rule change would result in only 223 of the 5,291 FDIC-supervised banks continuing to receive the full CRA exam. We urge you to withdraw the proposal.

Sincerely,

Kay A. Bengston
Director for Domestic Public Policy
Evangelical Lutheran Church in America
Washington, DC