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October 31, 2003 NEIGHBORHOOD
LENDING PARTNERS, INC.
Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Attention Comments
Dear Mr. Feldman::
Neighborhood Lending Partners, Inc. (NLP) is a partnership between
banks, thrifts, local governments, and the affordable housing community.
Our members are banks, and thrift institutions throughout Florida.
Membership in NLP gives these institutions a way to support affordable
housing while sharing the costs and risks. It also enhances their
ability to meet community credit needs, in accordance with the Community
Reinvestment Act. We appreciate the opportunity to comment on the
proposed Risk-Based Capital Rules.
NLP strongly supports the provision of the proposed special rule for
"Legislated Program Equity Exposures". This special rule preserves the
current capital charge on most equity investments made under legislated
programs that involve government oversight, including public welfare
investments made by banks in compliance with Community Reinvestment Act
(CRA) regulations. These programs provide a vital source of private
sector financing for affordable housing and community development for
low- and moderate-income communities, particularly in our area of the
country.
However, we are troubled by another proposed rule change. The
proposed "materiality" test would affect banks that have, on average,
more than 10% of (Tier 1 plus Tier 2) capital in ALL equity
investments. Our concern is that the proposed rule change could
unintentionally discourage banks with substantial CRA investments from
maintaining the same level of CRA investments, so as not to trigger
higher capital charges on non-CRA investments. Please consider excluding
CRA-related investments from the materiality test calculation. This will
help ensure the continued availability of private equity capital for
meeting the affordable housing needs of our nation's poorest families
and for building sustainable communities.
Debra S. Reyes
President
Neighborhood Lending Partners, Inc.
2002 North Lois Avenue, Suite 150
Tampa, FL 33607
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