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October 31, 2003
ILLINOIS EQUITY FUND
Ms. Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
Twentieth Street and Constitution Avenue, NW
Washington, DC 20551
Attention: Docket No. R-1154
Office of the Comptroller of the Currency
250 E Street, SW
Public Information Room
Mail Stop 1-5
Washington D.C. 20219
Attention: Docket No. 03-14
Regulations Comments
Chief Counsel's Office
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
Attention: No. 2003-27
Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Attention: Comments
Dear Sirs:
The Illinois Equity Fund Is a syndication firm. We appreciate the
opportunity to comment on the proposed Risk-Based Capital Rules.
Illinois Equity Fund very much favors the provision of the proposed
special rule for "Legislated Program Equity Exposures" that 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 -- a critical source of private
capital financing for affordable housing needs.
However, the proposed "materiality" test for banks that have on
average, more than 10% of (Tier I plus Tier 2) capital in ALL
equity investments could have an unintended consequence. The proposed
rule change could discourage banks with substantial CRA investments from
maintaining the same level of CRA investments, to avoid incurring higher
capital charges on non-CRA investments. We urge you to exclude CRA-related
investments from the materiality test calculation. In order to maintain
the vital flow of equity capital for communities' affordable housing
needs.
Sincerely,
William W. Higginson
President & CEO
Illinois Equity Fund
One East Superior Street
Chicago, IL 60611
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