FDIC Federal Register Citations

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:

I urge you to withdraw your proposed changes to the Community
Reinvestment Act (CRA) regulations.

As many others have stated this change will significantly reduce the
pressure on banks in many rural communities to engage in CRA-related
activities, and will leave some states with few banks or no banks that
are held to meaningful levels of compliance with the Act. Because your
proposal eliminates small business lending data reporting for mid-size
banks the public cannot hold mid-size banks accountable for responding
to the credit needs of small businesses.

I believe that the community development criterion is seriously
deficient as a replacement for the investment and service tests. Under
the proposed rule, mid-size banks with assets between $250 million and
$1 billion would only have to engage in one of three activities:
community development lending, investing or services. Currently they
must engage in all three activities. Under your proposal, a mid-size
bank can now choose a community development activity that is easiest for
the bank instead of providing an array of comprehensive community
development activities needed by low- and moderate-income communities.

In addition, a blanket allowance for activities in rural communities to
count towards CRA compliance, regardless of which group of individuals
they benefit instead of targeting them to only low- and moderate-income
individuals is irresponsible. Since banks will be able to focus on
affluent residents of rural areas, your proposal threatens to divert
community development activities away from the low- and moderate-income
communities and consumers that CRA targets. This would seem to be a
problem that could better be solved on a case-by-case basis rather than
eliminating the requirement that even in rural areas the target of CRA
programs should be low and moderate income communities and residents.
Your proposed change to this requirement would be likely to concentrate
lending in more affluent rural communities in the region in which I work.

The most compelling reason given by banks in support of these changes is
the regulatory and paperwork burden of compliance for small banks. If
this is, in fact, a serious problem it seems that efforts to assist
small and midsized banks in compliance with CRA through offering
improved data collection methods and software at competitive prices and
training to their staff in recordkeeping would be a far more appropriate
response than eliminating reporting requirements altogether.

Sincerely,

<>Elizabeth Higgins
Ruston, Louisiana