FDIC Federal Register Citations

September 14, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW,
Washington, DC 20429

Re: RIN 3064-AC50

Dear Mr. Feldman:

As a financial advisor representing several clients interested in community development, I am personally and professionally opposed to weakening the Community Reinvestment Act ("CRA") requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. Your proposed changes will hamper the progress that has been made.

Under the current legislation, banks with over $250 million in assets must be tested on their number of loans, investments, and services to low- and moderate-income communities. Your 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.

The proposal 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. Your proposed test allows banks to choose only one of the three activities. The result will be less community development activity.

You also propose that community development activities in rural areas should benefit any group of individuals instead of only low- and moderate-income individuals. But this will allow banks to focus on affluent residents of rural areas rather than the lower income consumers that CRA targets. Finally, you 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.

Your changes directly oppose CRA's mandate to require lenders to meet community needs. CRA is too important to be gutted. Please join the Federal Reserve Board and the Office of the Comptroller of the Currency in rejecting this proposal.

Sincerely,
John H. Biebel
Tanager Financial Services Inc.
Waltham, MA

cc: National Community Reinvestment Coalition (fax: 202/628-9800)
President George W. Bush (fax: 202/456-2461)
Senator John Kerry (fax: 202/224-8525)
Senator John Edwards (fax: 202/8-1374)