FDIC Federal Register Citations

September 13, 2004

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

Re: RIN 3064-AC50
FDIC's Proposal to Raise Asset Threshold for "Small Banks" -- OPPOSED

Dear Mr. Feldman:

The Southern California Association of Non-Profit Housing (SCANPH) strongly opposes the proposal by the FDIC to raise the asset threshold for "small banks" under the Community Reinvestment Act from the current $250 million to $1 billion. Such a change would reduce by 58% the number of institutions in California required to offer services and investments that benefit low- and moderate-income communities.

SCANPH is a 500-member organization dedicated to the production of permanently affordable housing for low-income people in Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties. Since 1987 our members have built over 60,000 units of affordable housing throughout this Southern California region. According to a recent survey, in one year – 2002 – our members had over $1.2 billion in development and the pipeline. SCANPH advocates for policies – like the City of Los Angeles Affordable Housing Trust Fund that we took a leading role in achieving – that encourage and support the development of affordable housing.

Bank investments required under the CRA provide critical resources for addressing the affordable housing crisis in Southern California. Many of our members would not be able to build affordable housing developments without the funding provided by banks fulfilling their CRA obligations. Moreover, SCANPH relies on CRA-mandated support for a significant percentage of our donor base.

Because of the complex financing mechanisms used for affordable housing, funds invested in affordable housing leverage themselves many times over, creating thousands of construction and other. jobs that in turn generate more private-sector economic activity. The proposed FDIC rule, however, would remove an important incentive for banks to make this critical investment.

We urge the FDIC to withdraw its proposed rule. If you have any questions, please contact me at (213) 480-1249, ext. 246.

Sincerely,

Lisa Payne
Policy Director
Southern California Association of Non-Profit Housing
Los Angeles, CA