Northeast Ventures Corporation
From: Mark Phillips [mailto:mphillip@neventures.com]
Sent: Thursday, September 23, 2004 4:24 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
September 23, 2004
Robert E. Feldman
Executive Secretary
Attn.: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street N.W.
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman,
I am Mark R.
Phillips and I am Vice President of Northeast Ventures Corporation,
a community
development venture capital firm operating
in northeastern Minnesota. We manage approximately $16 million in
capital, much of it provided by non-traditional investors. Northeast
Ventures strongly opposes your proposal to raise the definition of "small
institution" from its current $250 million in assets to the
proposed $1 billion. We are also concerned that your proposal to
modify the definition of "community development" to include
any investing or service activities in rural areas runs counter to
the goals of the Act. We are concerned how the proposed changes would
affect local banking markets. We feel that this proposal could have
very negative effects on many local communities. Independent research
indicates that the proposed FDIC changes would mean only 4% of all
FDIC regulated institutions would be covered by the more rigorous
Large Institutions exam.
We are also opposed
to your proposal to change the definition of "community
development", which would append "rural areas" to
the current definition of community development. Our organization
believes that the current definition, which clearly and rightly emphasizes
low or moderate income individuals and geographies, is the proper
definition. Northeast Ventures believes re-defining CRA is not the
proper way to address the financial challenges facing rural populations
and communities and encourages the FDIC and all of the federal regulators
to continue to focus on improving access to credit and capital in
rural parts of the United States.
Northeast Ventures
Corporation urges the FDIC to reconsider the proposed changes to
the CRA regulation,
which appear inconsequential
at the national scale. We feel the proposed changes would have substantial
adverse consequences in rural communities. We also feel strongly
that the proposes change in "community development", which
is intended to offset these negative effects, would result in less
access to credit and capital for low to moderate income people in
rural communities.
Thank you for providing the opportunity to comment on you proposed
changes to the FDIC's CRA regulations.
Sincerely
Mark R. Phillips
Vice President
Northeast Ventures Corporation
747 Sellwood Building
202 West Superior Street
Duluth, Minnesota
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