SJF Ventures
TO: Federal Deposit Insurance Corporation
Robert Feldman
Executive Secretary
550 17th Street NW
Washington, DC 20429
comments@fdic.gov
FROM: David Kirkpatrick
Managing Director, SJF Ventures
dkirkpatrick@sjfund.com
DATE: April 6, 2004
RE: Joint Notice
of Proposed Rulemaking’s on the Community
Reinvestment Act (Federal Register, Vol. 69. No. 25 pp.5729+)
I am writing on behalf of SJF Ventures to express our support for
a strong Community Reinvestment Act (CRA.) Specifically, we are
writing to oppose the proposal to limit CRA’s applicability
for smaller financial institutions and to reduce the application
of the investment test with CRA. We also are writing to support
the expansion of CRA to a broader range of financial institutions,
such as insurance companies.
SJF Ventures is a venture capital fund with a mission to serve low-wealth
citizens and communities that has been certified as a Community Development
Financial Institution (CDFI) by the U.S. Treasury Department. Our
fund was capitalized with $17 million in investments, primarily from
banks incentivized in part by CRA, such as Bank of America, Wachovia,
Citibank, Deutsche Bank, and MBNA. We are in the process of raising
a second fund of $50 million; A strong CRA is important to continuing
to encourage financial institutions to invest in funds such as ours
that prioritize creating employment and asset-building opportunities
for low-income families. SJF
SJF’s portfolio companies have retained and created 1,583
jobs to date. Seventy-five percent of those positions have been filled
by low-wealth employees. Nearly all of the portfolio companies provide
employer-paid health insurance and many offer employee training programs,
401K plans and profit sharing or broad-based employee stock options.
SJF portfolio companies have fostered community revitalization, with
77% of portfolio company sites and 64% of employee residences in
economically distressed urban or rural locations. SJF has led or
co-led financing rounds in 13 of 18 portfolio companies, with SJF
investing $10.2MM in rounds totaling $44MM. Most of these companies
would not have received sufficient financing without SJF’s
leadership.
Investing with a CRA motivation is also good business for banks.
Due to our diversified and expansion stage investment strategy, we
anticipate returning more capital to our bank investors than most
conventional venture capital funds capitalized, like SJF, in 1999.
Thank you for your attention to our feedback.
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