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FDIC Federal Register Citations

October 31, 2003

ILLINOIS EQUITY FUND

Ms. Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
Twentieth Street and Constitution Avenue, NW
Washington, DC 20551
Attention: Docket No. R-1154

Office of the Comptroller of the Currency
250 E Street, SW
Public Information Room
Mail Stop 1-5
Washington D.C. 20219
Attention: Docket No. 03-14

Regulations Comments
Chief Counsel's Office
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
Attention: No. 2003-27

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

Dear Sirs:

The Illinois Equity Fund Is a syndication firm. We appreciate the opportunity to comment on the proposed Risk-Based Capital Rules.

Illinois Equity Fund very much favors the provision of the proposed special rule for "Legislated Program Equity Exposures" that preserves the current capital charge on most equity Investments made under legislated programs that involve government oversight, including public welfare investments made by banks in compliance with Community Reinvestment Act (CRA) regulations -- a critical source of private capital financing for affordable housing needs.

However, the proposed "materiality" test for banks that have on average, more than 10% of (Tier I plus Tier 2) capital in ALL equity investments could have an unintended consequence. The proposed rule change could discourage banks with substantial CRA investments from maintaining the same level of CRA investments, to avoid incurring higher capital charges on non-CRA investments. We urge you to exclude CRA-related investments from the materiality test calculation.  In order to maintain the vital flow of equity capital for communities' affordable housing needs.

Sincerely,

William W. Higginson
President & CEO
Illinois Equity Fund
One East Superior Street
Chicago, IL  60611

Last Updated 11/06/2003 regs@fdic.gov

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