From: Clint Gwin
Sent: Thursday, September 09, 2004 6:58 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
Please accept the following as my objection to the proposed rule
raising the large bank threshold to $1 billion in assets for FDIC
supervised banks.
As the president of a state-wide community development financial
institution (CDFI) focused on commercial lending, I have great
concern with exempting such a large percentage of FDIC supervised
banks from the requirements of the CRA to facilitate wealth creation
through job creation.
Many banks with assets ranging from $250 million to $1 billion
invest in CDFIs due to the regulatory requirements of the Investment
Test, without this requirement many of these banks would not make
investments, which allow for job creation and wealth creation.
These investments do not only help organizations like mine provide
financing that creates jobs but it also provides financing to provide
safe affordable housing to low- and moderate-income individuals.
Without the regulatory requirements many banks would not make the
initial investment to create wealth in their communities. What
has been remarkable is that once banks invest they frequently increase
their investments after they see the long term benefits to the
community facilitated by these investments which create bank customers
for home loans and business loans as these individuals and companies
transition to traditional financing.
I want to compliment the regulators on discouraging banks from
making grants to meet the Investment Test. I am a staunch believer
that banks should always make a return on their investments. While
we may not pay full market rate at all times we do provide a return
on investment both economically and socially.
I understand the idea of raising the asset threshold; however,
simplification of the Lending Test data collection requirements
would go much further toward reducing regulatory burden than raising
the threshold for the Investment and Service Test. The time associated
with gathering data to meet the investment test requirements is
much less than that associated with the Lending and Service Test
requirements. Reduction in the documentation and data collection
aspects of the CRA evaluations would better serve not only reducing
regulatory burden but would leave valuable resources directed to
low- and moderate-income areas available to create wealth.
I appreciate the opportunity to provide comments regarding this
proposed rule change.
Clint Gwin
President
Southeast Community Capital
806 South 6th Street
Nashville, TN 37206
