Federal Deposit
Insurance Corporation

Rensselaer County Housing Resources.
415 River Street
Troy, New York 12180
(518) 272-8289
(518) 272-1950 fax
gail@triponline.org

October 20, 2004

Mr. Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th St. NW 20429
RE: RIN 3064-AC50

Dear Mr. Feldman:

Rensselaer County Housing Resources, Inc. urges you to withdraw the proposal of the Federal Deposit Insurance Corporation to quadruple -- to $1 billion -- the minimum asset size for applying the full Community Reinvestment Act (CRA) exam to state chartered non-member banks. This proposed change in the CRA regulations would have a devastating impact on lending, housing, and access to financial services in urban and rural communities across America.

CRA has been instrumental in increasing homeownership, boosting economic development, and expanding small businesses in the nation’s minority, immigrant, and low- and moderate-income communities. The FDIC proposal would dramatically diminish banks’ obligation to reinvest in their communities. It revises the CRA rules to make the less rigorous CRA exam applicable to an additional 900 banks with assets totaling $401 billion. Adoption of the FDIC measure is likely to mean the loss of hundreds of millions of dollars in loans, investments, and services for local communities and would disproportionately impact rural areas and small cities where the market presence of these mid-sized banks is often great.

In Troy, the First Niagara Bank of Troy would no longer be subject to CRA regulations as a result of the FDIC’s proposal to increase the minimum asset size of regulated banks. First Niagara currently has a good affordable housing product, enabling closing costs and prepaid expenses to be rolled into the loan. This product serves a number of our customers that would likely not be served by other conventional lenders. Of course, First Niagara’s risk is reduced as a result of the high quality pre-purchase homebuyer counseling provided by our housing counselors, last year we were able to counsel 150 people. Unfortunately, should First Niagara not be covered by CRA requirements if the FDIC proposal goes through, Troy and Rensselaer County may lose the products and other benefits that Pioneer provides to the low-income housing and community development community, as well as to low-income borrowers.

Again, I urge you to withdraw this proposal.

Sincerely,
Gail Padalino
Director