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FDIC Federal Register Citations

Louisville Community Development Bank
Louisville, KY

March 4, 2002

Robert E. Feldman
Executive Secretary
Attention: Comments/OES
Federal Deposit Insurance Corporation
550 - 17th Street, N.W.
Washington, D.C. 20429

Dear Mr. Feldman:

We write to comment on the proposed changes in the definition of "minority owned institution".

The FDIC has long recognized the importance of minority owned institutions and has historically taken steps to preserve and encourage their growth and stability. After reading the FDIC Federal Register Citations, we accept your invitation and want to make three specific recommendations:

1. In the "Policy Statement on Encouragement and Preservation of Minority Ownership of
    Financial Institutions," drop all uses of the word "ownership" so that it becomes "Policy       Statement on Encouragement and Preservation of Minority Financial Institutions."
2. Along with encouraging and preserving ownership of minority institutions, the FDIC
    should encourage and preserve those institutions that serve minority communities.
3. "Ownership" should no longer be used as the single determining factor for what
    constitutes a minority institution.

While minority owned institutions often promote the economic viability of minority and underserved communities, minority ownership is no guarantee that a minority community is served. You should extend the same services and benefits offered minority owned institutions to institutions that can demonstrate that the majority of their activities serve minority populations. Thus, the definition of a minority institution should have two criteria. An institution would qualify as a minority institution if it meets either criteria. The first criteria would be minority ownership. The second would be that the institution serves a minority community.

Description of Louisville Community Development Bank.

Louisville Community Development Bank is an FDIC-insured commercial bank. Our mission is to stimulate economic growth within the 12 inner city neighborhoods of Louisville, KY, by providing an array of financial and development resources. This mission is accomplished by making affordable loans to inner city businesses, homeowners and/or individuals wishing to rehabilitate inner city residential or commercial properties. We are certified as a Community Development Financial Institution (CDFI) by the U.S. Department of Treasury. We are a self-sustaining institution that does not reply on public funding or grants. Loans made by this bank are funded solely through Certificates of Deposit that have been purchased by individuals or corporations that believe in the wisdom of rebuilding inner city neighborhoods.

Approximately 80,000 people reside in the inner city neighborhoods that we serve (our "Investment Area"). Thirty-eight percent of the population lives below poverty and unemployment is three times the national rate. According to the 1990 U.S. Census data, 75% of this population is African-American.

Businesses or homes must be located in our Investment Area to qualify for a loan from us. Outside businesses may qualify by either providing services to, or hiring residents from the Area. In 2001, we made 113 loans into these neighborhoods. Eighty point five percent of these loans were made to minority owned businesses and 39% were made to women.

Louisville Community Development Bank can not be considered as minority owned. One hundred percent of Bank stock is owned by our holding company, Louisville Development Bancorp. One hundred percent of Bancorp stock is owned by 29 local individuals and corporations. However, we would be considered minority controlled because the Bancorp President/CEO is an African American, the President/CEO of Louisville Community Development Bank is African American and our 14-member Board of Directors includes eight minorities.

We applaud the efforts of the FDIC to preserve and encourage minority ownership of depository institutions thus far. We now encourage you to be more inclusive in your new definition so that more minority banks can benefit.

Respectfully submitted,
Kelly Downard
President and CEO

Last Updated 03/04/2002

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