FDIC Federal Register Citations

Susan Raphael
1014 Scoville aVe
Oak Park, IL 60304

September 1, 2004

Robert Feldman

FDIC
550 17th St NW
Washington, DC 20429

Dear Robert Feldman:

I urge you to support the current structure of the Community Reinvestment Act by withdrawing your proposal to raise the “small bank” definition from $250 million to $1 billion in assets. Any changes to CRA and especially the definition of a “small bank” will adversely impact community development investments in low-income and underserved areas.

Under the FDIC proposal to raise the “small bank” standard from $250 million to $1 billion, in Illinois only 13 of 467 FDIC regulated banks would be subject to the full CRA Exam, including the investment and services tests. The 467 banks in Illinois regulated by the FDIC have combined assets of over $83.4 billion. 97.2% of these banks have assets under $1 billion. With this change, an additional $31.1 billion in banks assets would only be subject to a streamlined CRA Exam. This combined with the already $33.1 billion in assets already subject to a streamlined CRA Exam, results in over $66.6 billion—or 79.8%--in assets of FDIC regulated Illinois banks not subject to the full CRA regulations.

This would eliminate the most important incentive for financial institutions to partner with CDFIs, CDCs and others engaged in community development. Without this incentive, it will be increasingly difficult for community development organizations to obtain the resources and investments to fund essential development projects, especially at a time when the national poverty rate is increasing.

In order to ensure the continued growth and sustainability of community development and its ability to provide services to traditionally underserved communities throughout the country, it is essential for FDIC to withdraw its proposal and maintain the small bank definition at $250 million.

Sincerely,

Susan Raphael