Federal Deposit
Insurance Corporation

September 15, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429

RE: RIN 3064-AC50

Dear Mr. Feldman:

I am a concerned citizen opposed to your proposal to water-down CRA requirements for mid-sized banks. CRA is vital for increasing homeownership and economic development in lower-income communities. But your proposed changes will halt all of this progress.

First of all, your proposal would eliminate the investment and service requirements for all banks with under $1 billion in assets. Do you guys really understand how many institutions and assets would be impacted? Ninety-six percent of the banks you regulate! And these banks have over $754 billion in assets. Ultimately, it will mean significantly fewer loans and investments in affordable rental housing, health clinics, community centers, and economic development projects, just to name a few.

Then there’s the issue of you trying to throw a "community development criterion" bone. In the watered-down exam you want to offer to more banks, mid-sized banks will choose which one community development activity they will undertake. Right now, these banks must participate in three community development activities: loans, investments, and services. Congress enacted CRA to say that banks had an obligation to meet the credit needs of the communities they served. It did not enact CRA so banks could decide what needs those might be and then cherry pick which one is best for them. But your proposed test would allow this to happen and it would be the cause for a reduction in community development activity in neighborhoods.

You also want community development activities in rural areas to go to anyone at all, rather than the low- and moderate-income individuals that deserve them. Do you have something against poor rural people or do you just want your wealthy friends in the country to get more golf courses?

Let’s face it. Your changes directly oppose CRA’s mandate to require lenders to meet community needs. As a law enacted by Congress, CRA is too important to be picked apart to pieces by regulators. Please recognize the harm your proposal will do to underserved communities and drop it as the OCC and the Fed did.

Sincerely,