Federal Deposit
Insurance Corporation

From: raphael bostic [mailto:bostic@usc.edu]
Sent: Wednesday, October 13, 2004 4:51 PM
To: Comments
Subject: proposed CRA rule revision

Dear Sirs,

I am an academic researcher who studies the CRA and its effects on lending. I read with a bit of concern the recent proposal to raise the threshold limit for banks receiving a more intensive CRA examination to $1 billion. My research has shown that the CRA has led banks to extend more loans to lower-income communities than they otherwise would have and that these loans have not been unprofitable. It is curious that, without any additional information suggesting otherwise, an agency that has as a central mission assuring the flow of financial capital to the marketplace would take an action that would almost certainly restrict such flow.

I would encourage the FDIC to reconsider this proposed rule change. A better course of action would be to confer with the other banking regulatory agencies to see whether there are strategies for reducing regulatory burden that might not so clearly have a detrimental effect on the flow of capital to particular communities.

Sincerely,
Raphael Bostic
Associate Professor
USC School of Policy, Planning, and Development
213-740-1220
213-740-6170 (fax)
bostic@usc.edu