Federal Deposit
Insurance Corporation

From: Tom Feltner [mailto:tfeltn1@uic.edu]
Sent: Friday, October 15, 2004 3:01 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

I am writing to strongly oppose the Federal Deposit Insurance Corporation (FDIC) proposed changes to the Community Reinvestment Act (CRA). My community, which is primarily served by a bank that would be affected by these changes, would likely see a dramatic falloff of much needed affordable services and community development investments.

The FDIC's decision is harmful for a number of reasons. First, the FDIC is the primary regulator of many state chartered banks that frequently fall between $250 million and $1 billion in assets. For institutions active in Illinois in 2003, nearly 40 percent of assets controlled by FDIC-regulated institutions were held by banks with assets between $250 million and $1 billion. Additionally, the proposed changes would dramatically affect the presence of FDIC-regulated institutions in Illinois' LMI and rural communities. An analysis of 2003 banking offices in Illinois urban areas indicates that increasing the asset size of small banks to $1 billion would decrease the number of FDIC-regulated banking offices in Illinois LMI census tracts operated by "large" banks by 63 percent. Deposits in LMI branches held by "large" FDIC-regulated banks would decline by 68 percent. FDIC-regulated branches controlling nearly $3.4 billion in LMI deposits, or over 10 percent of all LMI deposits state-wide, would shift from "large" to "small" institution status if the asset size of small banks were to increase to $1 billion. Rural areas will be hard hit as well. Just over 1 percent of rural Illinois banking offices operated by FDIC-regulated institutions would be held by "large" banks, a decline of 91.5 percent. This shift would represent nearly 8 percent of rural deposits state-wide.

The proposed changes would reduce the number of financial institutions considered "large" for CRA purposes. Our organization fears this will threaten access to investments, grants, and services for low- and moderate-income (LMI) communities served by large institutions that would shift to "small" status under the regulators' proposal. There is a significant concern that areas predominantly served by mid-sized institutions will be particularly hard hit.

I strongly oppose these changes to the Community Reinvestment Act and ask that FDIC drop this proposal.

Sincerely,
Thomas Feltner