Federal Deposit
Insurance Corporation

From: Nochomovitz, Lara [mailto:lnochomovitz@lutheranmetro.org]
Sent: Friday, October 15, 2004 1:39 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

I am writing on behalf of the Lutheran Metropolitan Ministry Advocacy Taskforce in Cleveland, OH. The Community Reinvestment Act is integral to Cleveland's affordable housing and community development solutions. According to recent US census data, Cleveland is the poorest city in the Country; it is desperately in need of the resources that CRA offers. As such, we oppose any increase to the threshold of what is considered to be a small bank. We also oppose the proposed community development criteria. The proposed rule would affect two of six Cleveland banks that the FDIC regulates.

Currently a bank's rating is based on an evaluation of its performance on lending, investment, and services to low- and moderate income communities. The proposed rule change would eliminate the investment and service criteria for banks with a threshold between $250 million and $1 billion, and replace them with a community development criterion. The proposed community development criterion would allow mid-sized banks to participate in investment, lending or services, instead requiring all three activities, as is currently the practice. We oppose reducing the regulatory burden and encourage the FDIC to continue holding banks accountable to at least the current community development regulatory standards.

While the FDIC regulates few Cleveland banks, the proposed FDIC rule may have implications for other federal regulatory agencies (OCC, OTB, FRB). The proposed change would set a precedent for a policy that would exempt many of our community's critical partners from the effective and productive requirements currently in place- historically, the regulatory agencies have historically taken action together. Even in the event that the other regulatory agencies did not follow suit with FDIC, banks currently regulated by other agencies are able to switch regulatory agencies in order to only be accountable to the less stringent standards. We encourage the FDIC to withdraw the proposed rule change.

Thank you,
Lara Nochomovitz
Advocacy Associate