Federal Deposit
Insurance Corporation

November 12, 2004

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

Dear Sir:

Re: RIN 3064-AC50, Federal Deposit Insurance Corporation’s Proposed Revision to the Community Reinvestment Act; Proposed Rule

On behalf of the Cedar City Housing Authority, I appreciate the opportunity to comment of the Federal Deposit Insurance Corporation’s (FDIC) proposed revisions to the Community Reinvestment Act.

The Cedar City Housing Authority is a nonprofit 501(c)(3) Public Housing Authority dedicated to providing affordable housing to our rural community.

The community Reinvestment Act (CRA) has been a powerful and successful tool for revitalizing low-and moderate-income communities and supporting affordable housing especially in the rural communities. CRA also can be pointed to as one the principal driving forces behind increased homeownership and economic development in these formerly financially underserved communities. Private funding is scarce in our rural community and CRA provides funding opportunities that would otherwise not be available.

NHC is concerned that the FDIC’s proposed rule change to increase the asset threshold of “small banks” from $250 million to $1 billion will result in a significant reduction in affordable housing investment across the nation and specifically in rural areas. We urge the FDIC to maintain the current $250 million threshold for small banks.

Raising the small banks threshold to $1 billion would exempt thousands of FDIC-insured banks from meeting the current CRA standard that requires them to demonstrate investments and services in low- to moderate-income areas. It is this exemption of approximately 2,000 banks nationwide with assets of nearly $1 trillion that will drastically reduce investment in affordable housing and other community development activities.

Additionally, financial institutions with assets of $250 million to $1 billion comprise substantial market share in rural areas and such a change will mean that many rural communities and the majority of Public Housing Authorities Comments of FDIC’s Proposed Revision to the Community Reinvestment Act states will not have any institutions required to offer services and investments that benefit low- to moderate-income communities.

CRA is a critical component of affordable housing and community development activities occurring around the nation. While we understand that this proposed change is intended to reduce regulatory obstacles, it is doing so at the expense of those communities most in need of reinvestment. The Cedar City Housing Authority opposes the proposed increase in the asset threshold of “small banks” and urges the FDIC to maintain the current $250 million threshold.

The Cedar city Housing Authority would like to thank for you’re the opportunity to submit these comments. If further information would be helpful, please feel free to contact me.

Sincerely,
Heidi Miller, Executive Director
Cedar City Housing Authority