Federal Deposit
Insurance Corporation

From: Christy Metzler [mailto:cls64111@hotmail.com]
Sent: Wednesday, October 20, 2004 10:27 AM
To: Comments
Subject: Withdraw Proposal to Weaken CRA

Christy Metzler
4124 Oak Street
Kansas City, MO 64111

Dear Federal Deposit Insurance Corp:

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

RE: RIN 3064-AC50

Dear Mr. Feldman:

As a community development practicioner, I urge you to withdraw your proposed changes to the Community Reinvestment Act (CRA) regulations. If enacted, the FDIC will define small banks as $1 billion and less with those banks having assets between $250 million and $1 billion subject to community development criteria.

Under current regulations, banks with assets of at least $250 million have performance evaluations that review lending, investing, and services to low- and moderate-income communities. You propose that state-chartered banks with assets between $250 million and $1 billion follow a community development criterion that allows banks to offer community development loans, investments OR services will result in significantly fewer loans and investments in low-income communities¯the very communities that the CRA was enacted to serve. Currently, mid-size banks must show activity in all three areas of assessment. Under the proposed regulations, the banks will now be able to pick the services convenient for them, regardless of community needs.

This proposal would remove 879 state-chartered banks with over $392 billion in assets from scrutiny. This will have harmful consequences for low- and moderate-income communities. Without this examination, mid-size banks will no longer have to make efforts to provide affordable banking services or respond to the needs of these emerging domestic markets.

In addition, your proposal eliminates small business lending data reporting for mid-size banks. Without data on lending to small businesses, the public cannot hold mid-size banks accountable for responding to the credit needs of small businesses. Since 95.7 percent of the banks you regulate have less than $1 billion in assets, there will be no accountability for the vast majority of state-chartered banks.

The impetus for the creation of the CRA was to encourage federally insured financial institutions to meet the credit and banking needs of the communities they serve, especially low- and moderate-income communities. This proposal undermines the intent of CRA, and threatens to undo the years of effort to bring unbanked consumers into the financial mainstream. I urge you to remove this dangerous proposal from consideration.

I would appreciate your response to the concerns I have raised.

Sincerely,
Christy Metzler