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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

JOHN STEWART COMPANY

September 15, 2004

Mr. Robert E. Feldman
Executive Secretary
Commercial/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429

Dear: Mr. Feldman:

I am the President of the The John Stewart Company (JSCo), which both develops low-income housing and manages almost 19,000 low-income housing units throughout California. We are just one of the many organizations committed to increasing the flow of private capital to our nation's low and moderate income (LMI) communities.

We are very concerned that the proposed rule changes by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) to offer "streamlined" testing under the Community Reinvestment Act (CRA) to institutions up to $1 billion in 'assets will harm affordable housing and community and economic development m low and moderate income communities, particularly in rural areas.

As you know, the CRA was enacted to encourage federally insured financial institutions to meet the credit needs of their communities, including LMI persons. Pursuant to the CRA, communities, private developers and nonprofit corporations partner with banks to leverage limited federal subsidies with private capital for meeting communities' needs. The proposal to increase the threshold for "streamlined" testing under CRA to institutions up to $1 billion in assets will pull the rug out from many of these partnerships.

The FDIC's own data suggests that the proposed rule change by 2 of the 4 bank regulatory agencies would eliminate any regulatory; incentive for at least 1300 banks to include LMI persons in their community services and investments. Some states like Wyoming and Idaho would have NO bank charters with a CRA impetus to invest in or provide services to their communities, while others such as Vermont, Alaska, and Montana would only have ONE such charter!' Because institutions with assets of $250 million to $1 billion comprise substantial market share in rural areas, this change means that many rural communities and states will'not have any institutions required to offer services and investments that benefit low and moderate income communities.

JSCo agrees with Senator Paul Sarbanes, ranking member of the Senate Banking Committee, that the proposal is both an "extreme action" and an example of "bad policy," and we URGE you not to adopt it. With public subsidies drying up, now is NOT the time to eliminate regulatory incentives for private capital to leverage scarce subsidy dollars. All communities deserve evidence that financial institutions enjoying the benefits of Federal deposit insurance are documenting how they are helping to meet the credit needs of their communities.

Thank you for your attention to this matter, and for your commitment to ensuring that private capital will continue to flow to, and benefit, LMI households and distressed communities throughout our country.

Sincerely,
Jack D. Gardner
President & CEO
John Stewart Company
San Francisco, CA

Cc: Senator Diane Feinstein
Senator Barbara Boxer
House Democratic Leader Nancy Pelosi

Last Updated 10/19/2004 regs@fdic.gov

Last Updated: August 4, 2024