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SJF VENTURES
TO: 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
FROM: David Kirkpatrick
Managing Director, SJF Ventures
dkrrkpatrick@sjfund.com
DATE: September 21, 2004
RE: FDIC Proposed Changes to the Community Reinvestment Act
I am writing on behalf of SJF Ventures to express our support for a
strong Community Reinvestment Act ("CRA"). Specifically, we are writing
to oppose the proposal to change the CRA definition of "small bank" to
those with less than $1 billion in assets and to eliminate comprehensive
CRA exams for 879 FDIC state-chartered banks. These changes, along with
a community development criterion that allows banks a choice in their
community-development activities (eg, loans, investments, OR services),
would drastically limit the scope and scale of financial services
available to many rural and low-income communities, creating a capital
drought and stunting economic development efforts. These changes would
also negatively impact our organization's ability to support small
businesses in these areas.
SJF Ventures is a venture capital fund with a mission to serve
low-wealth citizens and communities that has been certified as a
Community Development Financial Institution (CDFI) by the U.S. Treasury
Department. Our fund was capitalized with $17 million in investments,
primarily from banks incentivized in part by CRA, such as Bank of
America, Wachovia, Citibank, Deutsche Bank, and MBNA. We are in the
process of raising a second fund of $50 million. A strong CRA is
important to continuing to encourage financial institutions to invest in
funds such as ours that prioritize creating employment and
asset-building opportunities for low-income families.
SJF's portfolio companies have retained and created more than 1,600
jobs to date. Seven five percent of those positions have been filled by
low-wealth employees. Nearly all of the portfolio companies provide
employer-paid health insurance and many offer employee training
programs; 401K plans and profit sharing or broad-based employee stock
options., SJF portfolio companies have fostered community
revitalization, with 77.% of portfolio company sites and 64% of employee
residences in economically distressed urban or rural locations. SJF has
led or co-led financing rounds in 13 of 18 portfolio companies, with SJF
investing $10.2MM in rounds totaling $44MM. Most of these companies
would not have received sufficient financing without SJF's leadership.
Investing with a CRA motivation is also good business for banks. Due
to our diversified, expansion-stage investment strategy, we anticipate
returning more capital to our bank investors than most conventional
venture capital funds capitalized, as we were, in 1999.
Thank you for your attention to our feedback. To learn more about our
fund, visit www.sjfund.com.
400 West Main Street, Suite 604, Durham, NC 27701 P 919.530.1177 F
919.530.1178 |
