FDIC Federal Register Citations

Southeast Community Capital

From: Clint Gwin
Sent: Thursday, September 09, 2004 6:58 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

Please accept the following as my objection to the proposed rule raising the large bank threshold to $1 billion in assets for FDIC supervised banks.

As the president of a state-wide community development financial institution (CDFI) focused on commercial lending, I have great concern with exempting such a large percentage of FDIC supervised banks from the requirements of the CRA to facilitate wealth creation through job creation.

Many banks with assets ranging from $250 million to $1 billion invest in CDFIs due to the regulatory requirements of the Investment Test, without this requirement many of these banks would not make investments, which allow for job creation and wealth creation. These investments do not only help organizations like mine provide financing that creates jobs but it also provides financing to provide safe affordable housing to low- and moderate-income individuals. Without the regulatory requirements many banks would not make the initial investment to create wealth in their communities. What has been remarkable is that once banks invest they frequently increase their investments after they see the long term benefits to the community facilitated by these investments which create bank customers for home loans and business loans as these individuals and companies transition to traditional financing.

I want to compliment the regulators on discouraging banks from making grants to meet the Investment Test. I am a staunch believer that banks should always make a return on their investments. While we may not pay full market rate at all times we do provide a return on investment both economically and socially.

I understand the idea of raising the asset threshold; however, simplification of the Lending Test data collection requirements would go much further toward reducing regulatory burden than raising the threshold for the Investment and Service Test. The time associated with gathering data to meet the investment test requirements is much less than that associated with the Lending and Service Test requirements. Reduction in the documentation and data collection aspects of the CRA evaluations would better serve not only reducing regulatory burden but would leave valuable resources directed to low- and moderate-income areas available to create wealth.

I appreciate the opportunity to provide comments regarding this proposed rule change.

Clint Gwin
President
Southeast Community Capital
806 South 6th Street
Nashville, TN 37206