FDIC Federal Register Citations

From: Will Bradshaw [mailto:willyb@MIT.EDU]
Sent: Monday, September 20, 2004 10:55 AM
To: Comments
Subject: Community Reinvestment 12 CFR Part 345

I oppose the FDIC's proposal to allow banks with assets above $250 million
to be examined as small banks under the Community Reinvestment Act. This
policy would reduce lending, investments and services in low-income
communities.

In addition, I oppose the change in definition where qualified “community investment” activities would include activities that benefit low and moderate income people or people who live in rural areas. My opposition to the second point revolves around the open-endedness of the targeting for rural areas. Many rural areas in this country are poor and could benefit from such investment. However, due to the federal definition of low and moderate income being based on median household income, many poor households in isolated areas are not classified as “low and moderate income” since they may make above average incomes in their particular geographic area. This is a significant problem, and it would be right to address it. However, the current rule change does not appropriately target the problem or offer a closed-end solution to the apparent difficulty. Instead, it could, in my reading, allow investments in estate homes in rural counties as qualified community investment expenditures or some similar scenario that cuts against the purpose and intent of the CRA law. If you want to fix the problem, then do that. But do not write legislation that can be so easily gamed. California’s energy crisis was debacle enough.

Sincerely,

Will Bradshaw
Cambridge, MA