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CITIZENS LIGHTHOUSE COMMUNITY LAND TRUST From: Sue
Carlson [mailto:sdsue@sbcglobal.net]
Sent: Friday, September 17, 2004 11:33 PM
To: Comments
Subject: Community Reinvestment--RIN 3064 AC50
I am writing On behalf of the Citizens' Lighthouse Community Land
Trust to oppose the Federal Deposit Insurance Corporation (FDIC)
proposed changes to the Community Reinvestment Act (CRA). If the FDIC
adopts these changes, community development activity in low- and
moderate-income neighborhoods and rural areas throughout the Chicago
region and the nation will be threatened and it will increase the
difficulty we have in finding funds for our land trust.
The FDIC’s decision is harmful for a number of reasons. First, the FDIC
is the primary regulator of many state chartered banks that frequently
fall between $250 million and $1 billion in assets. For institutions
active in Illinois in 2003, nearly 40 percent of assets controlled by
FDIC-regulated institutions were held by banks with assets between $250
million and $1 billion. Additionally, the proposed changes would
dramatically affect the presence of FDIC-regulated institutions in
Illinois’ LMI and rural communities. An analysis of 2003 banking offices
in Illinois urban areas indicates that increasing the asset size of
small banks to $1 billion would decrease the number of FDIC-regulated
banking offices in Illinois LMI census tracts operated by “large” banks
by 63 percent. Deposits in LMI branches held by “large” FDIC-regulated
banks would decline by 68 percent. FDIC-regulated branches controlling
nearly $3.4 billion in LMI deposits, or over 10 percent of all LMI
deposits state-wide, would shift from “large” to “small” institution
status if the asset size of small banks were to increase to $1 billion.
Rural areas will be hard hit as well. Just over 1 percent of rural
Illinois banking offices operated by FDIC-regulated institutions would
be held by “large” banks, a decline of 91.5 percent. This shift would
represent nearly 8 percent of rural deposits state-wide.
The proposed changes would reduce the number of financial
institutions considered “large” for CRA purposes. Our organization fears
this will threaten access to investments, grants, and services for low-
and moderate-income (LMI) communities served by large institutions that
would shift to “small” status under the regulators’ proposal. There is a
significant concern that areas predominantly served by mid-sized
institutions will be particularly hard hit.
We oppose these changes to the Community Reinvestment Act and ask
that FDIC drop this proposal.
Sincerely,
Suzanne Carlson, Secretary
Citizen's Lighthouse Community Land Trust
Evanston, Illinois |
