FDIC Federal Register Citations

From: Lucy Gorham [mailto:lgorham@mdcinc.org]
Sent: Thursday, October 14, 2004 10:17 AM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

Dear FDIC,
EITC Carolinas works with a wide network of community organizations that are helping low and moderate income families access federal tax credits and then tie those credits to programs to bank the unbanked and build assets. We are opposed to the proposed changes in the Community Reinvestment Act regulations that affect mid-sidized banks. The community development criterion would be seriously deficient as a replacement for the investment and service tests. Mid-size banks with assets between $250 million and $1 billion would only have to engage in one of three activities: community development lending, investing or services. Currently, mid-size banks must engage in all three activities.
Under your proposal, a mid-size bank can now choose a community development activity that is easiest for the bank instead of providing an array of comprehensive community development activities needed by low- and moderate-income communities.
The proposed community development criterion will result in significantly fewer loans and investments in affordable rental housing, Low-Income Housing Tax Credits, community service facilities such as health clinics, and economic development projects. It will be too easy for a mid-size bank to demonstrate compliance with a community development criterion by spreading around a few grants or sponsoring a few homeownership fairs rather than engaging in a comprehensive effort to provide community development loans, investments, and services.
Certainly the joint goals of alleviating regulatory burden and keeping investment within a local community can be achieved without such sweeping and negative changes to the existing law. Please reconsider, and thank you for considering our views.

Sincerely,
Lucy Gorham
Director, EITC Carolinas
MDC
PO Box 17268
Chapel Hill, NC 27516-7268
(919) 968-4531 Fax: (919) 929-8557