FDIC Federal Register Citations

From: Melissa Compton [mailto:mcompton@knoxalumni.org]
Sent: Monday, October 18, 2004 12:21 PM
To: Comments
Subject: Contact FDIC Today to Oppose Changes to CRA

Melissa Compton
1866 N Marcey St
Chicago, IL 60614

October 18, 2004

Robert Feldman

FDIC
550 17th St NW
Washington, DC 20429

Dear Robert Feldman:

RE: RIN 3064-AC50

I urge you to support the current structure of the Community Reinvestment
Act by withdrawing your proposal to raise the “small bank” definition from
$250 million to $1 billion in assets. Any changes to CRA and especially
the definition of a “small bank” will adversely impact community
development investments in low-income and underserved areas.

Under the FDIC proposal to raise the “small bank” standard from $250
million to $1 billion, in Illinois only 13 of 467 FDIC regulated banks
would be subject to the full CRA Exam, including the investment and
services tests. The 467 banks in Illinois regulated by the FDIC have
combined assets of over $83.4 billion. 97.2% of these banks have assets
under $1 billion. With this change, an additional $31.1 billion in banks
assets would only be subject to a streamlined CRA Exam. This combined with
the already $33.1 billion in assets already subject to a streamlined CRA
Exam, results in over $66.6 billion—or 79.8%--in assets of FDIC regulated
Illinois banks not subject to the full CRA regulations.

This would eliminate the most important incentive for financial
institutions to partner with CDFIs, CDCs and others engaged in community
development. Without this incentive, it will be increasingly difficult
for community development organizations to obtain the resources and
investments to fund essential development projects, especially at a time
when the national poverty rate is increasing.

In order to ensure the continued growth and sustainability of community
development and its ability to provide services to traditionally
underserved communities throughout the country, it is essential for FDIC
to withdraw its proposal and maintain the small bank definition at $250
million.

Sincerely,

Melissa Compton