Subject: File No. S7-38-11
From: Carolann Jensen, Chief Administration Officer
Affiliation: Iowa Finance Authority

February 13, 2012

To Whom It May Concern:

The Iowa Finance Authority has concerns regarding the implementation of the rule that will limit banks’ ability to invest in Low Income Housing Tax Credit (LIHTC) projects.

IFA is the LIHTC allocating agency for Iowa and has experienced times when a number of investors left the market, limiting competition.

Projects suffered due to the lack of competition amongst investors. Because banks are such a sizeable portion of the tax credit equity market, guidance preventing banks from investing in LIHTC projects could create a dramatic decrease in the amount of subsidy available for the congressionally mandated goals the tax credits were enacted to achieve.

The size of most tax credit transactions compared to a banking entity's overall transactions is very small and generally not material to the banks. Moreover, investments made under the LIHTC program are strictly monitored for compliance by a variety of government agencies, including the Internal Revenue Service, Treasury Department, and IFA.

IFA strongly believes that implementation of the “Volker Rule” would have a detrimental impact on our ability to provide sustainable, affordable and safe housing to our low-income residents.

Carolann Jensen