SecProbe.io

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BUC$
  FEDERAL
    BANK

www.bucsfederal.com

July 18, 2005

Mr. John P. Nolan
Accounting Branch Chief
United States Securities and Exchange Commission
100 F Street, NE
Mail Stop 4561
Washington, D.C.  20549

Dear Mr. Nolan:

In response to the staff's letter of comment,  dated July 1, 2005, regarding our
Annual  Report on Form 10-KSB for the fiscal year ending  December 31, 2004,  we
submit the following information.

The  agreement  with  Carefirst  that  is  referenced  in  our  Note  #15 to the
consolidated  financial  statements  at  December  31, 2004 is the result of the
long-standing  relationship between BUCS Financial Corp's principal  subsidiary,
BUCS Federal Bank  ("BUCS"),  and Carefirst of Maryland,  Inc.  ("CFMI") and its
predecessors.

BUCS was  originally  chartered  in 1970 as Maryland  Blue Cross and Blue Shield
Employees  Federal Credit Union primarily serving the employees of a predecessor
to CFMI. It is commonplace within the credit union industry for the credit union
to receive  facility space from a "sponsoring"  organization in order to provide
its  services  to  employees  of  that  sponsoring  organization.  A  sponsoring
organization  does not maintain any control over the credit union and the credit
union and sponsoring organization are separate and distinct entities. Consistent
with this common practice BUCS was provided space within CMFI's  operation while
acting as a credit  union.  In 1998,  BUCS  converted  its  charter to that of a
federal  mutual  thrift in order to expand  its  service  capabilities  and open
additional  branch offices  outside of CFMI. In 2001,  BUCS converted to a stock
form as a wholly owned  subsidiary  of BUCS  Financial  Corp.  Throughout  these
charter changes BUCS has continued to serve the employee  population of CFMI and
still serves a high  percentage  of CFMI  employees as their  primary  financial
institution.

In July  2002 BUCS and CFMI  entered  into a formal  lease  for space  that BUCS
occupied at CFMI's headquarters building at 10455 Mill Run Circle, Owings Mills,
Maryland in order to provide  continued  financial  services to CFMI  employees.
This agreement for this space allocation  expires in 2009. In consideration  for
the space, BUCS  provides  several  administrative  services  for  CFMI and  its
employees  without imposing fees or

<TABLE>
<CAPTION>
<S>                     <C>
10802 Red Run Boulevard o Owings Mills, Maryland 21117 o PHONE: (443) 394-0047 o FAX: (443) 394-6684
10455 Mill Run Circle o Owings Mills, Maryand 21117 o PHONE: (410) 998-5304 o FAX: (410) 998-6674
8620 Snowden River Parkway o Columbia, Maryland 21045 o PHONE: (443) 285-0539 o FAX (443) 285-0156
8801 Columbia 100 Parkway o Columbia, Maryland 21045 o PHONE: (410) 720-3115 o FAX: (410) 884-0684
</TABLE>

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charges  to CFMI  for  such  services.  Examples  of the  services  provided  in
consideration for the allocation of space include:

o    To collect  over-the-counter  payments from individual CFMI  subscribers by
     credit, cash, or check
o    To maintain  depository  accounts  for CFMI  treasury and redeem petty cash
     vouchers
o    To provide banking services for the cafeteria and other commercial services
     located on-site.
o    To Market CFMI services to CFMI  subscribers  as they make payments to BUCS
     tellers
o    To provide  other  services of benefit to employees  and BUCS  customers as
     agreed upon between the parties from time to time
o    To provide on-site cashier and various human resource related services such
     as:
          o    Check cashing within BUCS predefined limits
          o    Postage stamp sales
          o    Discount amusement park ticket sales
          o    Motor vehicle purchase certification programs
          o    Assistance in  coordinating  certain special  employee  functions
               such as tickets to entertainment events
          o    Work with HR to provide other financial services that may benefit
               employees
          o    Armored courier services

CFMI  estimates that these  services  provided by BUCS saves them  approximately
$179,000 per year in  administrative  costs and has suggested  that this savings
justifies the  allocation of space to BUCS. A market study at the time the lease
was signed showed cost per square foot of the retail space  occupied by BUCS was
approximately  $41.00 per square  foot with BUCS  occupying  approximately  2900
square feet of space. This market value assessment indicated an annual occupancy
expense of  approximately  $120,000 per year should BUCS have to lease the space
on the open market

All agreements with CFMI have been  consummated in arms-length  transactions and
whose terms are consistent with commercial  market rental rates and terms in the
marketplace.  Today, and at the time the formal lease agreement was signed, CMFI
and BUCS operated as independent organizations with neither having a controlling
interest over one or the other.

The  accounting  guidance  used to recognize  this lease  agreement in APB 29 is
consistent with BUCS recognition of the exchange of nonmonetary assets at market
value.  BUCS  recognizes  the monetary  consideration  of the leasehold  expense
($120,000) and a related fee ($120,000) that would otherwise be charged CFMI for
the services provided per APB 29 paragraph 22.

         The exchanges of  nonmonetary  assets that would  otherwise be based on
         recorded  amounts  (paragraph  21) may  include  an amount of  monetary
         consideration.  The Board  believes  that the recipient of the monetary
         consideration  has realized gain on the exchange to the extent that the

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         amount of the monetary  receipt  exceeds a  proportionate  share of the
         recorded  amount  of the asset  surrendered.  The  portion  of the cost
         applicable  to the realized  amount should be based on the ratio of the
         monetary  consideration to the total  consideration  received (monetary
         consideration  plus the estimated fair value of the  nonmonetary  asset
         received)  or,  if  more  clearly  evident,   the  fair  value  of  the
         nonmonetary  asset  transferred.  The Board  further  believes that the
         entity paying the monetary  consideration should not recognize any gain
         on a  transaction  covered in paragraph 21 but should  record the asset
         received  at the  amount of the  monetary  consideration  paid plus the
         recorded  amount of the  nonmonetary  asset  surrendered.  If a loss is
         indicated by the terms of a transaction  described in this paragraph or
         in paragraph 21, the entire  indicated  loss on the exchange  should be
         recognized.

The company acknowledges that it is responsible for the adequacy and accuracy of
disclosure in public filings. It further acknowledges that SEC staff comments or
changes to  disclosure  in  response  to staff  comments  do not  foreclose  the
Commission  from taking any action  with  respect to such filing and the company
may not assert staff  comments as a defense in any  proceeding  initiated by the
Commission or any person under the federal securities laws of the United States.

We trust that the foregoing is responsive to the staff's comments. Please do not
hesitate  to  call  me  or  Matthew  Ford,  our  Chief  Financial  Officer,   at
410-998-5304 ext 5961 and 3821, respectively,  if you should have any additional
questions or require additional information.

Sincerely,

/s/Herbert J. Moltzan

Herbert J. Moltzan
President and Chief Executive Officer
BUCS Financial Corp.
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