From: Fernando Bejar [mailto:fbejar@nm.net]
Sent: Thursday, September 16, 2004 11:07 AM
To: Comments
Cc: cford@ncrc.org
Subject: Community Reinvestment Act
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
I am a concerned Mexican-American Planning student and Citizen
opposed to watering down CRA (Community Reinvestment Act) requirements
for mid-sized banks. CRA is vital for increasing homeownership and
economic development in lower-income communities. However, your proposed
changes will halt the progress that has been made; progress that has
been in my community.
I understand that banks with over $250 million in assets must be
tested on their number of loans, investments, and services to low- and
moderate-income communities. But your proposal would eliminate the
investment and service
requirements for all banks with under $1 billion in assets. This will
result in significantly fewer loans and investments in affordable rental
housing, health clinics, community centers, and economic development
projects, all that are needed in my community. Without them we would
suffer greatly.
In the watered-down exam, you would allow mid-sized banks to choose
which community development activities they will undertake. Right now,
these banks must make community development loans, investments, and
services. Your proposed test allows banks to choose only one of the
three activities. The result will be less community development
activity. This would mean that someone with good credit and wants to
help revitalize his/her community, for example through economic
development, could be rejected because the bank wishes to concentrate on
services as opposed to making loans.
You also propose that community development activities in rural areas
should benefit any group of individuals instead of only low- and
moderate-income individuals. But this will allow banks to cherry-pick
and focus on affluent residents of rural areas rather than the lower
income consumers CRA targets. This type of action would definitely be
detrimental to a state like New Mexico, where in rural areas there are
pockets of affluence and of great poverty. What is happening is that
families, with long historical ties to the land, are being pushed off
there land, because of more affluent people moving into the area and
raising property taxes to a level where people can not afford to live on
the land they grew up on. Finally, you would also eliminate publicly
available data on the small business lending of mid-sized banks. Without
data, community groups and citizens cannot hold banks accountable for
lending to small businesses in their neighborhoods.
Your changes directly oppose CRA?s mandate to require lenders to meet
community needs. CRA is too important to be gutted. Please drop your
proposal like the two other federal agencies that recognized its harm to
underserved communities.
Sincerely,
Fernando Bejar
8727 Stony Creek Rd. SW
Albuquerque, NM 87121