From: Jordan.KauffmanBiber
Sent: Thursday, September 09, 2004 5:21 PM
To: Comments
Cc: president@whitehouse.gov
Subject: RIN number 3064-AC50
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
As a concerned citizen, I urge you to withdraw your proposed changes
to the
Community Reinvestment Act (CRA) regulations. CRA has been instrumental
in
increasing homeownership and economic development. Your proposed
changes
are contrary to the CRA because they will slow down the progress
made in
community reinvestment.
I understand that CRA exams look at the number of loans, investments,
and
services that banks with more than $250 million in assets make to
low- and
moderate-income communities. Your proposal will eliminate the investment
and service parts of the CRA exam for banks with assets between $250
million and $1 billion.
To replace the investment and service parts of the CRA exam, the
FDIC
proposes to add an inadequate community development criterion. 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. I believe that the end result will be significantly fewer
loans and investments in affordable rental housing, health clinics,
community centers, and economic development projects.
The elimination of the service test will also have harmful consequences
for
low- and moderate-income communities. CRA examiners will no longer
expect
mid-size banks to place bank branches in low- and moderate-income
communities. Mid-size banks will no longer make efforts to provide
affordable checking and savings accounts to consumers with modest
incomes.
In addition, your proposal eliminates small business lending data
reporting
for mid-size banks. Without data on lending to small businesses,
the
public cannot hold mid-size banks accountable for responding to the
credit
needs of small businesses.
You propose that community development activities in rural areas
can
benefit any group of individuals instead of only low- and moderate-income
individuals. Since a large number of rural residents are rich, your
proposal threatens to divert community development activities away
from the
low- and moderate-income communities and consumers that is the focus
of
CRA.
In conclusion, your proposal is directly the opposite of CRA's mandate
of
imposing an obligation to meet community needs. Two other federal
agencies
did not embark upon the path you are taking because they recognized
the
harm it would cause. CRA is too vital to be gutted by regulators.
If you
do not reverse your proposed course of action, I will ask that Congress
halt your efforts before the damage is done.
Sincerely,
Jordan Kauffman Biber
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