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FDIC Federal Register Citations


National Council on Agricultural Life and Labor Research Fund

September 16, 2004

Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Dear Mr. Feldman:

RE: “RIN 3064-AC50”

On behalf of the National Council on Agricultural Life and Labor Research Fund, Inc. (NCALL), I am pleased to comment on the proposed changes to the Community Reinvestment Act statute being considered by the FDIC. NCALL is a regional nonprofit organization based in Dover, Delaware that works to assure lower income households have access to affordable apartments and to homeownership opportunities.

Our development work is responsible for 37 apartment communities with another 11 communities under construction or with funds obligated. During 2004, NCALL’s homeownership counseling program reached its 5,000th closing, having leveraged nearly $500 million in attractive CRA mortgages and down payment and settlement help. NCALL’s rural loan fund has done substantial lending to nonprofit housing developers and is currently in the planning stages of becoming a CDFI to better serve our nonprofit and household customers. A majority of this work has been done in rural areas serving households of modest means, often minority and female-headed households, who simply would not have accessed decent, affordable housing any other way. Virtually all of this work has been supported by CRA activities, some by the same banks that would be exempted by the proposed rule.

1. CRA has been so instrumental in Delaware by involving the private sector in housing and community development, an industry previously solely left to government. The emphasis on homeownership has had a dramatic economic impact that is right now being studied by the Delaware Housing Coalition through the Economics Department of the University of Delaware. Any weakening of this law will negatively impact the public, which is already reeling from a lack of consumer protection and predatory lending.

2. This Administration has undertaken an ambitious goal of elevating homeownership, particularly to minority households, by the end of the decade. Enacting this CRA change in Delaware puts the goal of improving minority homeownership in our rural areas which is where the preponderance of banks are that will be exempted or streamlined at great risk.

3. Delaware’s rural areas, which traditionally have not enjoyed the housing and community development resources of urban America, would be hard hit by the proposed CRA changes. A listing of the banks that would be streamlined with cursory exams due to increased asset size thresholds reads like a “Who’s Who” of Delaware’s rural banks. Any change in offering attractive mortgages, underwriting criteria, support of homeownership counseling, and investment in affordable housing will upset the delicate balance that is now starting to make headway in addressing local housing needs.

4. It is clear from the past twenty years of active CRA history in Delaware that any lessening, streamlining, or relaxation of CRA and the examination process which now holds financial institutions accountable through evaluation of their lending, investing, and services to low and moderate income communities, would have dire results. Corporate goodwill is simply not sufficient to address the deeply rooted and expensive issues of decent housing and community development. All resources currently available are needed. We simply cannot afford to take major steps backward.

5. At a time when the federal government is divesting itself of the urban and rural housing programs of the past, as we see programs gutted and budgets reduced, low and moderate income people and communities cannot take the double hit of lessened CRA responsibilities. Affordable housing is far too complicated to develop, difficult to preserve, and expensive to finance to leave to the chance of a relaxed CRA program.

6. The same banks in Delaware that would benefit from the rule changes and streamlining are currently involved in special mortgages, Latino workforce financial literacy programs, homeownership counseling, and many more creative initiatives that are helping to address the many needs that exist. Some invest in Low Income Housing Tax Credits, which are such a necessary part of the apartment development that we do, serving families, elderly, and farmworkers who cannot yet afford homeownership. These smaller institutions are important to our CRA mix in Delaware.

7. What possible positive impact can come from removing the investment and service tests for almost half of Delaware’s financial institutions? The result could only be a lessening of affordable credit, capital and banking services to the rural, already underserved communities. How can we to be sure the exempt institutions would continue offering branches, checking accounts, Individual Development Accounts, or debit card services—the exact access to capital and wealth building tools that are needed?

8. Finally, at a time when predatory lending and consumer debt threatens the very fiber of our nation, why would we further de-regulate some of the very institutions that that are preying on the very people and communities that need access to quality credit? Changing CRA at this time leaves far too much to chance when we cannot afford the loss of any credit, investments, services, or mortgages.

The wonderful housing and community development gains leveraged by CRA cannot be risked or weakened at the expense of decent, affordable housing and banking services for the retired who have contributed so much to our country, our modest income families who provide so many necessary services to our communities, our workforce who often have difficulty securing affordable housing, and farmworkers who put the food on our table.

Thank you for your consideration.

Sincerely,

Joe L. Myer
Executive Director

 

Last Updated 09/17/2004 regs@fdic.gov

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