CENTER FOR ECONOMIC PROGRESS
From: Steven Neumann [mailto:SNeumann@centerforprogress.org]
Sent: Wednesday, September 15, 2004 12:43 PM
To: Comments
Subject: Withdraw Proposed Changes to CRA regulations
Please forward this message to:
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 would like to strongly urge you to withdraw the current proposed
changes to 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.
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.
After the proposed changes, mid-sized banks would be allowed 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.
You also propose that community development activities in rural areas
should benefit any group of individuals instead of only low- and
moderate-income individuals. This runs contrary to the fundamental
intent of CRA requirements - to ensure greater access to needed
financial services among chronically underserved consumers. 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. This data is absolutely crucial.
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,
Steve Neumann
Financial Education Associate
Americorps VISTA Volunteer
Center for Economic Progress
29 E. Madison Street, Suite 910
Chicago, Illinois 60602
