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FDIC Federal Register Citations
Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, D.C. 20429
Re: RIN 3064-AC95
Dear Mr. Feldman:
I join the National Community Reinvestment Coalition in urging you to drop
your proposal to preempt certain state laws in connection with the lending
and deposit activities of state-chartered banks. I believe the proposal
would strip Pennsylvania of its power to enforce and enact meaningful
consumer protections for our citizens.
As we understand it, the proposal would allow FDIC-chartered banks to skirt
strong consumer protection laws in states in which they make loans and
follow weaker laws of the state in which they are headquartered. If the FDIC
enacts this proposal, state-chartered banks will be tempted to place their
headquarters in states with weak laws and then "export" these laws to other
states in which they make loans. The end result would be a regulatory race
to the bottom and the stripping away of states rights, leaving consumers
without strong protections against predatory lenders.
One strong consumer protection that is in place and, I think, unique to
Pennsylvania, is the Homeowners Emergency Mortgage Assistance Program.
HEMAP requires lenders to provide written notice to a delinquent borrower
that they may be eligible for a special loan to avoid foreclosure. This
notice also forestalls the foreclosure process to allow for application to
the program. It would be unfortunate if such a program were rendered
meaningless by the FDIC pre-emption.
Another area of special concern is predatory lending. As you may know, a
recent Federal Reserve study of the new 2004 HMDA data confirmed two reports
by NCRC that found that minorities continue to pay more for loans as they
are more likely to receive high cost loans than their white counterparts.
The data indicate that such practices vary from state to state. It is,
therefore, imperative that states have the authority to clamp down on
predatory practices.
Also, given that federal regulators have recently chipped away at important
consumer protections, now is not the time to negate special protections
offered by states.
I strongly urge you to drop your proposal and to remind state-chartered
banks that they have a moral and civic responsibility to respect the will
and the rights of the states to protect its citizens. Thank you for your
consideration of my comments.
Sincerely,
Alan L. Jennings
Executive Director
Community Action Committee of the Lehigh Valley
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