Federal Deposit
Insurance Corporation

Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, D.C. 20429

Via e-mail: comments@fdic.gov

Re: RIN 3064-AC95

Dear Mr. Feldman:

As co-convenors of the Greater Rochester Community Reinvestment Coalition (GRCRC), we urge you to drop your proposal to preempt certain state laws in connection with the lending and deposit activities of state-chartered banks. Your proposal would strip states of their power to enforce and enact meaningful consumer protections for its citizens.

GRCRC was convened in 1993 to generate discussion about lending patterns in Rochester. GRCRC has a membership of over 30 locally based not-for profit organizations and individuals. Using raw data made available through the Home Mortgage Disclosure Act (HMDA), the Coalition has released seven separate analyses of home mortgage, small business and subprime lending data for the Rochester area. We have used the analyses to identify strengths and weaknesses in lending patterns and to generate ongoing discussion with the banks in question. The Coalition also submits comments, based on this data, to the appropriate State and Federal regulators who have oversight of the banks. In January 2006 we will release our latest analysis of the most recent HMDA data available, which will look at the penetration of high cost loans in the Rochester, NY MSA in 2004.

The implications of your request are profound. Your proposal would allow FDIC-chartered banks to skirt strong consumer protection laws in states in which they do business 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.

Your proposed rule would have an especially egregious impact on consumers in New York State, which has one of the strongest anti-predatory lending laws in the country.

Our soon to be published analysis of the 2004 HMDA data finds that African-Americans and Hispanics in the Rochester, NY MSA are:

• Twice as likely as non-Hispanic whites to be denied mortgage loans

• 2.25 times more likely to receive high cost loans than non-Hispanic whites

With these possibilities of price discrimination and steering, the new HMDA data suggests that predatory lending is a widespread problem and that states must have the authority to clamp down on predatory practices. However, if enacted, this proposal would take this authority and give it to the states with the weakest consumer protections.

In addition, in the last year federal regulators have been chipping away at important consumer protections. Now is not the time to weaken laws for state-chartered banks.

Ultimately, this proposal will further undermine the gains American communities and consumers have made in community development and wealth building.

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 their citizens.

Yours truly,

Ruhi Maker, Esq.
Barbara van Kerkhove, Ph.D.