IndependenceFirst
From: Denise Johnson [mailto:dj
Sent: Friday, September 17, 2004 2:46 PM
To: Comments
Subject: Bank Issues
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St., NW
Washington, DC 20429
September 17, 2004
RE: RIN 3064-AC50
Dear Mr. Feldman:
As a concerned citizen of Wisconsin, I am requesting that the FDIC
withdraw
its proposal to change the Community Reinvestment Act regulations
for
mid-sized banks. The FDIC proposal will especially harm the more
rural
parts of the United States, where there are already fewer banks that
are
covered by the "large bank" regulations of CRA.
The difference between
how "small" banks and "large" banks
are currently
reviewed for CRA purposes is that the large banks have a service
test and
investment test in addition to a lending test. The investment test
is an
important tool for increasing the amount of affordable housing and
community
development investments in our communities because the banks that
are
subject to the large bank test feel more need to work harder to support
affordable housing and make the kinds of investments that help low
and
moderate income people.
Currently in Wisconsin there are approximately 310 financial institutions
covered by CRA. With the current $250 million threshold, 64 institutions
are
considered large banks while the other 246 are small banks. The Office
of
Thrift Supervision (OTS) recent decision to raise the threshold for
thrifts
to $1 billion removed four of the 64 institutions from the large
bank test,
but if the FDIC follows suit another 27 institutions would be shifted
from
the large bank to the small bank category and there would be just
33 "large
banks" left in Wisconsin. Some rural counties would either no
longer have
any offices of a "large bank" located within them or would
be reduced to
having just one large bank.
The proposal by the FDIC to allow banks between $250 million and
$1 billion
in assets to pick and choose which types of activities they do to
meet a new
community development test will prove to provide little value to
the
intended beneficiaries of the Community Reinvestment Act, the low
and
moderate income people of our communities. In rural areas this is
particularly true because the FDIC's proposes that "'community
development'
activity could benefit either low- and moderate-income individuals
or
individuals who reside in rural areas." Creating such a broad
definition of
community development, which could easily be interpreted to mean
that
loaning
money to a Wal-Mart store opened in a rural area is "community
development,"
will make the Community Reinvestment Act virtually meaningless in
rural
communities.
I urge the FDIC to listen to the voices of National Community Reinvestment
Coalition members and withdraw this proposal and then begin to more
rigorously enforce the Community Reinvestment Act in rural areas.
Too many
of the mid-sized banks, which are so important for our rural economy,
are
getting by with doing very little community development service and
investment in our communities. We need you to do a better job enforcing
the
Community Reinvestment Act.
Sincerely,
Denise Johnson
Project Coordinator AODA Services for
Deaf, Deaf-Blind and Hard of Hearing
IndependenceFirst
600 West Virginia Street
Milwaukee, WI
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