Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ISS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429-9990
Re: RIN 3064-AC50
Gentlemen:
I am writing to oppose weakening current guidelines relating to the
Community Reinvestment Act. Just yesterday I met with my bank pursuant
to my request for a loan to purchase a 25-year old Section 8 housing
development for the elderly. The project is located in a low-income area
in the south suburbs of Chicago, and therefore the loan is one which
banks would not look on particularly favorably. I had initiated the
contact with my loan officer, but she referred me to the bank’s
Community Reinvestment person. The meeting with the CRA person had a
totally different feel than a similar meeting would have had with the
commercial or real estate lending people at the bank. For the latter,
this loan would have been an annoyance. They would have dealt with it
only if they believed it was necessary to keep a long-time client. For
the CRA people, on the other hand, this is a desirable loan which
immediately grabbed their attention. They were not only interested and
responsive, but they understood the intricacies of Section 8 contract
renewals, tax-exempt bonds for affordable housing and other
assisted-housing esoterica that the commercial and real estate lending
officers in the bank are totally unaware of.
In recent years banks have prospered despite – or perhaps to some
extent because of – current CRA regulations. If the paperwork or the
program regulations can be streamlined without negatively effecting the
program goals, that would surely be desirable, but to let even a single
bank ignore its responsibility to its community would detract from the
program goals without any corresponding commensurate benefit.
I did my first Low Income Housing Tax Credit deal just after the law
was passed in 1986 and I did my most recent one this summer. I can
assure you that the Community Reinvestment Act has been a major factor
in the success of that program. Weakening CRA would be a mistake. Just
as the well-intentioned crack-down on real estate tax losses in the Tax
Reform Act of 1986 contributed in no small measure to the savings and
loan debacle of the subsequent years (which cost the Federal government
far more than any tax breaks for building owners), weakening the
Community Reinvestment Act will undoubtedly have unintended consequences
which negatively impact our communities to a far greater extent than the
cost of banks filling out a few more forms.
