NATIONAL COUNCIL OF LA RAZA
September 8, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
RE: RIN #3064–AC50
Dear Mr. Feldman:
On behalf of the National Council of La Raza (NCLR) please accept
these comments on the proposed changes to the Community Reinvestment Act
(CRA). NCLR is the largest national constituency-based Hispanic
organization in the U.S. dedicated to improving life opportunities for
the nation's 38.8 million Hispanics. A private nonprofit organization,
NCLR works through a network of more than 300 community-based affiliates
in all regions of the country. Strong CRA regulations are essential to
increasing access, to homeownership, boosting economic development, and
expanding small businesses in Latino and immigrant communities. However,
the proposed changes jeopardize these local investments made by small
and midsized financial institutions.
The proposed changes virtually eliminate the investment portion of
the CRA exam for state banks and thrifts with assets between $250 million and $1 billion,
adding a community development criterion in its place. Under this rule,
banks and thrifts would be required to participate in either community
development, lending, or service rather than all three, as is currently
required. As a result, banks and thrifts will not be held accountable
for their participation in community development and small business
lending investments, such as Individual Development Accounts (IDAs),
small business loans, affordable housing development capital, and
Low-Income Housing Tax Credits (LIHTC), which are critical to Hispanic
communities and organizations.
In addition, the removal of the service portion of the CRA exam is
particularly detrimental to Hispanics. Without the service test,
midsized banks will have no inherent interest in providing key
elements of affordable banking services that are critical to Latinos,
approximately 35% of whom are unbanked, and which are otherwise
monitored by the FDIC, such as the provision and location of bank
branches; affordable financial products such as no-fee checking and
savings accounts; and low-cost remittance services.
CRA is a powerful tool for ensuring immigrant and Latinos' access to
critical financial services and capital investments. Changes to the
regulations must be made in the spirit in which the law was created and
further facilitate community development activities. Thank you for your
attention to this matter.
Sincerely,
Raul Yzaguirre
President/CEO
cc: Treasury Secretary John W. Snow
