MISSISSIPPI CENTER FOR JUSTICESeptember 23, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
The Mississippi Center for Justice, a nonprofit, public interest law
firm committed to pursuing strategies that combat discrimination and
poverty in Mississippi, is writing to express its concern over the
Federal Deposit Insurance Corporation (FDIC) proposed rule changes to
the Community Reinvestment Act (CRA). Changes in this policy will hurt
all Mississippians. The proposed policies threaten to stunt rural
development efforts and to increase rural predatory lending activity.
CRA is vital for increasing homeownership and economic development in
lower-income communities, and the proposed changes will`' halt the
progress that has been made. In Mississippi:
The proposed rule change will decrease the community investment
activity of 170 MS bank branches holding $4.7 billion in deposits;
130 of the ,170 branches affected by the rule change serve rural areas;
94% of MS rural banking institutions have less than $1 billion in assets
and would encounter significantly fewer CRA requirements under the
proposed rule changes.
The rule would allow mid-sized banks to choose which community
development activities they will undertake. Right now, these banks must
make community development loans, investments, and services. The
proposed test allows banks to choose only one of the three activities,
resulting in less community development activity.
The rule also proposes that community development activities in rural
areas should benefit any group of individuals, instead of the low- and
moderate-income individuals it was designed to serve. The devastating
effect of this is that banks will be allowed to focus on affluent
residents of rural areas instead of the lower income consumers that the
CRA was created to empower. Finally, the rule would 'also eliminate
publicly available data on the small business lending of mid-sized
banks. Without that data, citizens cannot hold banks accountable for
lending to small businesses in their neighborhoods.
Anyone who is committed to fighting poverty will oppose these
changes. Thank you for your consideration and support. The CRA is an
important tool that has been used effectively to combat poverty in our
state for several years.
Sincerely
Martha J. Bergmark, President
Fred L. Banks, Board Chair
Mississippi Center for Justice
Jackson, MS
