Federal Deposit
Insurance Corporation

From: Nadia Villagran [mailto:nvillagran@cvhc.org]
Sent: Monday, October 18, 2004 12:02 PM
To: Comments
Subject: Oppose Efforts to Weaken CRA RIN number 3064-AC50

Nadia Villagran
45701 Monroe Street, Suite G
Indio, CA 92201

October 18, 2004

Federal Deposit Insurance Commission
,

Dear Federal Deposit Insurance Commission:

September 18, 2004

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

Re: The FDIC’s proposed change to the Community Reinvestment Act’s
definition of a “small bank.”

Dear Sir:

As a concerned citizen and as an employee of the Coachella Valley Housing
Coalition (CVHC), I am writing to express my adamant opposition of any
changes to the Community Reinvestment Act. Situated in Southern
California, about 100 miles east of Los Angeles, the Coachella Valley is
in a unique community known for its high-end luxury homes and vacation
resorts in Palm Springs and Indian Wells. Little known is the fact that
the Valley is primarily rural, and economically sustained by low-wage
service and agriculture industry jobs.
The Coachella Valley Housing Coalition has committed 22 years to helping
low income people improve their living conditions through advocacy,
research, and the construction and operation of housing and community
development projects. These efforts have meant the construction of more
than 2,500 single family homes and apartment units for farmworkers,
migrant farmworkers, seniors, and individuals with special needs, HIV/Aids
and other chronic illnesses.
The Community Reinvestment Act is a critical component to CVHC’s
affordable housing and community development efforts. According to
Community Development Digest, the FDIC shortly will consider adopting the
Office of Thrift Supervision (OTS) revision to the threshold for small
institutions using streamlined evaluations to $1 billion in assets. An
increase to the threshold of what is considered to be a small bank would
devastate an already difficult working relationship between low-income
housing builders like ourselves and small banks, especially in rural
communities where we have found the need is greatest. According to the
National Community Reinvestment Coalition, changing of the “small bank”
definition will allow 2,000 insured institutions with total assets of
almost $1 trillion and branches in more than 18,800 communities (96% of
all FDIC-regulated banks) to receive a less stringent CRA exam. Because
institutions with assets of $250 million to $1 billion comprise
substantial market share in rural areas such as ours, a change will mean
rural communities will have less access to institutions required to offer
services and investments that benefit low and moderate income communities.
The private market without regulatory incentives would not reach many
rural and impoverished areas. In essence, the proposed FDIC rule would
exempt many of our community’s critical partners from the effective and
productive requirements currently in place. CRA has been a vital aspect
of reinvestment in disenfranchised communities and should be held at a
high standard of reporting due to historical discriminatory lending
practices which lead to blight and disinvestment in low-income
communities. Small banks have always been an integral part of the
communities they serve—they are more familiar with their surroundings and
clientele, and their banking needs—CRA forces all banks to get out and
serve the neighborhoods in which they operate. When banks infuse their
services into a community that community thrives, businesses thrive,
people purchase homes, etc. To reduce CRA’s mandate for “small” banks will
cause banks to focus on easy and more profitable avenues of business
rather than working towards a broader lending portfolio. Because
government subsidies for housing are shrinking, now is not the time to
decrease regulations for private capital to leverage scarce subsidy
dollars. . CVHC has benefited greatly from CRA’s mandate on both large
and small banks, through various loans and grants over the years.
Communities will lose with less stringent CRA standards. I urge FDIC not
to move forward with the OTS proposed rule.
I appreciate the opportunity to share with you my impressions on any
changes proposed for the Community Reinvestment Act as it serves as a
great tool for all our housing and community building efforts. Thank you
for your consideration of my comments.

Sincerely,

Nadia Villagran
Special Projects Manager
Coachella Valley Housing Coalition
__________________________________________________

Sincerely,

Nadia Villagran