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FDIC Federal Register Citations
Jewish
Community Action
From:
Vic Rosenthal [mailto:vic@jewishcommunityaction.org]
Sent: Monday, October 18, 2004 10:07 AM
To: Comments
Subject: CRA Regulations
From: Vic Rosenthal
Sent: Monday, October 18, 2004 at 9:00 am
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
To whom it may concern:
Jewish Community
Action (JCA), a nonprofit organization in Minnesota, is writing to
oppose the proposed
rule changes by the Office of Thrift Supervision (OTS) and the Federal
Deposit Insurance Corporation
(FDIC) to offer “streamlined” testing under the Community
Reinvestment Act (CRA), to institutions up to $1 billion in assets,
because they will harm affordable housing and community and economic
development
in LMI communities. For five years, JCA has been working with small community
based banks committed
to economic development in urban areas. These banks meet the CRA threshold
for small banks and we
do not want to relax standards for similar sized banks.
CRA was enacted
to encourage federally insured financial institutions to meet the credit
needs of their
communities, including [low and moderate-income) persons. Communities
and nonprofit corporations
partner with banks to leverage limited federal subsidies with private
capital for meeting communities’ needs.” The proposed
rule would raise the small bank threshold from $250 million to $1 billion,
which could significantly
reduce investments in low and moderate income communities. This action
would eliminate 750 billion in Bank
assets and nearly 90% of banks from CRA responsibility. A small bank
threshold change from the FDIC
would mean approximately 2,000 FDIC-insured institutions would have to
meet a much less rigorous CRA standard that does not require investments
and services in low and moderate income areas.” In Minnesota, it
is anticipated
that the 36 Minnesota banks currently under the CRA requirements would
be reduced to just four banks,
thereby potentially reducing the community reinvestment taking place.
This action at the same time resources at state and federal level are
shrinking or disappearing fails to understand the
current budget realities in most states and local communities. The concepts
and values that created CRA are being aborted.
Jewish Community Action, and its more than 600 members, are committed
to economic development and housing rehabilitation in inner city
communities. The current CRA threshold is critical to hold banks in the
$250 million to $1 billion range more accountable to their communities.
Those banks meeting the threshold are providing important investments
to inner city
communities and should not have the accountability requirements reduced.
This is the wrong time and the wrong action.
Please rethink this action and do not raise the threshold. Thank you.
Vic Rosenthal
Executive Director
Jewish Community Action
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