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FDIC Federal Register Citations
Massachusetts
Association of Community Development Corporation
October
19, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
On behalf of the Massachusetts Association of Community Development Corporations,
the trade association for over 70 community development corporations across
Massachusetts, I am writing to oppose watering down CRA (Community Reinvestment
Act) requirements for mid-sized banks. CRA is vital for increasing homeownership
and economic development in lower-income communities. However, your proposed
changes will halt the progress that has been made.
We understand that banks with over $250 million in assets must be tested
on their number of loans, investments, and services to low- and moderate-income
communities. But your proposal would eliminate the investment and service
requirements for all banks with under $1 billion in assets. This will result
in significantly fewer loans and investments in affordable rental housing,
health clinics, community centers, and economic development projects.
In the watered-down exam, you 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. Your proposed
test allows banks to choose only one of the three activities. The result
will be less community development activity.
You also propose that community development activities in rural areas
should benefit any group of individuals instead of only low- and moderate-income
individuals. But this will allow banks to cherry-pick and focus on affluent
residents of rural areas rather than the lower income consumers CRA targets.
Finally, you would also eliminate publicly available data on the small business
lending of mid-sized banks. Without data, community groups and citizens
cannot hold banks accountable for lending to small businesses in their neighborhoods.
Your changes directly oppose CRA’s mandate to require lenders to meet
community needs. CRA is too important to be gutted. Please drop your proposal
like the two other federal agencies that recognized its harm to underserved
communities.
Sincerely,
Maureen Flynn, Esq.
Deputy Director
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