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FDIC Federal Register Citations
From: RRJCoates@aol.com [mailto:RRJCoates@aol.com]
Sent: Wednesday, October 20, 2004 9:57 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
FDIC folks
In my career as a consultant to public purpose organizations I have found the
CRA to be a useful---occasionally powerful---incentive to community-beneficial
behavior by lending institutions. Please don't remove this desirable incentive
from our policy toolbox.
During the late 1980's I consulted with Signet Bank on a project to build a
stronger mortgage feeder chain of CDC partners in Baltimore and DC. I produced
a series of radio programs for prospective first-time homebuyers on African-American-owned
radio stations, using a mix of housing and credit experts and of community
organizational reps as on-air resources. The programs created measurably increased
traffic at the housing counseling desks of participating/approved community
agencies in the two cities, and the Signet loan originators were able to play
useful support and counseling roles with these prospective customers. After
the six-to-ten week program was over the loan origination parterships continued,
leading to increases in Signet's share of the low- to mod-income portion of
the first-time minority homebuyers' market.
I am convinced none of this would have happened without the spur of CRA. The
requirements of the act motivated the bank to select an excellent CRA officer,
to try out new techniques for building good business relationships with new
customers (e,g., above), and to gradually view these initiatives as an integral
part of the lending business. Isn't this market-wide focus on serving customers
what we all want from our institutional lenders? I'm sure that the extensive
CRA reviews can be rendered more efficient in months ahead---looking at evidence
of results as much as effort, for instance---but the "encouragement" to
economy-building lending needs to continue.
Please don't remove this incentive to behavior that benefits all of us.
Roger Coates
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