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CITY OF SANTA FE, NEW MEXICO
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:
On behalf of the City of Santa Fe, I strongly, urge you to withdraw
your recently proposed changes to the Community Reinvestment Act CRA
regulations. Nationwide, CRA has been instrumental in increasing
homeownership, boosting economic development, and expanding small
businesses in. the nation's minority, immigrant, and low- and
moderate-income communities. The proposed changes are contrary to the CRA statute and Congress' intent because they would reduce, or likely
halt, the progress made in community reinvestment.
Under the current CRA regulations, banks with assets of at least $250
million are rated by performance evaluations that scrutinize their level
of lending, investing, and services to low- and moderate-income
communities. The proposed changes will eliminate the investment and
service parts of the CRA exam for state-charted banks with assets
between $250 million and $1 billion. In place of the investment and
service parts of the CRA exam, the FDIC proposes to add a community
development criterion. The community development criterion would require
banks to offer community development loans, investments or services.
The community development criterion is seriously deficient because
mid-size banks with assets between $250 million and $1 billion would
only have to engage in one of three activities: community development
lending, investing or services. Currently, mid-size banks must engage in
all three activities. Under your proposal, a mid-size bank can now
choose a community development activity that is easiest for the bank
instead of providing an array of comprehensive community development
activities needed by low- and moderate-income communities.
The proposed community development criterion will result in
significantly fewer loans and
investments in affordable rental housing, Low-Income Housing Tax
Credits, community service facilities such as health clinics, and
economic development projects. It will be too easy for a mid-size bank to demonstrate compliance with a community development
criterion by spreading around a few grants or sponsoring a few
homeownership fairs rather than engaging in a comprehensive and
consistent effort to provide community development loans, investments,
and services.
The proposal would make 879 state-chartered banks with over $392
billion in assets eligible for the streamlined and cursory exam. In
total, 95.7 percent or more than 5,000 of the state-charted banks your
agency regulates have less than $1 billion in assets. These 5,000 banks
have combined assets of more than $754 billion. There are more than 60
banks in New Mexico that fall into this category.
Another negative element of the proposal is the elimination of the
small business lending data reporting requirement for mid-size banks.
Mid-size banks with assets between $250 million and $1 billion would no
longer be required to report small business lending by census tracts or
revenue size of the small business borrowers. Without data on lending to
small businesses, it is impossible for the public at large to hold the
mid-size banks accountable for responding to the credit needs of
minority-owned, women-owned, and other small businesses. Data disclosure
has been responsible for increasing access to credit precisely because
disclosure holds banks accountable. The proposal will decrease access to
credit for small businesses, which is directly contrary to CRA's goals.
In Santa Fe, the provision of community development services, such as
affordable housing, for the low- and moderate-income persons, minorities
and immigrants is of paramount importance. Without CRA's continuing and
affirmative obligation, our community development initiatives are in
jeopardy.
Sincerely,
Larry A. Delgado
Mayor
City of Santa Fe, New Mexico
200 Lincoln Avenue
Santa Fe, NM 87504
cc: Senator Pete V. Domenici
Senator Jeff Bingaman
Representative Tom Udall
National Community Reinvestment Coalition |
