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FDIC Federal Register Citations


Unidos Para La Gente

From: Mary Compton
To: Comments
Subject: CRA - Strengthen It

August 26, 2004

Mr. Robert E. Feldman, Executive Secretary
Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St., NW
Washington, DC 20429

Dear Mr. Feldman:

Unidos Para La Gente, a member of the National Community Reinvestment Coalition, urges you to not make your proposed changes to the Community Reinvestment Act (CRA) regulations. Since CRA has been largely responsible for increasing home ownership, boosting economic development, and expanding small businesses in the nations low-and moderate-income, minority, and immigrant communities, you need to strengthen it instead of watering it down.

Your proposed changes are contrary to the CRA statute and Congress' intent, because they will slow down, if not halt, the progress we have made in recent years in community reinvestment. President Bush's own appointee, FDIC Chairman Powell, is proposing the changes which would greatly diminish banks' obligation to reinvest in their communities. These proposed changes would eliminate the investment and service parts of the CRA exam for state-chartered banks with assets between $250 million and $1 billion and replace them with a community development criterion requiring banks to offer community development loans, investments or services. An array of comprehensive community development activities including loans, investments, and services are needed by our communities, but with the proposed changes would no longer be available.

Your proposal would drastically reduce by hundreds of billions of dollars in more than 5,000 banks assets available for community development. Mid-size banks would no longer make sustained efforts to provide affordable banking services and savings and checking accounts to citizens with modest incomes or to build and maintain branch banks in those communities.

Reporting small business lending by census tracts or revenue size of small business borrowers would no longer be required, making it impossible for the public to hold mid-size banks accountable for making capital and banking available to these communities.

Your streamlined exam would result in much less community development activity. And banks could then earn CRA points if they benefit affluent consumers and communities. Rural areas which are least able to afford reductions in credit and capital will be hurt the most. Both the Federal Reserve Board and the Office of the Comptroller of the Currency recognized the harm it would cause to take similar action.

A mandate of affirmative and continuing obligations implies expanding and enlarging community reinvestment, not reducing the level of community reinvestment. If you are serious about an obligation to meet credit needs, you will propose additional community development and data reporting requirements for more banks instead of reducing existing obligations. Reverse your proposed course of action or we will ask that Congress stop your efforts.

Sincerely yours,

Mary Compton, president
Unidos Para La Gente

 

 


 

 

Last Updated 08/31/2004 regs@fdic.gov

Last Updated: August 4, 2024