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FDIC Federal Register Citations Otoe-Missouria Tribe September 23, 2004 Mr. Robert E. Feldman RE: RIN 3064-AC50 Dear Mr. Feldman, The Otoe-Missouria Tribe urges you to withdraw your proposed changes to the Community Reinvestment Act (CRA) regulation. The changes proposed for rural communities will disproportionately affect tribes and Native Americans living in tribal areas. To this point, Native Americans living on reservations are the most unbanked populations in the United States. The proposed changes would only serve to worsen banking services to tribes. These changes would make smaller banks less accountable for their community reinvestment activity. Indian country has made strides with the help of banks in the mortgage arena and, we believe, that the strength of the current law has been instrumental to this development. According to the GAO, the rate of homeownership for Native Americans living on reservation is just 33 percent, or half that of the general population and substantially lower that that of the other minority groups. In addition, Native Americans are four times more likely that the average American family to live in substandard housing. (Fannie Mae data, Testimony, Pattye Green, May 3, 2004, House Financial Services Committee). Overcrowding has been documented in the NAIHC study "Too Few Rooms..." (2001) reports as many as 25 or even 30 people living in deplorable conditions under one roof in a 2- or 3-bedroom house. In the Otoe-Missouria Tribe service area, we have reports of overcrowding in many homes as well as homelessness. These are major concerns of the tribe with little resources to address these concerns. There are waiting lists of families that are in desperate need of housing. Our community simply does not have an adequate number of rental units or other housing opportunities available. As the only enterprise in our area, the Otoe-Missouria Tribe strives to create job opportunities, however, housing is needed for those working families to reduce the commuting costs of employees. The Otoe-Missouria Tribe is in the developmental stages of addressing those needs and will require the service of local banking institutions to make this happen. With federal cutbacks in funding, Tribes, such as the Otoe-Missouria Tribe, are in the throws of seeking other means to secure funding to address the needs of its citizens. It is no accident that tribes are located in depressed, unmarketed areas; areas of little or no economic foundation, tax base, or strong governmental support from the respective states in which they reside. It is no accident that tribes are left to their own resources to build and sustain its communities. It is no accident that tribes recognized the barriers and deficiencies of its communities and set forth practices to remedy those situations. Realizing that the local banking institutions of its small communities, comprised of very low-to-moderate income families, are the first source of nearly all financial transactions that will take place and developing working relations with them to build and develop those lacking systems for strong residential and governmental foundations. It is those shall to mid-size banks that provide the many instruments of loans, and investments options available to tribes nationally. It is well known that smaller banks, those primarily regulated by the FDIC, are more likely to serve rural population, of these provisions are disturbing to populations such as ours, the Otoe-Missouria Tribe, who is entirely rural. With the current Administration seeking to expand minority homeownership, these measures will certainly not help and very likely halt the recent gains in homeownership that we have seen taking place on tribal lands. We believe the proposed changes will thwart the Administration's goal of creating 5.5 million new minority homeowners by the end of the decade. Under the current CRA regulation, 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 CFA exam for state-charted 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 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 the 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. All of which, are projects the Otoe-Missouria Tribe is currently engaged in. 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 effort to provide community development loans, investments, and services. The Otoe-Missouria Tribe is researching the opportunities available to tribes through banking institutions for home development and creates availability of affordable housing for tribal members. Working with local banks makes this possible. With the investment potential of the tribe, we can work with our local institution to make dreams come true for many disadvantaged families. Keeping those investments on a local level, will make is possible to our communities to grow and become prosperous. Taking that ability away from our local lender will deprive our communities of the economic growth that is derived from local investing. The service area of the Otoe-Missouria Tribe is already a severely depressed area. This community exists largely in part to the activities of the Otoe-Missouria Tribe and the efforts made to BUILD an economic base that will sustain the members, residents and families that have made this area their home. Local farming families (small businesses) are dependant upon local banking for their commerce and trade. In recognizing the local farming families (non-Indians) in the Otoe-Missouria Tribe service area we must identify that the Otoe-Missouria Tribe and its members own much of the land utilized in nearly all facets of their farming activities. Lastly, and perhaps most devastating to Native Americans living in tribal areas, you propose that community development activities in rural areas can benefit any group of individuals instead of only low-and moderate-income individuals. Since banks will be able to focus on affluent residents of rural areas, your proposal threatens to divert community development activities away from the low- and moderate-income communities and consumers that CRA targets. Your proposal for rural American merely exacerbates the harm of your proposed streamlined exam for mid-size banks. Your streamlined exam will result in much less community development activity. In rural American, that reduced amount of community development activity for low- and moderate-income rural residents are the crumbs of. a shrinking CRA pie of community development activity. In sum, your proposal is directly opposite CRA's statutory mandate of imposing a continuing and affirmative obligation to meet community needs. Your proposal will dramatically reduce community development lending, investing, and services. You compound the damage of your proposal in rural areas, which are least able to afford reductions in credit and capital. You also eliminate critical data on small business lending. If your agency is serious about CRA's continuing and affirmative obligation to meet credit needs, you would be proposing additional community development and data reporting requirements for more banks instead of reducing existing obligations. A mandate of affirmative and continuing obligations implies expanding and enlarging community reinvestment, not significantly reducing the level of community development. CRA is too vital to be gutted by regulatory fiat and neglect. We hope that the FDIC, which earlier this year had the vision to hold a conference on the "unbanked," will not now introduce changed detrimental to the most "unbanked" population of all. Sincerely, CC: National American Indian Housing Council (fax: 202-789-1758) National
Community Reinvestment Coalition (fax: 202-628-9800) President George W.
Bush (fax: 202-456-2461)
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| Last Updated 11/18/2004 | regs@fdic.gov | |