FDIC Federal Register Citations

Steuben Churchpeople Against Poverty

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429
Via email: comments@fdic.gov

RE: RIN 3064-AC50

Dear Mr. Feldman:

As the Housing Programs Coordinator for a not-for profit housing agency, I urge you to withdraw your proposed changes to the Community Reinvestment Act (CRA) regulations. CRA has been instrumental in increasing homeownership and economic development. Your proposed changes are contrary to the CRA because they will slow down the progress made in community reinvestment.

I understand that CRA exams look at the number of loans, investments, and services that banks with more than $250 million in assets make to low- and moderate-income communities. Your proposal will eliminate the investment and service parts of the CRA exam for banks with assets between $250 million and $1 billion.

To replace the investment and service parts of the CRA exam, the FDIC proposes to add an inadequate community development criterion. 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. The end result will be significantly fewer loans and investments in affordable rental housing, health clinics, community centers, and economic development projects.

The elimination of the service test will also have harmful consequences for low- and moderate-income communities. CRA examiners will no longer expect mid-size banks to place bank branches in low- and moderate-income communities. Mid-size banks will no longer make efforts to provide affordable checking and savings accounts to consumers with modest incomes. In addition, your proposal eliminates small business lending data reporting for mid-size banks. Without data on lending to small businesses, the public cannot hold mid-size banks accountable for responding to the credit needs of small businesses.

You propose that community development activities in rural areas can benefit any group of individuals instead of only low- and moderate-income individuals. Since a large number of rural residents are rich, your proposal threatens to divert community development activities away from the low- and moderate-income communities and consumers that is the focus of CRA.

In conclusion, your proposal is directly the opposite of CRA’s mandate of imposing an obligation to meet community needs. Two other federal agencies did not embark upon the path you are taking because they recognized the harm it would cause. CRA is too vital to be gutted by regulators. If you do not reverse your proposed course of action, I will ask that Congress halt your efforts before the damage is done.

Sincerely,

Virginia Bates
Housing Programs Coordinator