FDIC Federal Register Citations

Housing Authority of the City of Lamar, Colorado

From: JD Bennett [mailto:executivedirector@lamarhousing.org]
Sent: Monday, October 18, 2004 7:48 PM
To: Comments
Cc: cra@nahro.org
Subject: "RIN 3064-AC50"

The Housing Authority of the City of Lamar, Colorado wishes to provide comment on the proposed rule changes.
As a provider of housing, and therefore, an advocate for elderly, disabled and working poor populations in a multi-county area - it is our position that the proposed new rule would have a significant impact on the people we serve.
Over 70% of our area housing stock is pre-1940s and these homes are predominately inhabited by lower-income families. Our future ability to rehab and stabilize the homes here is seriously compromised by the proposed rule changes. CRA creates partnerships. Its elimination, as a motivator, takes community service back to the days of begging hat-in-hand. I don't wish to move backwards to the days when investment in unmarketable areas or projects was non-existent. Redlining has not disappeared - it has simply become covert and more sophisticated.
As the Executive Director for various low-income housing organizations and/or nonprofit community agencies - I have found compliance to the CRA requirements a serious encouragement tool to get buy-in for projects that have public merit but minimal "profitability" incentives for banks. The difference between the before/after mention of CRA, in seeking of partnerships, is night-to-day. I would encourage the FDIC to reconsider its weakening of this valuable tool used by those of us who serve the public interests.
As regards the changing of the dollar amounts; in our rural area, to raise the asset threshold from $250 million to $1 billion of financial institutions that have to undergo the comprehensive CRA examination, would eliminate every bank in a six county area from the requirement. This, combined with allowing banks to "balance their community lending investing and service activities based on opportunities in the market and the banks own strategic strengths", would make the CRA non-existent in the worst case scenario, or available upon the whim or interests of the moment in the best case scenario. While the higher limits and squishy commitment criteria will make your compliance issues simpler - it will compromise the commitment to those most needy in our communities. We agree with most of the housing and community investment professionals in requesting these changes be abandoned.
JD Bennett, Executive Director