FDIC Federal Register Citations

Kristy McLean
Post Office Box 13
Clay, AL 35048

October 13, 2004

Robert E. Feldman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

To Robert Feldman:

I am a child care advocate opposed to watering down CRA (Community Reinvestment Act) requirements for mid-sized banks. CRA is vital for economic development in lower-income communities, and investing in child care is a highly effective community development strategy. However, your proposed changes will halt the progress that has been made.

Under the proposals, the community investment requirements for banks with assets between $250 million and $1 billion will be greatly weakened. These banks would no longer be tested on the number of investments and services to low- and moderate-income communities. In addition, these banks would be allowed to choose which one development activity – among lending, investment, and services – they will undertake; today they must engage in all three. These watered down requirements will result in significantly fewer loans and investments in child care centers, family child care homes, and other economic development projects.

The proposal also would allow community development activities in rural areas to benefit any group of individuals instead of specifically low- and moderate-income individuals. But this will allow banks to cherry-pick and focus on affluent residents of rural areas rather than the lower-income consumers CRA targets.

Your changes directly conflict with CRA’s mandate to require lenders to meet a community’s needs for services such as child care, health clinics, and housing. CRA is too important to be gutted. Please withdraw your proposal like the two other federal agencies that recognized its harm to underserved communities.

Sincerely,
Kristy L McLean