| UNITED STATES SENATE
July 16, 2004
Office of the Comptroller of the Currency
250 E St. SW,
Washington 20219
Jennifer J. Johnson, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, D.C. 20551
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th St NW
Washington, D.C. 20429
Chief Counsel's Office
Office of Thrift Supervision
1700 G Street NW
Washington, D.C. 20552
Dear Officials of Federal Bank and Thrift Regulatory Agencies:
We join a number of our colleagues in writing to express our
opposition to the recently published interagency proposal revising the
Community Reinvestment Act (CRA) regulations. We are concerned that the
proposal will weaken the effectiveness of CRA which has been so critical
in encouraging financial institutions to meet the credit needs of under
served communities across Wisconsin.
A number of our constituents have raised serious concerns regarding
the proposed changes. They are concerned that the proposal does not
adequately address the problem of predatory lending. While they believe
some of the enhanced data disclosure provisions are a step in the right
direction, such as the proposal to publicly report the specific census
tract location of small businesses receiving loans, they note that the
proposed changes fail to close loopholes in the CRA regulation. In this
regard, they cite, in particular, the ability of institutions to include
affiliates on CRA exams at their option, thus permitting manipulation of
CRA exams through the exclusion of affiliates that are not serving low
and moderate income borrowers, and the exclusion of affiliates engaged
in predatory lending.
Our constituents have also voiced concerns about the proposed changes
to the small bank threshold, and while some adjustment may make sense,
they believe the proposed $500 million standard is too high.
CRA has been a vital tool in providing under served communities
access to critical financial services. The revisions made to CRA in 1995
were an improvement on the original law in many respects. As some of our
colleagues have noted, those revisions emphasized performance over
process, adopted a comprehensive examination of a bank's lending,
investment and service activities, and addressed the regulatory burdens
of the smallest institutions. Unfortunately, the current proposal risks
weakening the effectiveness of CRA by reducing the obligation of
institutions to invest in under served communities. Because of that, we
urge you to withdraw the proposed changes.
Sincerely,
Herb Kohl
United States Senator
Russell D. Feingold
United States Senator |
