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September 24, 2004
Mr. Robert E. Feldman
Executive Secretary
Attn: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
I am a concerned citizen and a CEO of a non-profit public benefit
corporation; opposed to watering down CRA (Community
Reinvestment Act) requirements for mid-sized banks, CRA is vital for
increasing homeownership and economic development in lower income
communities: Your proposed changes will halt the progress that has been
made.
I understand that banks with over $250 million in assets must be tested
on their number of loans, investments, and services to low and moderate
income communities. But your proposal would eliminate the investment and
service requirements for all banks with under $1 billion in assets. This
will result in significantly fewer loans and investments in affordable
rental housing, health clinics, community centers, and economical
development projects.
Native Americans living on reservations are the most unbanked population
in the United States. The Navajo Nation, for example, has 5 bank
branches in total for a population of a quarter of a million people
living in an area the size of West Virginia. You can see the same or
greater number of branches in a single block in our Nation's Capital.
The
proposed changes would only serve to worsen banking services to tribes.
The proposed changes, which would make smaller banks less accountable
for their community reinvestment activity, alarm us, as banks are
finally waking up to the investment opportunities in Indian Country.
Indian Country has made strides with the help of banks in the mortgage
arena - we saw conventional mortgage activity increase for Native
Americans in 2003. We believe that the strength of the current law has
been instrumental to this development.
The following data point up the severe continuing needs in Indian
Country, which require a strong CRA. According to the GAO, the rate of
homeownership for Native Americans living on reservations is just 33
percent, or half that of the general population and substantially lower
than that of other minority groups. In addition, Native Americans are
four times more likely than the average American family to live in
substandard housing. Overcrowding has been documented in the NAIHC study
"Too Few Rooms" (2001) reporting as many as 25 or even 30 people living
in deplorable conditions under one roof in a 2 or 3 bedroom house.
If the watered-down exam was approved, it would allow mid-sized banks
to choose which community development activities they will undertake.
Right now, these banks must make community development loans,
investments, and services. Your proposed test allows banks to choose
only one of the three activities. The result will be less community
development activity. The recent strides in economic development in
Indian country will be lost if banks aren't required to invest.
You also propose that community development activities in rural areas
should benefit any group of individuals instead of only low and moderate
income individuals. But this will allow banks to cherry pick and focus
on affluent residents of rural areas rather than the lover income
consumers CRA targets. Finally, you would also eliminate publicly
available data on the small business lending of mid-sized banks. Without
data, community groups and citizens cannot hold banks accountable for
lending to small businesses in their communities.
Your proposed changes directly oppose CRA's mandate to require
lenders to meet community needs. CRA is too important to be gutted.
Please withdrawal you proposal, as did two other federal agencies – the
Office of Thrifts Supervision and the Office of the Comptroller of the
Currency – that recognized the harm of similar changes to undeserved
communities.
Sincerely,
Missionaries Habitats
Carlsbad, CA
CC: National American Indian Housing Council
National Community Reinvestment Coalition
President George W. Bush
Senators John Kerry & John Edwards |
