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Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429
RE: RN 3064-AC50
Dear Mr. Feldman:
I am a concerned citizen or community organization opposed to
watering down the Community Reinvestment Act (CRA) requirements for
mid-sized banks. CRA is vital for increasing homeownership and economic
development in lower-income communities. However, 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 pre;- _e 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
economic development projects.
In the watered-down exam, you 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.
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 lower 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 neighborhoods.
In Michigan, the FDIC oversees 107 institutions, controlling $3 I
billion in assets. Overall, 93% have under $1 billion in assets and 22%
have between $250 million and $t billion in assets and would be effected
by the proposed changes in CRA regulations. One hundred percent of
assets in rural Michigan are controlled by institutions with less than
$1 billion and would therefore be subject to abbreviated CRA exams.
Eighty-nine percent of the institutions in urban areas have less than $l
billion in assets. If the proposed changes to CRA are adopted by the
FDIC, 46% of the assets in urban Michigan would not be subject to the
current level of scrutiny under CRA.
Your changes directly oppose CRA's mandate to require lenders to meet
community needs. CRA is too important to be gutted, Please drop your
proposal like the two other federal agencies that recognized its harm to
underserved communities.
Sincerely,
William
Detroit, MI
cc: Michigan Community Reinvestment Coalition
National Community Reinvestment Coalition
President George W. Bush
Senators John Kerry and John Edwards |
