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NATIONAL COUNCIL ON
AGRICULTURAL LIFE AND LABOR RESEARCH FUND
September 16, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Dear Mr. Feldman:
RE: "RIN 3064-AC50"
On behalf of the National Council on Agricultural Life and Labor
Research Fund, Inc. (NCALL), I am pleased to comment on the proposed
changes to the Community Reinvestment Act statute being considered by
the FDIC. NCALL is a regional nonprofit organization based in Dover,
Delaware that works to assure lower income households have access to
affordable apartments and to homeownership opportunities.
Our development work is responsible for 37 apartment communities with
another 11 communities under construction or with funds obligated.
During 2004, NCALL's homeownership counseling program reached its 5,000'
closing, having leveraged nearly $500 million in attractive CRA
mortgages and down payment and settlement help. NCALL's rural loan fund
has done substantial lending to nonprofit housing developers and is
currently in the planning stages of becoming a CDFI to better serve our
nonprofit and household customers. A majority of this work has been done
in rural areas serving households of modest means, often minority and
female-headed households, who simply would not have accessed decent,
affordable housing any other way. Virtually all of this work has been
supported by CRA activities, some by the same banks that would be
exempted by the proposed rule.
1. CRA has been so instrumental in Delaware by involving the private
sector in housing and community development, an industry previously
solely left to government. The emphasis on homeownership has had a
dramatic economic
impact that is right now being studied by the Delaware Housing Coalition
through the Economics Department of the University of Delaware. Any
weakening of this law will negatively impact the public, which is
already reeling from a lack of consumer protection and predatory
lending.
2. This Administration has undertaken an ambitious goal of elevating
homeownership, particularly to minority households, by the end of the
decade. Enacting this CRA change in Delaware puts the goal of improving
minority homeownership in our rural areas which is where the
preponderance of banks are that will be exempted or streamlined at great
risk.
3. Delaware's rural areas, which traditionally have not enjoyed the
housing and community development resources of urban America, would be
hard hit by the proposed CRA changes. A listing of the banks that would
be streamlined with cursory exams due to increased asset size thresholds
reads like a "Who's Who" of Delaware's rural banks. Any change in
offering attractive mortgages, underwriting criteria, support of
homeownership counseling, and investment in affordable housing will
upset the delicate balance that is now starting to make headway in
addressing local, housing needs.
4. It is clear from the past twenty years of active CRA history in
Delaware that any lessening, streamlining, or relaxation of CRA and the
examination process which now holds financial institutions accountable
through evaluation of their lending, investing, and services to low and
moderate income communities, would have dire results. Corporate goodwill
is simply not sufficient to address the deeply rooted and expensive
issues of decent housing and community development. All resources
currently available are needed. We simply cannot afford to take major
steps backward.
5. At a time when the federal government is divesting itself of the
urban and rural housing programs of the past, as we see programs gutted
and budgets reduced, low and moderate income people and communities
cannot take the double hit of lessened CRA responsibilities. Affordable
housing is far too complicated to develop, difficult to preserve, and
expensive to finance to leave to the chance of a relaxed CRA program.
6. The same banks in Delaware that would benefit from the rule
changes and streamlining are currently involved in special mortgages,
Latino workforce financial literacy programs, homeownership counseling,
and many more creative initiatives that are helping to address the many
needs that exist. Some invest in Low Income Housing Tax Credits, which
are such a necessary part of the apartment development that we do,
serving families, elderly, and farmworkers who cannot yet afford
homeownership. These smaller institutions are important to our CRA mix
in Delaware.
7. What possible positive impact can come from removing the
investment and service tests for almost half of Delaware's financial
institutions? The result could only be a lessening of affordable credit,
capital and banking services to the rural, already underserved
communities. How can we to be sure the exempt institutions would
continue offering branches, checking accounts, Individual Development
Accounts, or debit card services—the exact access to capital and wealth
building tools that are needed?
8. Finally, at a time when predatory lending and consumer debt
threatens the very fiber of our nation, why would we further de-regulate
some of the very institutions that that are preying on the very people
and communities that need access to quality credit? Changing CRA at this
time leaves far too much to chance when we cannot afford the loss of any
credit, investments, services, or mortgages.
The wonderful housing and community development gains leveraged by
CRA cannot be risked or weakened at the expense of decent, affordable
housing and banking services for the retired who have contributed so
much to our country, our modest income families who provide so many
necessary services to our communities, our workforce who often have
difficulty securing affordable housing, and farmworkers who put the food
on our table.
Thank you for your consideration.
Sincerely,
Joe J. Myer
Executive Director
National Council on Agricultural Life and Labor Research Fund
Dover, DE |
