| DELAWARE COMMUNITY
REINVESTMENT ACTION COUNCIL September 19, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429
Re: RIN 3064-AC50
Dear Mr. Feldman:
On behalf of the Delaware Community Reinvestment Action Council,
Inc., (DCRAC), a fair lending advocacy group in Delaware, I am writing
in opposition of the proposal to redefine small banks as banks with
assets under one billion dollars.
We also oppose the streamlined evaluation process which looks to
employ a seriously deficient community development criterion. Currently,
a mid-sized bank must engage in all three activities: lending,
investments, and service. Under the proposal a mid-sized bank may choose
the easiest of a community development activity.
The Community Reinvestment Act (CRA) has been instrumental in
increasing access to homeownership, boosting economic development, and
expanding small businesses in Delaware's minority, immigrant, and low-
and moderate-income communities. With each attempt to weaken CRA,
Delaware has seen a rise in predatory lending practices. Given this
backdrop, any further tinkering with the CRA is outweighed by the harm
to the community.
Yet another rationale for not implementing the proposal is that it
hampers the Administration's goals of improving the economic status of
immigrants and creating 5.5 miliion new minority homeowners by the end
of the decade. For example, in Delaware the current small banks and the
proposed additional small banks are predominantly in our rural
communities. Rural Delaware is already handicapped in serving the
lending, investment, and credit service needs of a growing lower income
community. The government is already chiseling away at programs that
address the current housing crisis in Delaware. The burden has fallen on
non-profits and their for-profit
counterparts. It is CRA that enables our communities to continue to be
served to some
extent. The proposal to expand the small bank definition and evaluate
bank performance under an amorphous community development criterion will
likely have a drastic adverse impact on homeownership prospects as well
as efforts at developing affordable housing, particularly in rural
Delaware—home to two of Delaware's three Counties.
In addition, already predatory lending and rising consumer debt are
threatening to demoralize our communities. CRA is an important mechanism
by which community confidence is regenerated. We simply cannot afford to
lose any CRA credit, investments, and services in our community. Not
only all resources currently available -to meet the credit needs of the
community are needed, they are simply not enough! This proposal limits
the currently available resources immensely.
Lastly, Delaware boasts a CRA environment where financial education,
homeownership counseling, small business counseling and CDFIs, Low
Income Housing Tax Credits, IDA programs, and numerous innovative means
are employed to serve the credit needs of the entire Delaware Community.
Already we maintain that this is not enough.
Corporate goodwill is not enough to encourage community reinvestment.
Strong CRA is needed to ensure that the credit needs of all communities
are met. The proposal would further limit opportunities.
We strenuously oppose the expansion of small bank definition. We are
equally opposed to the ill-conceived notion of a community development
criterion. As mentioned earlier, community development investments are
crucial to meeting the housing and business needs of our community.
Community development services build consumers of financial services.
CRA is the research (identify investment opportunities) and development
(investment in people who become bankable) arm of the business
recognized as banking. This proposal limits R&D by our financial
institutions in our communities.
Thank you for the opportunity to comment on this proposal.
Sincerely,
Rashmi Rang
Delaware Community Reinvestment Action Council Inc.
Wilmington, DE
Cc: Senator Joseph Biden
Senator Thomas Carper
Congressman Michael Castle
National Community Reinvestment Coalition
President George W. Bush
Treasury Secretary Snow
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