OREGON HOUSING AND COMMUNITY SERVICES
September 10, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: CommentslLegal ESS
Federal Deposit
Insurance Corporation
550 17th St. NW
Washington DC 20429
RE: RIN No. 3064-AC50
Dear Mr. Feldman:
Oregon Housing & Community
Services (OHCS) urges you to withdraw your proposed changes to
the Community Reinvestment Act (CRA) regulation.
We believe the proposed change will undermine the intent of the law
to provide equitable lending in underserved communities.
The proposed
changes will eliminate the investment and service parts of the
CRA exam for state-chartered banks with assets between $250
million and $1 billion. In place of the investment and service parts
of the CRA exam, the FDIC proposes to add a community development
criterion. The community development criterion would require banks
to offer community development loans, investments or services. The
community development criterion would be seriously deficient as a
replacement for the investment and service tests.
While OHCS believes that updating and simplification of the program
is warranted, we are concerned that the proposed change could allow
more than a thousand banks to back away from their community development
obligations, causing funding for affordable housing to be diminished
or, in some communities, eliminated altogether.
The Community Reinvestment Act is perhaps one of the most successful
community revitalization programs in the nation's history. Oregon
has taken unique approaches to make development of low income housing
a priority, such as the creation of the Farmworker Housing Tax Credit.
The benefits of this state tax credit to local communities and to
our agricultural economy, combined with the benefit to banks in meeting
CRA goals, has made this a successful program to fund farmworker
housing in Oregon. Many of the credits have been purchased by banks
that would have diminished CRA obligations under the proposed change.
We urge you to:
- Maintain
an investment test as part of banks' CRA performance by maintaining
the "small bank" definition
at the $250 million asset threshold.
- Continue
to hold banks that are part of large holding companies to the "large institution" standards.
- Expand CRA so that it better reflects changes in the financial
services industry brought about by market shifts, technology advances,
and financial modernization legislation.
Sincerely,
Jack Kenny
Deputy Director
Oregon Housing & Community Services
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