Coachella
Valley Housing Coalition
From: Elsa Mexia [mailto:e
Sent: Monday, October 04, 2004 1:34 PM
To: Comments
Subject: RIN C064-AC50
October 4, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429
Re: The FDIC’s proposed change to the Community Reinvestment
Act’s definition of a “small bank.”
Dear Sir:
As a concerned citizen and as an employee of the Coachella Valley
Housing Coalition (CVHC), I am writing to express my adamant opposition
of any changes to the Community Reinvestment Act. Situated in Southern
California, about 100 miles east of Los Angeles, the Coachella Valley
is in a unique community known for its high-end luxury homes and
vacation resorts in Palm Springs and Indian Wells. Little known is
the fact that the Valley is primarily rural, and economically sustained
by low-wage service and agriculture industry jobs.
The Coachella Valley Housing Coalition has committed 22 years to
helping low income people improve their living conditions through
advocacy, research, and the construction and operation of housing
and community development projects. These efforts have meant the
construction of more than 2,500 single family homes and apartment
units for farmworkers, migrant farmworkers, seniors, and individuals
with special needs, HIV/Aids and other chronic illnesses.
The Community Reinvestment Act is a critical component to CVHC’s
affordable housing and community development efforts. According to
Community Development Digest, the FDIC shortly will consider adopting
the Office of Thrift Supervision (OTS) revision to the threshold
for small institutions using streamlined evaluations to $1 billion
in assets. An increase to the threshold of what is considered to
be a small bank would devastate an already difficult working relationship
between low-income housing builders like ourselves and small banks,
especially in rural communities where we have found the need is greatest.
According to the National Community Reinvestment Coalition, changing
of the “small bank” definition will allow 2,000 insured
institutions with total assets of almost $1 trillion and branches
in more than 18,800 communities (96% of all FDIC-regulated banks)
to receive a less stringent CRA exam. Because institutions with assets
of $250 million to $1 billion comprise substantial market share in
rural areas such as ours, a change will mean rural communities will
have less access to institutions required to offer services and investments
that benefit low and moderate income communities. The private market
without regulatory incentives would not reach many rural and impoverished
areas. In essence, the proposed FDIC rule would exempt many of our
community’s critical partners from the effective and productive
requirements currently in place. CRA has been a vital aspect of reinvestment
in disenfranchised communities and should be held at a high standard
of reporting due to historical discriminatory lending practices which
lead to blight and disinvestment in low-income communities.
Small banks have
always been an integral part of the communities they serve—they are more familiar with their surroundings and
clientele, and their banking needs—CRA forces all banks to
get out and serve the neighborhoods in which they operate. When banks
infuse their services into a community that community thrives, businesses
thrive, people purchase homes, etc. To reduce CRA’s mandate
for “small” banks will cause banks to focus on easy
and more profitable avenues of business rather than working towards
a
broader lending portfolio. Because government subsidies for housing
are shrinking, now is not the time to decrease regulations for
private capital to leverage scarce subsidy dollars.
CVHC has benefited greatly from CRA’s mandate on both large
and small banks, through various loans and grants over the years.
Communities will lose with less stringent CRA standards. I urge
FDIC not to move forward with the OTS proposed rule.
I appreciate the opportunity to share with you my impressions on
any changes proposed for the Community Reinvestment Act as it serves
as a great tool for all our housing and community building efforts.
Thank you for your consideration of my comments.
Sincerely, Elsa Mexia
Administrative Secretary
Coachella Valley Housing Coalition
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