Coachella Valley
Housing Coalition
From: Martha P. Juarez [mailto:marthap@cvhc.org]
Sent: Monday, October 04, 2004 1:20 PM
To: Comments
Subject: FW: RIN 3064-AC50
> 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,
>
>
> Martha P. Juarez
> Asset Management
> Coachella Valley Housing Coalition
> __________________________________________________
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