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SPRING GARDEN NEIGHBORHOOD COUNCIL
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St, NW 20429
RE: RIN 3064-AC50
As a member of the Pittsburgh Community Reinvestment Group, the
Spring Garden Neighborhood Council, Inc. (SGNC) board of directors urges
you to withdraw your proposed changes to the Community Reinvestment Act
(CRA) regulations. CRA has been instrumental in increasing
homeownership, boosting economic development, and expanding small
businesses in Pittsburgh's minority and low- and moderate-income
communities. Your proposed changes are contrary to the intent and
fundamentals of CRA because they will impede the progress made in
community development,
Currently, CRA exams look at the number of loans, investments, and
services that banks with more than $250 million in assets make to low-
and moderate-income communities. Your proposal will eliminate the
investment and service portion of the CRA exam for banks with assets
between $250 million and $1 billion thereby affecting several key
banking institutions here in Pittsburgh.
To replace the investment and service parts of the CRA exam, the FDIC
proposes to add an inadequate community development criterion. Mid-size
banks with assets between $250 million and $1 billion would only have to
engage in one of three activities: community development lending,
investing or services. Currently, mid-size banks must engage-in all
three activities. SGNC believes that the end result will be
significantly fewer loans and investments in affordable home-ownership
programs, small business loans and community based development lending.
Traditionally, mid-size banks have accomplished these activities by
developing innovative products and creating underwriting criteria to
meet the needs of underserved communities and their development
corporations. By eliminating the requirements set forth by CRA, Mid-size
banks will no longer keep these actions in mind when conducting banking
practices.
The elimination of the service test will especially have a harmful
consequence for low-and moderate-income communities in Pittsburgh. CRA
examiners will no longer expect mid-size banks to place bank branches in
low- and moderate-income communities, effectively halting our efforts to
provide affordable checking and savings accounts to consumers with
modest incomes. In addition, your proposal eliminates small business
lending data reporting for mid-size banks. Without data on lending to
small businesses, the public cannot hold mid-size banks accountable for
responding to the credit needs of small businesses, which is a
fundamental aspect of community development.
In conclusion, your proposal is directly the opposite of CRA's
mandate of imposing an obligation to meet community needs. Two other
federal agencies did not embark upon the path you are taking because
they recognized the harm it would cause. CRA is too vital to be gutted
by regulators. If you do not reverse your proposed course of action, the
Spring Garden Neighborhood Council, Inc, will ask that Congress halt
your efforts before the damage is done.
Sincerely,
Bob Herbert Vice President
Spring Garden Neighborhood Council, Inc.
1114 Spring Garden Avenue, Pittsburgh, PA 15212
Cc: Pittsburgh Community Reinvestment Group
National Community Reinvestment Coalition
President George W. Bush
Senators John Kerry and John Edwards |
