GEORGIA
STATE TRADE ASSOCIATION OF NONPROFIT DEVELOPERS
August 24, 2004
Donald E. Powell
Chairman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
John M. Reich
Vice Chairman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Thomas J. Curry
Director
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
John D. Hawke, Jr.
Comptroller of the Currency
Office of the Comptroller of the Currency
250 E Street, SW
Washington, DC 20219
Gentlemen:
Our nonprofit developers, with the help of their governmental and
philanthropic partners, use initiatives such as the Community Reinvestment
Act to rebuild low-and moderate-income communities. They now face
a serious challenge from the OTS and the FDIC as the developers continue
their work of building additional housing for workforce and special
needs populations.
Despite our successes locally and nationally, the banks and thrift
institutions that provided the loans and investments to build new
homes, businesses, and community facilities may no longer have the
impetus to do so if you change the CRA exam threshold.
We hear that the Federal Deposit Insurance Corporation is considering
changes to weaken the Community Reinvestment Act.
It is estimated that 2,000 financial institutions would no longer
be evaluated on their investment or services to low- and moderate-income
communities. These banks have assets of nearly $1 trillion, and an
estimated $5 billion of private capital for affordable housing and
community development may be lost over the next few years
These proposed rule changes would have a devastating effect on affordable
housing investment in here in Georgia, and elsewhere throughout the
nation, particularly in rural areas.
In a recent survey of members of the Georgia State Trade Association
of Nonprofit Developers, 24 nonprofits created 4,218 units of new
affordable housing and rehabbed 9,206 units. They used many layers
of financing, and their financial partners were critical in providing
mortgages, acting as sponsors for the FHLB's AHP and CIP programs,
and purchasing tax credits.
Our concern is that this level of support will no longer be available,
especially for small towns and rural communities in Georgia, if the
CRA threshold amount goes to $1. billion.
The FDIC, and OTS, should be strengthening incentives for financial
institutions to invest in the communities that provide homes, jobs,
and economic opportunities to working families.
Please do not raise the CRA exam threshold.
Sincerely,
Kenneth J. Knox
Executive Director
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