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HUMILITY OF MARY HOUSING INC.
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550
17th St. NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
As a not-for-profit affordable housing provider and an agency that
benefits from the investments made by the area's local financial
institutions, I urge 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 the nation's minority, immigrant and low and
moderate-income communities. Your proposed changes are contrary to the
CRA statute and Congress' intent because they will slow down, if not
halt, the progress made in the community reinvestment.
Under the current CRA regulations, banks with assets of at least $250
million are rated by performance evaluations that scrutinize their level
of lending, investing and services to low and moderate-income
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 and services.
The community development criterion would be seriously deficient as a
replacement for the investment and services tests. 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.
Under your proposal, a mid-size bank could now choose a community
development activity that is easiest for the bank instead of providing
an array of comprehensive community development activities needed by low
and moderate-income communities.
Here in the state of Iowa, 296 of the 297 banks regulated by the FDIC
would be exempt from the stricter "three-part test". The effect of
removing that many banks from the need to engage in all three levels of
lending and services will be devastating to Iowa's rural areas as well
as its larger urban communities.
The consequences for low and moderate-income communities is that CRA
examiners will no longer expect mid-size banks to maintain and/or build
bank branches in their communities. Mid-sized banks will no longer make
sustained efforts to provide affordable banking services, and checking
and savings accounts to consumers with modest income. Mid-size banks
will also not respond to the needs for the growing demand for services
needed by immigrants which is a growing population in Iowa.
In summary, your proposal is directly the opposite of CRA's statutory
mandate of imposing a continuing and affirmative obligation to meet
community needs. Your proposal will dramatically reduce community
development lending, investing and services. You compound the damage of
your proposal in rural areas, which are least able to afford reductions
in credit and capital. You also eliminate critical data on small
business lending. Two other regulatory agencies, the Federal Reserve
Board and the Office of the Comptroller of the Currency, did not embark
upon the path you are taking because they recognized the harm it would
cause.
CRA is too vital to the production and maintenance of affordable
housing to be gutted by regulatory fiat and neglect. Please reverse your
proposed course of action, or we will ask Congress to halt your efforts
before the damage is done.
Sincerely,
Sandra Walters
Humility of Mary Housing, Inc.
1228 E 12th St
Davenport, IA 52803 |
