| BLOOMFIELD-GARFIELD
CORPORATION
The Bloomfield-Garfield Corporation
5149 Penn Avenue, Pittsburgh, Pennsylvania 15224
Ph. 412-441-6950 – Fax 412-441-6950
September 20, 2004
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
As a member of the Pittsburgh Community Reinvestment Group, the
Bloomfield-Garfield Corporation 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 The Bloomfield-Garfield Corporation 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
Bloomfield-Garfield Corporation will ask that Congress halt your efforts
before the damage is done.
Sincerely,
Richard Swartz,
Executive Director
Agnes J. Brose,
Deputy Director
Cc:
Pittsburgh Community Reinvestment Group
National Community Reinvestment Coalition
President George W. Bush
Senators John Kerry and John Edwards
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