University Neighborhood Housing Program
September 17, 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:
On behalf of the University Neighborhood Housing Program (UNHP)
we urge you to withdraw your proposed changes to the Community Reinvestment
Act (CRA) regulations. UNHP is a nonprofit Community Development
Financial Institution in the Northwest Bronx. CRA has been extremely
instrumental in our work over the past two decades to create, preserve
and finance affordable housing. We feel that the proposed changes
are likely to weaken CRA and negatively affect the positive steps
that have been taken as part of implementation and enforcement of
the Community Reinvestment Act. We believe that the revision will
affect approximately 20 banks operating in the New York area.
CRA has been
a powerful and successful tool for revitalizing low- and moderate-income
communities
and supporting affordable housing.
CRA also can be pointed to as one the principal driving forces behind
increased homeownership and economic development in these formerly
financially underserved communities. Our communities experienced
the disappearance of bank branches and service in the eighties and
nineties; more recently, we have seen an upsurge in the number of
branches. We are convinced that CRA has played a role in this development.
Our communities have a large number of working, low-income people;
many are immigrants. The service test aspect of CRA is an encouragement
to banks to meet the needs of the whole range of customers in our
area. Revising CRA criteria on 29 more banks may result in a reduction
in bank services at a time when our communities are re-building.
UNHP is concerned that the FDIC’s proposed rule change to increase
the asset threshold of “small banks” from $250 million
to $1 billion will result in a significant reduction in affordable
housing investment. As we did last April when the four bank regulators
had a proposal to raise the threshold to $500 million, we urge the
FDIC to maintain the current $250 million threshold for small banks.
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 substitute a community development
criterion for state-chartered banks with assets between $250 million
and $1 billion. We simply do not see the need to make the proposed
changes that may in fact result in banks’ withdrawing from
some of their current community reinvestment activities and thereby
negatively affecting affordable housing preservation and creation
activities.
CRA is a critical component of affordable housing and community
development activities occurring around the nation. The accomplishments
related to CRA should not be taken for granted. We have been able
to work closely with a number of banks in our community and we have
developed good relationship with a number of bankers and institutions.
However, we are fully aware that most of this bank cooperation is
rooted in the Community Reinvestment Act. Especially, as we watch
the number of banks dwindle and in some cases relationships developed
over a period of years eradicated in seconds by mergers, we are convinced
that it is more vital than ever to preserve and strengthen CRA.
Sincerely,
Jim Buckley, Executive Director
Gregory Jost, Deputy Director
University Neighborhood Housing Program
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