Joint Reinvestment Committee of Cypress Hills and City Line
April 5, 2004
Docket No. R-1181
Jennifer J. Johnson
Secretary
Board of Governors-Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551
Dear Ms. Johnson:
On behalf of The Joint Reinvestment Committee of Cypress Hills and
City Line, a longstanding coalition between our nonprofit community
development organization and a network of block groups in East New
York, Brooklyn which prior to CRA were redlined, I write to provide
comments on the proposed changes to the Community Reinvestment Act.
We oppose several changes proposed to CRA:
- Changing
the definition of “small” banks by increasing
the asset size of institutions excluded from investment and service
tests, and
- Changing the definition of predatory lending
loans to exclude many unscrupulous practices we have witnessed in
our communities, e.g. prepayment
penalties and high fees.
We
also believe that banks should fully disclose and report upon the lending
of their
affiliates
and if these affiliates are engaging in
predatory practices, the CRA ratings of all affiliated banks should
be negatively impacted. Furthermore, we endorse the proposal to mandate
that banks report on business lending by census tract. This new reporting
on business lending will better inform us as to the full scope of any
particular lending institution’s efforts to reinvestment in low
and moderate income neighborhoods like Cypress and City Line.
CRA has been a
powerful tool to spurring lending, affordable housing and community
development in our predominately Latino, low and moderate
income areas. Over the past decade we have carefully analyzed HMDA
data and created a productive dialogue with our local banks. These
relationships, grounded in CRA principles and secured by CRA enforcement
mechanisms, have led to a more than tripling of home purchase, refinance
and repair lending, the financing of several low income housing developments and the launch
of a mortgage foreclosure prevention initiative. We strongly encourage
you to strengthen CRA for the ultimate benefit of our nation’s
struggling communities.
Sincerely yours,
Michelle D. Neugebauer
Executive Director
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