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From: A. Allan Schmid
[mailto:schmid@msu.edu]
Sent: Friday, April 02, 2004 10:56 AM
To: regs.comments@occ.treas.gov; regs.comments@federalreserve.gov;
Comments; regs.comments@ots.treas.gov;
jsilver@ncrc.org
Subject: Community reinvestment act
April 2, 2004
Dear Officials of Federal Bank and Thrift Agencies:
As a banking customer I would like to urge you to change your
proposed Community Reinvestment Act (CRA) regulation before finalizing
it. I believe you need a stronger predatory lending standard and I
believe you should keep the small bank definition as it is at $250
million in assets.
I hate rip-off lenders who do what you call "asset-based lending" and
try to force borrowers into foreclosure so they can take over their
homes. However, there are a whole bunch of other ways that seemingly
good banks take advantage of customers who don't understand the loan
process. I think the regulators should use the CRA exams to penalize
lenders who push high cost loans with high fees and those who get you
into a bad loan and then try to flip you into an even worse loan. I hate
prepayment penalties that keep you from getting out of a bad loan and
single premium credit insurance policies that cost a lot but don't
really help the customer. Lower a bank's CRA rating when they do stuff
like that.
The big banks are getting so big that to think they would actually do
much for regular folks is a joke, so I hope you will pay more attention
to the smaller banks. They can do more if the regulators would only
encourage the larger of the small banks to support community development
lending and investments in smaller communities. Keeping them on the
large bank CRA exam will do more to encourage reinvestment in the
community than letting them take the small bank exam does. I'm asking
you not to raise the asset threshold definition of a small bank.
I also support the position of the National Community Reinvestment
Coalition. I think they pretty much nailed it.
Thank you very much for paying attention to my concerns.
Sincerely,
Allan Schmid Phone (517) 355-2266
University Distinguished Professor
Dept. of Agr. Economics FAX (517) 432-1800
Michigan State University
East Lansing MI 48824-1039 USA E-Mail
schmid@pilot.msu.edu
Web page(Institutional Econ) http://www.msu.edu/user/schmid/instecon.htm
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