Community Investment Corporation
From: John Pritscher [mailto:jpritscher@cicchicago.com]
Sent: Tuesday, September 07, 2004 12:51 PM
To: Comments
Subject: CRA - Technical Amendments re: MSAs
Docket Number R-1205
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St., NW
Washington, D.C. 20429
Dear Mr. Feldman:
The Community Reinvesment Act has had more positive impact on community
revitalization than any other single federal program. I am writing
from
Community Investment Coproration (CIC) to protest the proposal to
use
updated Office of Management and Budget (OMB) definitions for metropolitan
statistical areas, which in some cases include a new geographic unit
for
“
metropolitan divisions,” to define CRA assessment areas. CIC
is a
nonprofit multifamily rehab lender with a $550 million loan pool
from 47
banks and several other sources that has benefited greatly from community
reinvestment regulation. We feel this proposal threatens to facilitate
redlining in CRA assessment areas.
According to the proposal, banking regulators would adopt new OMB
definitions of metropolitan statistical areas (MSAs) for CRA analysis
and
bank assessment area designation. The most concerning aspect of the
OMB
changes is the addition of a geographic unit for “metropolitan
division.”
Twelve large MSAs that have some core region of at least 2.5 million
people
will now be subdivided into metropolitan divisions. These metropolitan
divisions are defined as groups of one or more contiguous counties
that
contain an employment center or centers that are closely connected
through
commuting ties. Together the metropolitan divisions form the overall
MSA.
Bank regulators will use metropolitan divisions to calculate median
family
income levels for CRA analysis, and financial institutions will be
allowed
to designate one or more metropolitan division, up to an entire MSA,
as
their assessment area.
While OMB’s goal in creating the metropolitan division may
be “to recognize
that in large MSAs, demographic and economic conditions vary wildly,” we
fear that allowing banks to define their assessment areas using metropolitan
divisions may facilitate redlining and give financial institutions
stronger
rationale for excluding portions of an MSA that would previously
have been
included in an assessment area.
We feel this proposal sets up a condition where banks have increased
rationale and regulatory backing for excluding less desirable parts of MSAs
from their assessment areas and shifting business away from those
communities. While we support more accurate targeting of low- and
moderate-income communities, we do not support allowing financial
institutions to use metropolitan divisions to designate assessment areas.
We ask you to reconsider this proposal.
Sincerely,
John Pritscher, President
Community Investment Corporation
222 S. Riverside Plaza, Suite #2200
Chicago, IL 60606-6109
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