Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official. 
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
Https
The site is secure. 
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
Federal Register Publications

FDIC Federal Register Citations



Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations




FDIC Federal Register Citations


CAP Services, Inc.


From: Karl Pnazek [mailto:kspnazek@capmail.org]
Sent: Friday, March 26, 2004 3:25 PM
To: Comments
Subject: Oppose CRA Regulations

Karl Pnazek
5499 Hwy 10 East
Stevens Point, WI 54481


March 26, 2004

Executive Secretary Robert Feldman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429


Dear Executive Secretary Feldman:

Docket No. 04-06
Communications Division
Public Information Room, Mailstop 1-5
Office of the Comptroller of the Currency
250 E St. SW,
Washington 20219

Docket No. R-1181
Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington DC 20551

Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429

Regulation Comments, Attention: No. 2004-04
Chief Counsel’s Office
Office of Thrift Supervision
1700 G Street NW
Washington DC 20552

To Officials of Federal Bank and Thrift Agencies:

As a member of the National Congress for Community Economic Development,
CAP Services, Inc. urges you to withdraw the proposed changes to the
Community Reinvestment Act (CRA) regulations. The CRA has been an
important tool for CAP in increasing access to homeownership and small
business loans for low- and moderate-income families in rural central
Wisconsin. The proposed changes could be harmful to our continued use of
CRA to move lenders to make further progress in community reinvestment.

The proposed CRA changes could also thwart the Administration’s goals of
creating 5.5 million new minority homeowners by the end of the decade.

Specifically, the proposal to "streamline" exams for banks with assets
between $250 million and $500 million will affect 36 banks in Wisconsin
(10 in rural areas). These affected rural banks have 71 branches and
represent 17.6% of all deposits in rural areas.

Let me illustrate by decribing a practical impact the current CRA
regulations have had. In 1991 CAP Services began what is today a very
successful homebuyers assistance program that offers downpayment and
housing rehabilitation assistance to first-time homebuyers. Despite the
financial advantages of participation (elimination of PMI, better loan to
value ratios, etc.), some of our regional rural lenders ($250-$500 million
in assets) chose not to participate by making loans to these households.
By establishing a record of accomplishment, doing a great deal of lender
outreach and being very assertive with our CRA advocacy, CAP has been able
to convince virtually all of the lenders in our area to participate in our
program. We used the same model to encourage area lenders to participate
in our IDA (Individual Development Account) program when it was
established in 1999.

We are now working with area lenders to encourage them to participate in
CAP's business lending program for LMI households. Any weakening of the
CRA by "streamlining" the examiniation process could have an adverse
impact on our efforts. We encourage you to withdraw the proposed
regulations and revisit their potential impact on rural areas again. With
the increased regionalization of banking and the the increased use of
standardized underwriting that reflects an urban bias against rural
lending, we need CRA in its present form more than ever.

This problem is not limited to rural Wisconsin. The proposed changes
would reduce the rigor of CRA exams for 1,111 banks nationwide that
account for more than $387 billion in assets.

The elimination of the investment and service tests for more than 1,100
banks could translate into considerably less access to banking services
and capital for underserved communities. In other areas, these banks
might no longer be held accountable under CRA exams for investing in Low
Income Housing Tax Credits, which have been a major source of affordable
rental housing needed by the large numbers of seniors living in our areas.

The federal regulators will also have lost an important tool for enforcing
CRA’s statutory requirement that banks have a continuing and affirmative
obligation to serve credit and deposit needs if they eliminate the
investment and service test for a large subset of depository institutions.

In closing, we encourage you to withdraw the proposed regulations and
reissue them only after careful analysis of the impact of any revisions on
rural America.

Sincerely,

Karl S Pnazek
Cap Services, Inc.

 

Last Updated 03/31/2004 regs@fdic.gov

Last Updated: August 4, 2024