From: JTaylor192@aol.com [mailto:JTaylor192@aol.com]
Sent: Monday, September 13, 2004 3:07 PM
To: Comments
Subject: Small Bank definition
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
I am writing to express my concern that the FDIC may be unwittingly
weakening the ability of working class Americans to use banks to
build their wealth by acquiring assets. Having more banks under the
streamlined CRA exam will only lessen the commitment of banks to
serve underserved people.
CRA is vital for increasing homeownership and economic development
in lower-income communities. However, your proposed changes would
chill the various public-private partnership efforts now underway
to develop low-income neighborhoods.
Today, banks with over $250 million in assets must be tested on
their number of loans, investments, and services to low-and moderate-income
communities. But your proposal would eliminate the investment and
service requirements for all banks with under $1 billion in assets.
This will result in significantly fewer loans and investments in
affordable rental housing, health clinics, community centers, and
economic development projects. Moreover, with no Service Test applied,
low income communities can count on payday lenders, check cashers
and pawn shops for their basic banking services. Low income people,
those least able to afford more expensive products, will end up paying
more for their basic banking services than wealthy people.
Your proposal
to have mid-sized banks pick which community development activities
they
will undertake is not only unfair, but illegal. Right
now, these banks must make community development loans, investments,
and services. The law (CRA) give them an "affirmative obligation
to meet the credit needs of the communities they're chartered to
serve," and it specifically notes that this law includes low
and moderate income neighborhoods. Loans, basic banking services
and investments all constitute those 'needs' under the CRA. Your
proposed test allows banks to choose only one of the three activities.
This is contrary to what the law calls for. The law does not say
they are chartered to meet one of several of the community credit
needs, but rather the community's credit needs. They are not affirmatively
obligated to pick and chose one community credit need. Your proposal
not only goes against the spirit of this law, but actually directly
contravenes the clear language that banks must meet the credit needs.
I would suggest that since your proposed changes would both subvert
language clear in the law and do damage to efforts of low and moderate
income Americans to build wealth and acquire assets, that you immediately
withdraw your proposal in favor of a more balanced process that includes
a lengthy discussion and public comment period. Given the importance
and potential negative impacts of your proposal, to do anything less
would be irresponsible.
Sincerely,
John Taylor
201 Stratford Street
West Roxbury, Massachusetts
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