Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
RE: RIN 3064-AC50
Dear Mr. Feldman:
I am a concerned citizen opposed to watering down CRA (Community
Reinvestment Act) requirements for mid-sized banks. CRA is vital
for increasing homeownership and economic development in lower-income
communities. Your proposed changes will halt the progress that has
been made.
I understand that 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.
Native Americans
living on reservations are the most unbanked population in the
United
States. The Navajo Nation, for example, has 5 bank
branches in total for a population of a quarter of a million people
living in an area the size of West Virginia. You can see the same
or greater number of branches in a single block in our Nation’s
Capital. The proposed changes would only serve to worsen banking
services to tribes.
The proposed
changes, which would make smaller banks less accountable for their
community
reinvestment activity, alarm us, as banks are
finally waking up to the investment opportunities in Indian country.
Indian country has made strides with the help of banks in the mortgage
arena—we saw conventional mortgage activity increase for Native
Americans in 2003. We believe that the strength of the current law
has been instrumental to this development.
The following
data point up the severe continuing needs in Indian country, that
require
a strong CRA. According to the GAO, the rate
of homeownership for Native Americans living on reservations is just
33 percent, or half that of the general population and substantially
lower than that of other minority groups. In addition, Native Americans
are four times more likely than the average American family to live
in substandard housing. (Fannie Mae data, Testimony, Pattye Greene,
May 3, 2004, House Financial Services Committee) Overcrowding has
been documented in the NAIHC study “Too Few Rooms...” (2001)
reporting as many as 25 or even 30 people living in deplorable conditions
under one roof in a 2- or 3-bedroom house.
If the watered-down
exam was approved, it would allow mid-sized banks to choose which
community
development activities they will
undertake. Right now, these banks must make community development
loans, investments, and services. Your proposed test allows banks
to choose only one of the three activities. The result will be less
community development activity. The recent strides in economic development
in Indian country will be lost if banks aren’t required to
invest.
You also propose that community development activities in rural
areas should benefit any group of individuals instead of only low-
and moderate-income individuals. But this will allow banks to cherry-pick
and focus on affluent residents of rural areas rather than the lower
income consumers CRA targets. Finally, you would also eliminate publicly
available data on the small business lending of mid-sized banks.
Without data, community groups and citizens cannot hold banks accountable
for lending to small businesses in their communities.
Your proposed
changes directly oppose CRA’s mandate to require
lenders to meet community needs. CRA is too important to be gutted.
Please withdraw your proposal, as did two other federal agencies—the
Office of Thrifts Supervision and the Federal Reserve—that
recognized the harm of similar changes to underserved communities.
Sincerely,
Kristy McCarthy Weight
419 K Street NE
Washington, DC 20002
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