National Council on Agricultural Life and Labor
Research Fund
September 16, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Dear Mr. Feldman:
RE: “RIN
3064-AC50”
On behalf of the National Council on Agricultural Life and Labor
Research Fund, Inc. (NCALL), I am pleased to comment on the proposed
changes to the Community Reinvestment Act statute being considered
by the FDIC. NCALL is a regional nonprofit organization based in
Dover, Delaware that works to assure lower income households have
access to affordable apartments and to homeownership opportunities.
Our development
work is responsible for 37 apartment communities with another 11
communities
under construction or with funds obligated.
During 2004, NCALL’s homeownership counseling program reached
its 5,000th closing, having leveraged nearly $500 million in attractive
CRA mortgages and down payment and settlement help. NCALL’s
rural loan fund has done substantial lending to nonprofit housing
developers and is currently in the planning stages of becoming a
CDFI to better serve our nonprofit and household customers. A majority
of this work has been done in rural areas serving households of modest
means, often minority and female-headed households, who simply would
not have accessed decent, affordable housing any other way. Virtually
all of this work has been supported by CRA activities, some by the
same banks that would be exempted by the proposed rule.
1. CRA has been so instrumental in Delaware by involving the private
sector in housing and community development, an industry previously
solely left to government. The emphasis on homeownership has had
a dramatic economic impact that is right now being studied by the
Delaware Housing Coalition through the Economics Department of the
University of Delaware. Any weakening of this law will negatively
impact the public, which is already reeling from a lack of consumer
protection and predatory lending.
2. This Administration has undertaken an ambitious goal of elevating
homeownership, particularly to minority households, by the end
of the decade. Enacting this CRA change in Delaware puts the goal
of improving minority homeownership in our rural areas which is
where the preponderance of banks are that will be exempted or streamlined
at great risk.
3. Delaware’s rural areas, which traditionally have not enjoyed
the housing and community development resources of urban America,
would be hard hit by the proposed CRA changes. A listing of the banks
that would be streamlined with cursory exams due to increased asset
size thresholds reads like a “Who’s Who” of Delaware’s
rural banks. Any change in offering attractive mortgages, underwriting
criteria, support of homeownership counseling, and investment in
affordable housing will upset the delicate balance that is now starting
to make headway in addressing local housing needs.
4. It is clear from the past twenty years of active CRA history
in Delaware that any lessening, streamlining, or relaxation of CRA
and the examination process which now holds financial institutions
accountable through evaluation of their lending, investing, and services
to low and moderate income communities, would have dire results.
Corporate goodwill is simply not sufficient to address the deeply
rooted and expensive issues of decent housing and community development.
All resources currently available are needed. We simply cannot afford
to take major steps backward.
5. At a time when the federal government is divesting itself of
the urban and rural housing programs of the past, as we see programs
gutted and budgets reduced, low and moderate income people and communities
cannot take the double hit of lessened CRA responsibilities. Affordable
housing is far too complicated to develop, difficult to preserve,
and expensive to finance to leave to the chance of a relaxed CRA
program.
6. The same banks in Delaware that would benefit from the rule changes
and streamlining are currently involved in special mortgages, Latino
workforce financial literacy programs, homeownership counseling,
and many more creative initiatives that are helping to address the
many needs that exist. Some invest in Low Income Housing Tax Credits,
which are such a necessary part of the apartment development that
we do, serving families, elderly, and farmworkers who cannot yet
afford homeownership. These smaller institutions are important to
our CRA mix in Delaware.
7. What possible
positive impact can come from removing the investment and service
tests
for almost half of Delaware’s financial institutions?
The result could only be a lessening of affordable credit, capital
and banking services to the rural, already underserved communities.
How can we to be sure the exempt institutions would continue offering
branches, checking accounts, Individual Development Accounts, or
debit card services—the exact access to capital and wealth
building tools that are needed?
8. Finally, at a time when predatory lending and consumer debt threatens
the very fiber of our nation, why would we further de-regulate some
of the very institutions that that are preying on the very people
and communities that need access to quality credit? Changing CRA
at this time leaves far too much to chance when we cannot afford
the loss of any credit, investments, services, or mortgages.
The wonderful housing and community development gains leveraged
by CRA cannot be risked or weakened at the expense of decent, affordable
housing and banking services for the retired who have contributed
so much to our country, our modest income families who provide so
many necessary services to our communities, our workforce who often
have difficulty securing affordable housing, and farmworkers who
put the food on our table.
Thank you for your consideration.
Sincerely,
Joe L. Myer
Executive Director
|
