Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429
April 2, 2004
Dear Officials of Federal Bank and Thrift Agencies:
As a banking customer I would like to urge you to change your
proposed Community Reinvestment Act (CRA) regulation before finalizing
it. I believe you need a stronger predatory lending standard and I
believe you should keep the small bank definition as it is at $250
million in assets. Wisconsin would be hard-hit by the proposed changes
in requirements for small banks.
I hope you will pay more attention to the smaller banks. They can do
more if the regulators would only encourage the larger of the small
banks to support community development lending and investments in
smaller communities. Keeping them on the large bank CRA exam will do
more to encourage reinvestment in the community than letting them take
the small bank exam does. I'm asking you not to raise the asset
threshold definition of a small bank. I am also very concerned about the
proposed standard regarding predatory loans. I am very aware of rip-off
lenders who do what you call "asset-based lending" and try to force
borrowers into foreclosure so they can take over their homes. However,
there are many other ways that seemingly good banks take advantage of
customers who don't understand the loan process. I think the regulators
should use the CRA exams to penalize lenders who push high cost loans
with high fees and those who get you into a bad loan and then try to
flip you into an even worse loan. I also oppose prepayment penalties
that keep you from getting out of a bad loan, loans with balloon
payments, and single premium credit insurance policies that cost a lot
but don't really help the customer. Regulators should lower a bank's CRA
rating when they include loan features like that.
I also support the position of the National Community Reinvestment
Coalition. I think they pretty much nailed it.
Thank you very much for paying attention to my concerns.