NEIGHBORHOOD ECONOMIC DEVELOPMENT CORPORATION
April, 2004
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
Dear Officials of Federal Bank and Thrift Agencies:
As a member of the National Community Reinvestment Coalition, and on
behalf of Neighborhood Economic Development Corporation, I urge you to
withdraw the proposed changes to the Community Reinvestment Act (CRA)
regulations.
CRA has been instrumental in increasing access to homeownership,
boosting economic development, and expanding small businesses in the
nation's minority, immigrant, and low- and moderate-income communities.
Your proposed changes are contrary to the CRA statute because they will
halt the progress being made in community reinvestment. I know because I
remember the resources that were available prior to CRA for community
development—they were ONLY public resources. Now, with banks required to
lend, financial resources to preserve neighborhood assets such as
housing are mostly private and precious, not to be tampered with through
gutting this legislation.
The proposed CRA changes will thwart the Administration's goals of
improving the economic status of immigrants and creating 5.5 million new
minority homeowners by the end of the decade. Ironically, the proposed
CRA changes would facilitate predatory lending and reduce the ability of
the general public to hold financial institutions accountable for
compliance with consumer protection laws.
The proposed changes include three major elements: 1) Streamlined,
i.e. cursory exams for banks with assets between $250 million and $500
million; 2) a weak predatory lending compliance standard under CRA; and
3) expanded data collection and reporting for small business and home
lending.
The beneficial impacts of the third proposal are overwhelmed by the
damage imposed by the first two proposals. In addition, you did not
update procedures regarding affiliates and assessment areas in this
proposal, and thus missed a vital opportunity to continue CRA's
effectiveness.
Thank you for your attention to this critical matter.
Sincerely,
Karen LaFrance
Executive Director
Cc: National Community Reinvestment Coalition
President George W. Bush
Treasury Secretary John W. Snow
