September 16, 2004
Robert E. Feldman
Executive Secretary
Attn: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
Re: CRA Regulation Changes
Dear Mr. Feldman:
The Affordable Housing Clearinghouse wishes to submit commentary on the
proposed changes of the Community Reinvestment Act.
The Affordable Housing Clearinghouse (AHC) is a network of financial
institutions, community organizations, and local government agencies
dedicated to the financing and development of quality affordable housing
in a five-county area in California: Los Angeles, Orange, Riverside, San
Diego, and San Bernardino counties. AHC has been organized as a
nonprofit organization since 1991. With the collaboration of our 30
lender members, which include large, medium and small financial
institutions from all of our regions, we have helped to finance over 250
units of affordable ownership housing and over 800 units of affordable
rental or special needs housing.
We face many challenges in meeting the housing and financial needs in
our high-cost and highly populated region. AHC firmly believes that the
Community Reinvestment Act has helped increase homeownership, expand
economic opportunity, and expand access to financial services and
resources in low-income communities. However, many communities are still
underserved by financial institutions. The proposed CRA changes would
reduce lending, investment, and service in low-income communities.
Under the current CRA regulations, banks with assets of at least $250
million are rated and evaluated based on their demonstrated performance
in providing lending, investment, and services to low- and
moderate-income communities. The proposed changes would eliminate the
investment and service components of the CRA exam for state-chartered
banks with assets between $250 million and $1 billion. In place of the
investment and service parts of the CRA exam, the FDIC proposes to add a
community development criterion. The community development criterion
would require mid-size banks with assets between $250 million and $1
billion to engage in only one of three activities: community development
lending, investing or services. Currently, mid-size banks must engage in
all three activities.
In addition, the FDIC's proposal would eliminate the small business
lending data reporting requirement for mid-size banks. Mid-size banks
with assets between $250 million and $1 billion would no longer be
required to report small business lending by census tracts or revenue
size of the small business borrowers.
State-chartered and mid-sized banks play an important role in meeting
the financial needs of local communities. We urge you to maintain the
current standard of evaluation for these banks, which examines
demonstrated performance in all three areas: lending, investment, and
services, as well as reporting of small business lending by census
tracts and revenue size of the borrowers. Thank you in advance for
considering our remarks.
Sincerely,
Trinh LeCong EXECUTIVE DIRECTOR
Affordable Housing Clearinghouse
Lake Forest, CA
