WASHINGTON-MORGAN COUNTIES COMMUNITY ACTION
From: David Brightbill
[mailto:dbrightbill@wmcap.org]
Sent: Wednesday, March 31, 2004 1:53 PM
To: regs.comments@occ.treas.gov; regs.comments@federalreserve.gov;
Comments; regs.comments@ots.treas.gov
Cc: jtaylor@ncrc.org; jmason@communityactionpartnership.com
Subject: Proposed changes to CRA regulations
Dear officials of Federal Bank and Thrift Agencies:
The following are comments concerning the proposed changes to the
Community Reinvestment Act (CRA) regulations:
Streamlined and Cursory Exams: Adding banks between 250 million and
500 million dollars to this category is a step backwards. While
individually these banks may not seem to be significant, when compared
to mega banks, the cumulative dollars represented by the banks, which
would be exempted, is significant, estimated to be over 380 billion
dollars. Many of the exempted banks will be in smaller rural communities
where there may be little or no competition from larger banks, thus the
pressure that current CRA regulations place on banks to affirmatively
lend would almost completely be removed .
Predatory Lending Standard: Predatory lending is a significant and
growing problem. Any proposed regulation must strengthen the ability to
control the practice. The proposed standard states that loans based on
the foreclosure value of the collateral, instead of the ability to
repay, can result in downgrades in CRA ratings. This new standard falls
short of what is needed because it will not cover many instances of
predatory lending. The regulation should seek to prevent lenders from
taking wealth from borrowers through excessive fees or unnecessary
products even though they can afford the monthly payment.
Enhanced data disclosure: This proposal is useful and should be
included.
Missed Opportunity to Update Exam Procedures: Regulations should
require banks to include affiliates in their CRA exam. By requiring
inclusion of affiliates, the agencies can be assured that the intent of
CRA is extended to all operations of the bank.
I urge you to modify the proposed regulations to take in the above
comments.
Thank you for your attention.
David E. Brightbill
Executive Director
Washington-Morgan Counties Community Action
Marietta, Ohio
