Unidos Para La Gente
From: Mary Compton
To: Comments
Subject: CRA - Strengthen It
August 26, 2004
Mr. Robert E. Feldman, Executive Secretary
Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St., NW
Washington, DC 20429
Dear Mr. Feldman:
Unidos Para La Gente, a member of the National Community Reinvestment
Coalition, urges you to not make your proposed changes to the Community
Reinvestment Act (CRA) regulations. Since CRA has been largely
responsible for increasing home ownership, boosting economic development,
and expanding small businesses in the nations low-and moderate-income,
minority, and immigrant communities, you need to strengthen it
instead of watering it down.
Your proposed changes are contrary to the CRA statute and Congress'
intent, because they will slow down, if not halt, the progress
we have made in recent years in community reinvestment. President
Bush's own appointee, FDIC Chairman Powell, is proposing the changes
which would greatly diminish banks' obligation to reinvest in their
communities. These proposed changes would eliminate the investment
and service parts of the CRA exam for state-chartered banks with
assets between $250 million and $1 billion and replace them with
a community development criterion requiring banks to offer community
development loans, investments or services. An array of comprehensive
community development activities including loans, investments,
and services are needed by our communities, but with the proposed
changes would no longer be available.
Your proposal would drastically reduce by hundreds of billions
of dollars in more than 5,000 banks assets available for community
development. Mid-size banks would no longer make sustained efforts
to provide affordable banking services and savings and checking
accounts to citizens with modest incomes or to build and maintain
branch banks in those communities.
Reporting small business lending by census tracts or revenue size
of small business borrowers would no longer be required, making
it impossible for the public to hold mid-size banks accountable
for making capital and banking available to these communities.
Your streamlined exam would result in much less community development
activity. And banks could then earn CRA points if they benefit
affluent consumers and communities. Rural areas which are least
able to afford reductions in credit and capital will be hurt the
most. Both the Federal Reserve Board and the Office of the Comptroller
of the Currency recognized the harm it would cause to take similar
action.
A mandate of affirmative and continuing obligations implies expanding
and enlarging community reinvestment, not reducing the level of
community reinvestment. If you are serious about an obligation
to meet credit needs, you will propose additional community development
and data reporting requirements for more banks instead of reducing
existing obligations. Reverse your proposed course of action or
we will ask that Congress stop your efforts.
Sincerely yours,
Mary Compton, president
Unidos Para La Gente
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