From: Josh
Donovan
[mailto:jdonovan@ucedc.com]
Sent: Thursday, April 01, 2004 1:01 PM
To: Comments
Subject: Dear Officials of Federal Bank and Thrift Agencies:
Dear Officials of Federal Bank and Thrift Agencies:
Union County Economic Development Corporation urges 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. Proposed changes would halt the progress
made in community reinvestment, facilitate predatory lending and reduce
the ability of the general public to hold financial institutions
accountable for compliance with consumer protection laws. Proposed
changes will eliminate the investment and service parts of the CRA exam
for banks and thrifts with assets between $250 and $500 million,
translating into considerably less access to banking services and
capital for underserved communities. For example, these banks would no
longer be held accountable for investing in Low Income Housing Tax
Credits -- a major source of affordable housing. Proposed CRA changes
will actually perpetuate abusive lending. The proposed standard states
that loans based on the foreclosure value of the collateral, instead of
the ability of the borrower to repay, can result in downgrades in CRA
ratings. This standard would fail to cover many instances of predatory
lending. These proposed changes regarding streamlined exams and the
anti-predatory lending standard threaten CRA's statutory purpose. CRA is
too vital to be gutted by harmful regulatory changes and neglect. On
behalf of the communities we represent, thank you for your attention to
this critical matter.
