NATIONAL HOUSING CONFERENCE
August 31, 2004 Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
Dear Sir:
Re: RIN 3064-AC50, Federal Deposit Insurance Corporation’s Proposed
Revision to the Community Reinvestment Act; Proposed Rule
On behalf of the National Housing Conference (NHC), I appreciate the
opportunity to comment on the Federal Deposit Insurance Corporation’s
(FDIC) proposed revisions to the Community Reinvestment Act.
The National Housing Conference is a nonprofit 501(c)(3) membership
association dedicated to advancing affordable housing and community
development causes. A membership drawn from every segment of the housing
community forms the foundation for NHC’s broad, nonpartisan advocacy for
national policies and legislation that promote suitable housing in a
safe, decent environment across the nation.
The Community Reinvestment Act (CRA) has been a powerful and
successful tool for revitalizing low- and moderate-income communities
and supporting affordable housing. CRA also can be pointed to as one the
principal driving forces behind increased homeownership and economic
development in these formerly financially underserved communities.
NHC is concerned that the FDIC’s proposed rule change to increase the
asset threshold of “small banks” from $250 million to $1 billion will
result in a significant reduction in affordable housing investment
across the nation and specifically in rural areas. We urge the FDIC to
maintain the current $250 million threshold for small banks.
Raising the small bank threshold to $1 billion would exempt thousands
of FDIC-insured banks from meeting the current CRA standard that
requires them to demonstrate investments and services in low- to
moderate-income areas. It is this exemption of approximately 2,000 banks
nationwide with assets of nearly $1 trillion that will drastically
reduce investment in affordable housing and other community development
activities.
Additionally, financial institutions with assets of $250 million to
$1 billion comprise substantial market share in rural areas and such a
change will mean that many rural communities and several states will not
have any institutions required to offer services and investments that
benefit low- to moderate-income communities.
CRA is a critical component of affordable housing and community
development activities occurring around the nation. While we understand
that this proposed change is intended to reduce regulatory obstacles, it
is doing so at the expense of those communities most in need of
reinvestment. NHC opposes the proposed increase in the asset threshold
of “small banks” and urges the FDIC to maintain the current $250 million
threshold.
The National Housing Conference is pleased to be able to submit these
comments. If further information would be helpful, please feel free to
contact me.
Sincerely,
Conrad E. Egan
President and CEO
National Housing Conference
1801 K Street, NW, Suite M-100
Washington, DC 20006-1301
Telephone: (202) 466-2121 ext. 224
Email: cegan@nhc.org |
