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CITY OF CLEVELAND, OH
March 31, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St., N. W.
Washington, DC 20429
Re: Proposed Changes to the Community Reinvestment Act (CRA)
Regulations
Dear Mr. Feldman:
It is my understanding that the Federal Deposit Insurance Corporation
(FDIC) and other regulatory agencies are soliciting comments to proposed
changes to the CRA regulations. The proposed rules contain a mix of
welcomed changes and proposals that do not go far enough to improve
credit and related services to Cleveland’s residents and businesses.
We have been very engaged in predatory lending issues and how abusive
lending practices affect our constituents and neighborhoods. Our
citizens are financially stretched beyond their means, equity has been
stripped from their homes, foreclosures have tripled over the past
couple of years and our neighborhood groups have to increasingly fight
blight and abandoned homes.
The proposed regulations to provide an additional review by examiners
to compare the loan with the foreclosed value do not go far enough to
reduce abusive lending practices. There are other abusive lending
practices such as excessive fees that create abusive lending. I urge you
to reconsider how you can be more effective at reducing the number of
predatory loans through the exam process or other regulatory measures.
Many loans are made in our neighborhoods by lenders affiliated with
local financial institutions. These affiliate lenders may make loans
which could be termed abusive and therefore destructive to Cleveland’s
constituents. The covered financial institutions you regulate should be
judged by the sum of their parts and the public should know of these
relationships. As it has become increasingly difficult for the public to
discover these relationships, the FDIC should require public disclosure
of the affiliate/parent relationship and the lending record of the
affiliate. Obviously, the proposed requirement to report high cost loans
will have its greatest impact if all lending institutions are required
to report
Non-depository institutions do substantial business in Cleveland and
yet are not monitored for their business practices, as are banks with
local branches. I suggest the definition of assessment area be reviewed
in light of this increased banking trend.
I applaud the FDIC’s requirement to report originations and purchased
loans separately and report information on high cost loans made by
financial institutions. These changes will help us better understand the
financial services industry and the performance of local lenders.
The city of Cleveland is proud of our partnerships with local
lenders. Our partners have done much to increase access to capital
within Cleveland, to include loans and services to minority and
low-income persons and geographies. Our local lenders are large banks
but I certainly support efforts to ensure protections for all credit
worthy individuals to secure financing regardless of the size of their
city.
Please contact Estella Loar, Manager, Bank Relations at 216-664-4287
with any questions.
Sincerely,
Deb Janik
Chief of Staff
cc: National Community Reinvestment Coalition (NCRC)
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