January 9, 2006
Office of the Comptroller of the Currency
250 E. K Street, SW
Mail Stop 1-5
Washington, DC 20219
Re: Docket Number 05-17
Jennifer J. Johnson, Secretary
Board of Governors of the Federal Reserve
20th Street and Constitution Ave., NW
Washington, DC 20551
Re: Docket No.OP-1240
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
RIN number 3064-AC97
To Whom it May Concern:
The Sierra Club appreciates this opportunity to comment on the proposed
Question and Answers document.
The CRA is an important tool in overcoming blight and in particular will
play a critical role in empowering low income consumers and minority
businesses to participate in the rebuilding of the Gulf.
We would like to emphasize that access to private capital by consumers and
small businesses in blighted and disaster impacted areas is essential to
any effort to foster a healthy and equitable recovery.
Accordingly we request that you add a Question and Answer indicating that a
bank will automatically undergo a fair lending exam to test for compliance
with federal anti-predatory and anti-discrimination law when the bank or
one of its affiliates makes a high concentration of subprime loans to
minorities, the elderly, women, low-income borrowers or to communities
recovering from natural disasters and experiencing shortages of credit.
You have clarified how banks will receive favorable consideration in their
Community Reinvestment Act (CRA) exams for financing community development
activities in geographical areas impacted by natural disasters. While we
are pleased that the federal agencies direct banks to focus on low- and
moderate-income families in areas impacted by disasters, we are opposed to
the diversion of bank financing to middle- and upper-income housing.
We are pleased that the agencies are proposing that banks will receive
points on their CRA exams for financing community development in
geographical areas impacted by disasters for up to one year after the
expiration of official federal or state designation of disaster status.
also applaud the agencies for providing more credit to community
development activities that are most responsive to the needs of low- and
moderate-income individuals that have been impacted by the natural
disaster. Your proposal to provide CRA points for investments that benefit
families displaced by disasters promises to be very beneficial to areas
receiving a large influx of families resettling in the wake of Hurricane
Katrina and future natural calamities.
An effective way to expand access to credit and to needed financial
services and products for underserved borrowers is implementing rigorous
and comprehensive CRA exams. Your responsiveness to our comments on the
proposed Question and Answers, will ensure that banks will continue to
lend, invest and provide financial services for low- and moderate- income
families and communities.
Thank you for consideration of our comments.
Deputy Legislative Director