From: Judith Turnock [mailto:JTurnock@liscnet.org]
Sent: Thursday, September 16, 2004 3:19 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
I'm writing to oppose the FDIC's proposal to allow banks with assets
between $250 million and $1 billion to be included with small banks for
purposes of the Community Reinvestment Act's exam requirements. Since
only 6% of FDIC-regulated banks exceed the $1 billion mark and are thus
subject to full exams of lending, investments and services, affordable
housing across the nation will suffer immediately and far into the
future.
Working with the Center for Community Change in Washington in 1977, I
was on the team of original drafters of CRA (although not the later act
with the enforcement provisions). Later (in 1987) I founded a community
development corporation in the South Bronx. CRA was a truly grassroots
strategy — and quite a brilliant one — for reversing the bank, insurance
and appraiser practices of redlining, practices born largely out of
ignorance and fear rather than solid economics. It has changed the face
of America — allowing for the reclamation of vast areas of formerly
dilapidated and/or abandoned areas — and the quality of life for
millions of American families. It is an example of democracy at its
best.
Over the years I have worked with many bankers. They all honestly and
openly — without any prompting — state that CRA is the only reason their
banks are involved in community development. It is not hard to predict
their response to exemption from the FDIC's full exam provisions: the
investments will stop. Some states will have NO banks subject to the
full exams and therefore will be without investment in their low and
moderate income communities. Because the Office of Thrift Supervision
already has such a rule, it is also not hard to predict that every other
agency regulating financial institutions will follow suit.
This FDIC proposal would immediately and permanently reduce lending,
investments and services in low- and moderate-income communities. That
result is not in America's short term or long term interest. We need to
continue as we always have, building an even greater middle class by
improving the quality of life for the greatest number of people. That is
what has made America stable and will keep it stable, the role model for
the rest of the world. This proposal is a step in the wrong direction,
immediately for low-and moderate-income communities but ultimately for
all of America.
Judith L. Turnock
New York, NY
