From: Lucy Gorham [mailto:lgorham@mdcinc.org]
Sent: Thursday, October 14, 2004 10:17 AM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50
Dear FDIC,
EITC Carolinas works with a wide network of community organizations that are
helping low and moderate income families access federal tax credits and then
tie those credits to programs to bank the unbanked and build assets. We are
opposed to the proposed changes in the Community Reinvestment Act
regulations that affect mid-sidized banks. The community development
criterion would be seriously deficient as a replacement for the investment
and service tests. Mid-size banks with assets between $250 million and $1
billion would only have to engage in one of three activities: community
development lending, investing or services. Currently, mid-size banks must
engage in all three activities.
Under your proposal, a mid-size bank can now choose a community development
activity that is easiest for the bank instead of providing an array of
comprehensive community development activities needed by low- and
moderate-income communities.
The proposed community development criterion will result in significantly
fewer loans and investments in affordable rental housing, Low-Income Housing
Tax Credits, community service facilities such as health clinics, and
economic development projects. It will be too easy for a mid-size bank to
demonstrate compliance with a community development criterion by spreading
around a few grants or sponsoring a few homeownership fairs rather than
engaging in a comprehensive effort to provide community development loans,
investments, and services.
Certainly the joint goals of alleviating regulatory burden and keeping
investment within a local community can be achieved without such sweeping
and negative changes to the existing law. Please reconsider, and thank you
for considering our views.
Sincerely,
Lucy Gorham
Director, EITC Carolinas
MDC
PO Box 17268
Chapel Hill, NC 27516-7268
(919) 968-4531 Fax: (919) 929-8557
