Federal Deposit
Insurance Corporation

From: Louie, Ruth [mailto:R.Louie@bcdfc.com]
Sent: Wednesday, October 20, 2004 1:27 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

I am writing on behalf of Baltimore Community Development Financing Corporation (CDFC) to urge you to withdraw the proposed changes to the Community Reinvestment Act (CRA) regulations. CRA has been instrumental in creating affordable housing opportunities, increasing access of low- to moderate-income and minority citizens to banking services and affordable mortgage financing, and protecting our most vulnerable populations from predatory lending here in the state of Maryland, and Baltimore City in particular.

We are very concerned about the major elements of the proposed changes: 1) allowing a streamlined exam for banks with assets between $250 million and $1billion; 2) creating new community development criterion that would replace the separate lending, investment and service tests and permit consolidated investment by banks; and 3) an exemption from reporting small business lending.

From the perspective of a not-for-profit community development financial institution (CDFI) that relies on commitments from financial institutions to invest in its lending programs, the proposed change to utilize a new community development criterion could have a significant negative impact on our ability to raise funds to finance affordable housing development. As a result of reduced capital to make loans, our progress in expanding community development in low and moderate income neighborhoods and combating predatory lending practices would be substantially reduced. This further translates into less capital for community–based nonprofit housing organizations and small developers that lead the way in eliminating blight, creating affordable housing opportunities and increasing neighborhood stability.

Baltimore has made major strides in combating predatory lending. Public agencies, financial institutions, corporations and nonprofit agencies have worked together to create the Baltimore Homeowner Emergency Loan Program (HELP) which CDFC administers. HELP has helped hundreds of families threatened by predatory lending practices get relief. Commitments of financial institution capital are how we are able to refinance predatory loans into affordable mortgages for low- and moderate-income homeowners. With less capital commitments allowed with the proposed CRA changes, fewer families could be assisted. Rigorous fair lending audits and severe penalties on CRA exams for abusive lending practices must also be continued in order to ensure adequate protections against predatory lending.

Thank you for your attention.

Sincerely,

Ruth M. Louie
President and CEO
Baltimore Community Development Financing Corporation
36 S. Charles St, Suite 1510
Baltimore, MD 21201
410-727-8590 voice
410-625-1369 fax
R.Louie@bcdfc.com