FDIC Federal Register Citations

Jewish Community Action

From: Vic Rosenthal [mailto:vic@jewishcommunityaction.org]
Sent: Monday, October 18, 2004 10:07 AM
To: Comments
Subject: CRA Regulations

From: Vic Rosenthal
Sent: Monday, October 18, 2004 at 9:00 am
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

To whom it may concern:

Jewish Community Action (JCA), a nonprofit organization in Minnesota, is writing to oppose the proposed rule changes by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) to offer “streamlined” testing under the Community Reinvestment Act (CRA), to institutions up to $1 billion in assets, because they will harm affordable housing and community and economic development in LMI communities. For five years, JCA has been working with small community based banks committed to economic development in urban areas. These banks meet the CRA threshold for small banks and we do not want to relax standards for similar sized banks.

CRA was enacted to encourage federally insured financial institutions to meet the credit needs of their
communities, including [low and moderate-income) persons. Communities and nonprofit corporations
partner with banks to leverage limited federal subsidies with private capital for meeting communities’ needs.” The proposed rule would raise the small bank threshold from $250 million to $1 billion, which could significantly reduce investments in low and moderate income communities. This action would eliminate 750 billion in Bank assets and nearly 90% of banks from CRA responsibility. A small bank threshold change from the FDIC would mean approximately 2,000 FDIC-insured institutions would have to meet a much less rigorous CRA standard that does not require investments and services in low and moderate income areas.” In Minnesota, it is anticipated that the 36 Minnesota banks currently under the CRA requirements would be reduced to just four banks, thereby potentially reducing the community reinvestment taking place.

This action at the same time resources at state and federal level are shrinking or disappearing fails to understand the current budget realities in most states and local communities. The concepts and values that created CRA are being aborted.

Jewish Community Action, and its more than 600 members, are committed to economic development and housing rehabilitation in inner city communities. The current CRA threshold is critical to hold banks in the $250 million to $1 billion range more accountable to their communities. Those banks meeting the threshold are providing important investments to inner city communities and should not have the accountability requirements reduced. This is the wrong time and the wrong action.

Please rethink this action and do not raise the threshold. Thank you.

Vic Rosenthal
Executive Director
Jewish Community Action