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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

HUMILITY OF MARY HOUSING INC.

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429

RE: RIN 3064-AC50

Dear Mr. Feldman:

As a not-for-profit affordable housing provider and an agency that benefits from the investments made by the area's local financial institutions, I urge you to withdraw your proposed changes to the Community Reinvestment Act (CRA) regulations. CRA has been instrumental in increasing homeownership, boosting economic development and expanding small businesses in the nation's minority, immigrant and low and moderate-income communities. Your proposed changes are contrary to the CRA statute and Congress' intent because they will slow down, if not halt, the progress made in the community reinvestment.

Under the current CRA regulations, banks with assets of at least $250 million are rated by performance evaluations that scrutinize their level of lending, investing and services to low and moderate-income communities. The proposed changes will eliminate the investment and service parts of the CRA exam for state-chartered banks with assets between $250 million and $1 billion. In place of the investment and service parts of the CRA exam, the FDIC proposes to add a community development criterion. The community development criterion would require banks to offer community development loans, investments and services.

The community development criterion would be seriously deficient as a replacement for the investment and services 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 could 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.

Here in the state of Iowa, 296 of the 297 banks regulated by the FDIC would be exempt from the stricter "three-part test". The effect of removing that many banks from the need to engage in all three levels of lending and services will be devastating to Iowa's rural areas as well as its larger urban communities.

The consequences for low and moderate-income communities is that CRA examiners will no longer expect mid-size banks to maintain and/or build bank branches in their communities. Mid-sized banks will no longer make sustained efforts to provide affordable banking services, and checking and savings accounts to consumers with modest income. Mid-size banks will also not respond to the needs for the growing demand for services needed by immigrants which is a growing population in Iowa.

In summary, your proposal is directly the opposite of CRA's statutory mandate of imposing a continuing and affirmative obligation to meet community needs. Your proposal will dramatically reduce community development lending, investing and services. You compound the damage of your proposal in rural areas, which are least able to afford reductions in credit and capital. You also eliminate critical data on small business lending. Two other regulatory agencies, the Federal Reserve Board and the Office of the Comptroller of the Currency, did not embark upon the path you are taking because they recognized the harm it would cause.

CRA is too vital to the production and maintenance of affordable housing to be gutted by regulatory fiat and neglect. Please reverse your proposed course of action, or we will ask Congress to halt your efforts before the damage is done.

Sincerely,
Sandra Walters
Humility of Mary Housing, Inc.
1228 E 12th St
Davenport, IA 52803

Last Updated 10/04/2004 regs@fdic.gov

Last Updated: August 4, 2024