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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

Neighborhood Recovery Community Development Corporation

September 20, 2004

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

RE: RIN 3064-AC50
Dear Mr. Feldman

On behalf of Neighborhood Recovery Community Development Corporation (NRCDC), I am writing to you to express opposition to the Federal Deposit Insurance Corporation's proposal which would weaken the Community Reinvestment Act and raise the asset threshold for "small banks."

The proposed rules to revise the definition of a "small bank" raising the asset threshold to $1 billion will negatively impact community development investments in low- and moderate-income areas. Any increase to the threshold of what is considered to be a small bank would relieve many of our community's partners from the requirements currently in place. Financial institutions will feel less pressure to explain how they have served their local communities. Thus they will not be held accountable for responding to the credit needs of small businesses, especially minority-owned businesses. As a result, I believe that there will be significantly fewer loans to and investments in affordable housing, health clinics, community centers, and economic development projects while these banks continue to accept the deposits of the residents of these communities.

The Community Reinvestment Act was intended to encourage depository institutions to help meet the credit needs of the communities in which they operate. Presently, those banks subject to the CRA must demonstrate that they provide both services and investments that benefit low and moderate income households and neighborhoods in their communities.

The proposed changes would greatly diminish banks' obligation to reinvest in their communities. This proposal is directly the opposite of CRA's mandate of imposing a responsibility for banks to actively participate in meeting the needs of the people. The participation of financial institutions to meet these needs is critical to changing the many years of redlining and discrimination that has bankrupted our inner cities and many rural areas. There is more than ample evidence to prove that widespread discrimination by institutions still takes place even today.

Many working class and working poor communities have benefited from the Community Reinvestment Act. Close partnerships have been developed with banks on a variety of community and economic development projects and investments that produced positive results for the City of Houston. 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. We must have the continued partnering of the banking community leveraged by the government programs to provide safe and decent housing for the low- and moderate-income communities. In order to ensure the continued growth and sustainability of community development and its ability to provide services to traditionally underserved and unserved markets throughout this state, as well as this country, it is essential for the FDIC to withdraw its proposal to change the Community Reinvestment Act and maintain the small bank definition at $250 million.

Sincerely,
Paul D. Charles Executive Director


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

Last Updated: August 4, 2024