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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

September 17, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ISS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429-9990

Re: RIN 3064-AC50

Gentlemen:

I am writing to oppose weakening current guidelines relating to the Community Reinvestment Act. Just yesterday I met with my bank pursuant to my request for a loan to purchase a 25-year old Section 8 housing development for the elderly. The project is located in a low-income area in the south suburbs of Chicago, and therefore the loan is one which banks would not look on particularly favorably. I had initiated the contact with my loan officer, but she referred me to the bank’s Community Reinvestment person. The meeting with the CRA person had a totally different feel than a similar meeting would have had with the commercial or real estate lending people at the bank. For the latter, this loan would have been an annoyance. They would have dealt with it only if they believed it was necessary to keep a long-time client. For the CRA people, on the other hand, this is a desirable loan which immediately grabbed their attention. They were not only interested and responsive, but they understood the intricacies of Section 8 contract renewals, tax-exempt bonds for affordable housing and other assisted-housing esoterica that the commercial and real estate lending officers in the bank are totally unaware of.

In recent years banks have prospered despite – or perhaps to some extent because of – current CRA regulations. If the paperwork or the program regulations can be streamlined without negatively effecting the program goals, that would surely be desirable, but to let even a single bank ignore its responsibility to its community would detract from the program goals without any corresponding commensurate benefit.

I did my first Low Income Housing Tax Credit deal just after the law was passed in 1986 and I did my most recent one this summer. I can assure you that the Community Reinvestment Act has been a major factor in the success of that program. Weakening CRA would be a mistake. Just as the well-intentioned crack-down on real estate tax losses in the Tax Reform Act of 1986 contributed in no small measure to the savings and loan debacle of the subsequent years (which cost the Federal government far more than any tax breaks for building owners), weakening the Community Reinvestment Act will undoubtedly have unintended consequences which negatively impact our communities to a far greater extent than the cost of banks filling out a few more forms.

Thank you for your consideration.

Sincerely,
Sheldon L. Baskin

Last Updated 10/01/2004 regs@fdic.gov

Last Updated: August 4, 2024