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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

NEIGHBORHOOD LENDING PARTNERS, INC.

From: Graves, Mary [mailto:mgraves@nlp-inc.com]
Sent: Wednesday, September 15, 2004 11:00 AM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

Neighborhood Lending Partners, Inc. is a partnership between banks, thrifts, local governments, and the affordable housing community. Our members are banks, and thrift institutions throughout the state of Florida. Membership in NLP gives these institutions a way to support affordable housing while sharing the costs and risks. Our members are comprised of 97 insured depository institutions. Since 1992, NLP has provided more than $163 million in funds for building and/or for rehabilitating more than 7800 units of affordable housing. Membership in NLP also enhances institutions’ ability to meet community credit needs, in accordance with the Community Reinvestment Act.

NLP, like many other successful, nonprofit providers of affordable housing throughout the country, relies on our bank partners as sources of private capital to leverage limited federal subsidies. The Community Reinvestment Act encourages local institutions to assist in the creation and expansion of small business, and the revitalization of neighborhoods, and rural areas previously considered unbankable. The CRA is vital to achieving investment in these underserved areas.

We understand that the FDIC shortly will consider a proposed rule change by the Office of Thrift Supervision (OTS) to increase the asset threshold for the CRA small bank exam from $250 million to $1 billion. We believe this proposal could have negative consequences for hundreds of communities, including many in rural areas, and we urge you not to adopt it.

While we understand that the OTS ruling is intended to help reduce the regulatory burden for small banks, no studies have been conducted on the potential benefits – or harm- of such a change. There is considerable evidence to believe that proposal could have severe, unintended consequences for the flow of much needed private capital and services to LMI communities.

If the FDIC adopts the OTS’ proposal, 2000 fewer insured institutions, with assets of nearly $1 trillion, would have far less impetus to provide investments and services in low- and moderate-income communities – and an estimated $5 billion that would have been available, under the current rules, for affordable housing and community development over the next few years would be lost. Because institutions with assets between $250 million and $1 billion comprise a substantial market share in rural areas, the proposed change also means that in some states and many communities there will no longer have any insured institutions with a CRA impetus to invest in affordable housing, tax credits, and even financial literacy training.

As Federal resources for affordable housing and community development continue to dwindle, our nation’s poorest communities can ill-afford to lose billions of dollars in private investment and services. We urge FDIC not to move forward with OTS’ proposal, and we urge all 4 bank regulatory agencies to continue to consider rule changes that update CRA for the communities the Act is intended to serve.

Sincerely,

Debra S. Reyes
CEO

Last Updated 09/15/2004 regs@fdic.gov

Last Updated: August 4, 2024