Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official. 
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
Https
The site is secure. 
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
Federal Register Publications

FDIC Federal Register Citations



Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations




FDIC Federal Register Citations


From: JTaylor192@aol.com [mailto:JTaylor192@aol.com]
Sent: Monday, September 13, 2004 3:07 PM
To: Comments
Subject: Small Bank definition


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:

I am writing to express my concern that the FDIC may be unwittingly weakening the ability of working class Americans to use banks to build their wealth by acquiring assets. Having more banks under the streamlined CRA exam will only lessen the commitment of banks to serve underserved people.
CRA is vital for increasing homeownership and economic development in lower-income communities. However, your proposed changes would chill the various public-private partnership efforts now underway to develop low-income neighborhoods.

Today, banks with over $250 million in assets must be tested on their number of loans, investments, and services to low-and moderate-income communities. But your proposal would eliminate the investment and service requirements for all banks with under $1 billion in assets. This will result in significantly fewer loans and investments in affordable rental housing, health clinics, community centers, and economic development projects. Moreover, with no Service Test applied, low income communities can count on payday lenders, check cashers and pawn shops for their basic banking services. Low income people, those least able to afford more expensive products, will end up paying more for their basic banking services than wealthy people.

Your proposal to have mid-sized banks pick which community development activities they will undertake is not only unfair, but illegal. Right now, these banks must make community development loans, investments, and services. The law (CRA) give them an "affirmative obligation to meet the credit needs of the communities they're chartered to serve," and it specifically notes that this law includes low and moderate income neighborhoods. Loans, basic banking services and investments all constitute those 'needs' under the CRA. Your proposed test allows banks to choose only one of the three activities. This is contrary to what the law calls for. The law does not say they are chartered to meet one of several of the community credit needs, but rather the community's credit needs. They are not affirmatively obligated to pick and chose one community credit need. Your proposal not only goes against the spirit of this law, but actually directly contravenes the clear language that banks must meet the credit needs.

I would suggest that since your proposed changes would both subvert language clear in the law and do damage to efforts of low and moderate income Americans to build wealth and acquire assets, that you immediately withdraw your proposal in favor of a more balanced process that includes a lengthy discussion and public comment period. Given the importance and potential negative impacts of your proposal, to do anything less would be irresponsible.

Sincerely,

John Taylor
201 Stratford Street
West Roxbury, Massachusetts

 

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

Last Updated: August 4, 2024