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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations



SENATOR DENISE MORENO DUCHENY


August 31, 2004

Mr. Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th St. NW
Washington, DC 20429

Attention: Comments/Legal ESS

RE: RIN 3064-AC50 Dear Mr. Felman:

I am writing to express my strong opposition to the FDIC's proposal to raise to $1 billion the threshold for assets at which financial institutions will be subject to a full examination for compliance with the Community Reinvestment Act (CRA).

In essence, this proposal exempts mid-size banks with assets greater than the current $250 million threshold and less than the proposed $1 billion threshold from the Service and Investment tests of the CRA. This represents 95.7 percent of the state-charted banks your agency regulates.

As a result, such banks will no longer be required to invest in economic and community development activities that benefit low-income households. They will no longer be required to provide affordable banking services, and checking and savings accounts to consumers with modest incomes. They will no longer be required to respond to the service needs of immigrants such as low cost remittances overseas. Nor will they be required to maintain branches or provide other community services in low income communities.

This proposal flies in the face of the intent of the CRA that banks should serve all income groups in the communities they draw funds from. Moreover, there is no justification for this proposal given the fact that banks have proven they can make a profit providing such financing and services.

The proposal also allows financial institutions to claim credit for community development activities in rural areas that benefit any group of individuals, not just low- and moderate-income
individuals. This will allow banks to cherry-pick and focus on affluent residents of rural areas rather than the lower income consumers CRA targets.

Finally, you would also eliminate publicly available data on the small business lending of mid-sized banks. Without data, community groups and citizens cannot hold banks accountable for lending to small businesses in their neighborhoods.

As a California state legislator who represents low-income and immigrant-rich communities both in urban San Diego County and the rural Coachella and Imperial Valleys, I understand the critical financial needs of low-income individuals and businesses. Instead of decreasing access to community and economic development assistance, we desperately need to expand such access.

I urge the FDIC to rescind these proposed changes to the CRA regulations and renew its commitment to the goal of ensuring access to financial capital and services for low- and moderate-income communities across America.

Sincerely
Denise Moreno Ducheny

 

Last Updated 09/13/2004 regs@fdic.gov

Last Updated: August 4, 2024