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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations




LA FAMILY HOUSING CORPORATION


August 15, 2004

Donald E. Powell
Chairman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

John M. Reich
Vice Chairman
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Thomas J. Curry
Director
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

John D. Hawke, Jr.
Comptroller of the Currency
Office of the Comptroller of the Currency
250 E Street, SW
Washington, DC 20219

Dear Sirs:

LA Family Housing Corporation (LAFH) is a private nonprofit 501 (c) 3 organization formed in 1983. We provide emergency shelter, transitional and permanent affordable housing, all combined with supportive services, to over 74,000 homeless and low-income individuals and families in Los Angeles. LAFH designs, develops, owns and manages a portfolio ,consisting of 417 units. Between 1987 and 2003, LAFH has completed 20 development projects, including new construction and rehabilitation, single family housing, multifamily rental housing, and single-room occupancy units. We currently have over 400 units, both rental and homeownership, in our development pipeline.

Because of our involvement in helping families rebuild their lives as well as our extensive affordable housing development work, we are a direct example of the positive impact that the Community Reinvestment Act (CRA) has made on strengthening America's communities by requiring insured depository institutions to use their deposits to meet the credit needs of low- and moderate-income (LMI) communities.

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, and we urge you not to adopt it.

While we understand that the OTS ruling is intended to help reduce 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 LMI 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 be 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.

David S. Grunwald
Chief Executive Officer
LA Family Housing

 

Last Updated 09/14/2004 regs@fdic.gov

Last Updated: August 4, 2024