FDIC Federal Register Citations

Community Housing Initiative

From: James Oleksak
Sent: Friday, August 27, 2004 3:00 PM
To: Comments
Subject: RIN# 3061-AC50

As a non-profit community development housing developer in rural Michigan
and in inner city neighborhoods, I count on CRA legislation to get local
financial institutions interested in participating in affordable housing
projects. Affordable housing projects generally serve new social and income
markets that most financial institutions do not see as potential market
segments. Low and moderate-income housing can be constructed with no more
risk than normal. Profit can be made on these projects. Probably not as much
as the normal housing development but profit can still be made by the
financial institutions. Please do not eliminate any CRA legislation that
would reduce or eliminate funding for affordable housing projects in low
income neighborhoods and communities. Too many financial institutions view
CRA legislation as a mandate for low income and minorities to steal money
from their pockets or at best a penalty tax because they have to spend money
on projects taht will fail.

In terms of modification of CRA legislation to address the compliance
concerns of small financial institutions, why not look at the Federal Home
Loan Bank model which has proven to be effective in promoting the
development of affordable housing. Smaller FDIC insured financial
institutions could simply set aside a certain percentage of their profits
that would be reserved for affordable housing projects developed by
non-profit organizations. The earmarked funds would be sent to FDIC for
distribution. FDIC could set up regional Community Development Offices that
could administer these set aside funds. The cost of CRA compliance by local
financial institutions could be reduced substantially. Funding allocations
could be made locally based on racial, income and family characteristics and
data. If you are interested in pursuing this alternative CRA possibility I
would be willing to help establish a model program to field test this CRA
strategy.

James Oleksak, Executive Director
Community Housing Initiative
119 North Main
Buchanan, MI 49107