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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations


University Neighborhood Housing Program

September 17, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St. NW 20429

RE: RIN 3064-AC50

Dear Mr. Feldman:

On behalf of the University Neighborhood Housing Program (UNHP) we urge you to withdraw your proposed changes to the Community Reinvestment Act (CRA) regulations. UNHP is a nonprofit Community Development Financial Institution in the Northwest Bronx. CRA has been extremely instrumental in our work over the past two decades to create, preserve and finance affordable housing. We feel that the proposed changes are likely to weaken CRA and negatively affect the positive steps that have been taken as part of implementation and enforcement of the Community Reinvestment Act. We believe that the revision will affect approximately 20 banks operating in the New York area.

CRA has been a powerful and successful tool for revitalizing low- and moderate-income communities and supporting affordable housing. CRA also can be pointed to as one the principal driving forces behind increased homeownership and economic development in these formerly financially underserved communities. Our communities experienced the disappearance of bank branches and service in the eighties and nineties; more recently, we have seen an upsurge in the number of branches. We are convinced that CRA has played a role in this development. Our communities have a large number of working, low-income people; many are immigrants. The service test aspect of CRA is an encouragement to banks to meet the needs of the whole range of customers in our area. Revising CRA criteria on 29 more banks may result in a reduction in bank services at a time when our communities are re-building. UNHP is concerned that the FDIC’s proposed rule change to increase the asset threshold of “small banks” from $250 million to $1 billion will result in a significant reduction in affordable housing investment. As we did last April when the four bank regulators had a proposal to raise the threshold to $500 million, we urge the FDIC to maintain the current $250 million threshold for small banks.

Under the current CRA regulations, banks with assets of at least $250 million are rated by performance evaluations that scrutinize their level of lending, investing, and services to low- and moderate-income communities. The proposed changes will substitute a community development criterion for state-chartered banks with assets between $250 million and $1 billion. We simply do not see the need to make the proposed changes that may in fact result in banks’ withdrawing from some of their current community reinvestment activities and thereby negatively affecting affordable housing preservation and creation activities.

CRA is a critical component of affordable housing and community development activities occurring around the nation. The accomplishments related to CRA should not be taken for granted. We have been able to work closely with a number of banks in our community and we have developed good relationship with a number of bankers and institutions. However, we are fully aware that most of this bank cooperation is rooted in the Community Reinvestment Act. Especially, as we watch the number of banks dwindle and in some cases relationships developed over a period of years eradicated in seconds by mergers, we are convinced that it is more vital than ever to preserve and strengthen CRA.

Sincerely,

Jim Buckley, Executive Director
Gregory Jost, Deputy Director
University Neighborhood Housing Program

 

Last Updated 09/28/2004 regs@fdic.gov

Last Updated: August 4, 2024