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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

UNITED STATES CONFERENCE OF CATHOLIC BISHOPS

September 16, 2004

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

RE: RlN 3064-AC50

Dear Mr. Feldman:

On behalf of the United States Conference of Catholic Bishops, I urge that you withdraw the proposed changes to the Community Reinvestment Act (CRA) regulations. The Bishops' Conference has strongly supported the disclosure of lending patterns since legislation was first introduced in 1975. The Catholic Church—with parishes and agencies across the nation—believes that people must be permitted access to information about the lending practices and patterns of the financial institutions in their communities that seek their business. CRA has been an effective financial vehicle for rural and urban communities for decades. Low and moderate income families of all races and ethnicities have benefited from CRA with increased opportunities to purchase homes, open small businesses, or operate farms. The success of local communities gaining access to private capital should not be jeopardized. The proposed changes will dramatically reduce the ability of communities to monitor and promote community reinvestment.

Currently, banks with assets of at least $250 million are rated by performance evaluations that scrutinize their level of lending, investing, and services: within low- and moderate-income communities. The proposed changes would substitute a less challenging criterion of community development for state-charted banks with assets between $250 million and $1 billion. This proposal would allow mid-size banks to choose a loosely defined "community development activity" rather than the current requirement of providing comprehensive community development activities needed by low- and moderate-income communities.

Many believe, and we fear, that the proposed community development criterion could result in fewer loans and a significant reduction in affordable rental housing investments. Community service facilities and economic development projects would falter from lack of financial support, as mid-size banks no longer maintain or build branches in low- and moderate-income communities. Families in these communities would lose access to affordable banking services.

People in rural communities especially would be disadvantaged by the new regulations that propose to consider any kind of community development activities in rural areas as meeting CRA requirement regardless of whether they focus on low- and moderate-income individuals or not. This would allow banks to focus on affluent residents of rural areas, diverting community development activities away from the low- and moderate-income communities and consumers that CRA is designed to help.

I urge you to withdraw and reconsider how best to strengthen—not weaken—CRA's affirmative obligation of banks to meet credit needs. We seek to expand and enlarge community reinvestment. The regulations, as proposed, are likely to result in a significant reduction in the level of community reinvestment.

Sincerely

John L. Carr, Secretary
Department of Social Development and World Peace
United States Conference of Catholic Bishops
3211 Fourth St., NE
Washington, DC 20017

Last Updated 10/04/2004 regs@fdic.gov

Last Updated: August 4, 2024