FDIC Federal Register Citations

From: Laura Weinbaum [mailto:lauraweinbaum@projecthome.org]
Sent: Wednesday, October 20, 2004 2:28 PM
To: Comments
Subject: Community Reinvestment -- RIN 3064-AC50

The Community Reinvestment Act has arguably been the nation's most significant community revitalization initiative. Before the law, many banks engaged in discriminatory red-lining practices by choosing not make mortgage and business loans to people in poor and predominantly minority neighborhoods. After the law, banks were held accountable to a higher and tougher standard, forcing them to actively pursue lending, investment and other activities in poor areas. In New York, for instance, the law has been instrumental in financing a Pathmark on 125th Street - the first full-size supermarket in Harlem - and the Harlem USA shopping area, as well as the rehabilitation of hundreds of dilapidated apartments in upper Manhattan, the Lower East Side, the Bronx and Chinatown.

The proposed changes to the CRA by the FDIC would greatly curtail housing investment and lending as well as retail services in low and moderate income areas. Many rural areas in particular will be left without a covered institution. And in urban areas, fewer institutions will concern themselves with CRA activities. In addition, smaller institutions are often more responsive to local needs – at least while they have CRA forms to complete.

The CRA must be maintained intact.

Laura I. Weinbaum