STRENGTHEN OUR

COMMUNITIES

SEND A LETTER TO

KEEP CRA STRONG

The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Federal Reserve Board (FRB) are accepting public comment on their joint Community Reinvestment Act (CRA) exam proposal through May 10, 2005.  This joint proposal is an improvement over a Fall, 2004 proposal from the FDIC to allow banks under their jurisdiction to design their own CRA exams, but serious issues remain.

Background On FDIC-OCC-Fed Joint Proposal

You can take action today to protect CRA by sending a comment letter via e-mail that urges regulators to strengthen this joint proposal and prevent the law from being watered down.  Just follow the below directions.  Let the agencies know they must keep CRA strong and a force for positive reinvestment in our communities.

1. Below is a sample form letter.  Copy this text into your e-mail.

2. Address the e-mail to the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Federal Reserve Board (FRB): “regs.comments@federalreserve.gov, Comments@FDIC.gov, regs.comments@occ.treas.gov”.

3. Type in your name and address at the bottom of the letter.

4. Include the following subject line - "RE: FRB Docket No. R-1225, OCC Docket Number 05-04, FDIC RIN 3064-AC89".

SAMPLE LETTER:

SEND BY MAY 10, 2005

Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System

Robert E. Feldman, Executive Secretary, Federal Deposit Insurance Corporation

Office of the Comptroller of the Currency

E-mail:  regs.comments@federalreserve.gov, Comments@FDIC.gov, regs.comments@occ.treas.gov

RE: FRB Docket No. R-1225, OCC Docket Number 05-04, FDIC RIN 3064-AC89

To Whom it May Concern:

I urge you to enhance your proposed changes to the Community Reinvestment Act (CRA) regulations so that banks do not reduce their levels of branches, and community development loans and investments to low- and moderate-income communities.  Your proposal is an improvement from the one you issued last fall, but serious issues remain.

I am glad you dropped your earlier proposal to allow mid-size banks with assets between $250 million to $1 billion to offer either community development loans, investments or services.  Banks must be expected to engage in all of these essential community development activities in order to pass their CRA exams as your current proposal requires.  I still believe the current exam structure of separate lending, investment, and service tests is the most effective structure for maximizing the level of community development financing.  If you move to a new exam format, you must ensure community development financing does not decline.  You could compare past levels of community development financing to future levels after any changes to the CRA exam structure so banks are penalized if they significantly decrease their level of community development activities.  

Investments in affordable housing and economic development build wealth for families and communities and thus open up new markets for bank lending and services.  The importance of investments is one reason why you must carefully develop any final proposal regarding the CRA exam structure.

Deleting a separate test for services will result in CRA exams no longer holding mid-size banks accountable for the provision of bank branches and low-cost accounts in low- and moderate-income communities.  Payday lending and other high cost credit has increased in my community the last several years.  The last thing we need are CRA exams that no longer look at the number of bank branches in traditionally underserved communities.  Please add the provision of bank branches as a clear factor on your proposed CRA exams for mid-size banks.

I urge you to drop your proposed elimination of public data disclosure requirements regarding community development, and small business and small farm lending.  Mid-size banks are vital in many communities, particularly in medium-sized cities and rural communities.  The only way to hold them accountable for providing credit to small firms and for affordable housing and community development is if the CRA data remains publicly available.  The public as well as regulatory agencies will have no way to systematically measure the responsiveness of these banks to critical credit needs if you eliminate this data. 

You must not change the requirement that community development in rural areas must benefit low- and moderate-income areas and distressed communities.   I also urge you to apply your revised test to only banks with assets between $250 million to $1 billion.  If you use an inflation factor each year to increase the number of banks subject to the new and abbreviated CRA exam, you will reduce the range of bank financing and services flowing to communities that need them the most.

Sincerely,

Name:
Address:
City: 
State: 
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