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Banks should not be allowed to jettison community reinvestment responsibilities ... in the quest for profit. If these new regulations are allowed to stand ... Communities could eventually find themselves back in the dark ages of redlining and financial isolation.
New York Times
August 21, 2004
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For Immediate Release
Contact: Rachel Maleh
202-628-8866 or 301-717-7553 (cell)
FDIC’s Proposal Will Reduce Access to Credit in
Low- and Moderate-Income Communities:
National Civil Rights, Community and Consumers Groups Denounce Proposed Changes to CRA
Washington, DC - Sept. 7 - National civil rights, community and consumer groups will hold a press conference on Thursday, September 9th at 1:00 p.m. in the Dirksen Senate Office Building, Room 406 denouncing recent moves by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) to no longer require strong community investment responsibilities for 88% of savings and loans and 96% of state charted banks. The FDIC’s proposal to raise the "small bank" threshold to $1 billion will drive banks out of low and moderate-income communities. These actions threaten to dramatically decrease lending for homeownership and small businesses development, especially in small towns and rural areas.
Senator Paul Sarbanes (D-MD) and Congressman Barney Frank (D-MA) are also expected to attend.
At the press conference, the civil rights, community and consumer groups will release letters to the regulatory agencies urging them not to proceed with their plans and requesting meetings with the agencies.
The FDIC proposes to raise the asset threshold for "small banks" under the CRA regulation to $1 billion from $250 million. The proposed changes would allow about 5,000 banks - 96 percent of all FDIC-regulated banks - to receive a watered-down CRA exam that looks only at certain types of lending.
Recognizing the harm of these changes, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB) withdrew similar proposals.
If approved, these proposed changes will result in significantly fewer loans and investments in affordable rental housing, health clinics, women and minority entrepreneurs, first time homebuyers and economic development projects. Immigrants and other populations seeking to enter the financial mainstream will have more restricted access to affordable banking services. Communities across the country have benefited from CRA - more than 1 trillion dollars have gone to low- and moderate- income communities since1977.
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