Public Comment, CRA Q&A, Opportunity Finance Network, Mark Pinsky

Utto - Mbarham

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

5 pages

English

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

A propos
Informations
Extrait

Description

Informations

Publié par	Utto
Nombre de lectures	13
Langue	English

Extrait

September 10, 2007

Federal Reserve Board Office of the Comptroller of the Currency
E-mail: regs.comments@federalreserve.gov E-mail: regs.comments@occ.treas.gov
Jennifer J. Johnson, Secretary 250 E St. SW, Mail Stop 1-5
Board of Governors of the Federal Reserve Washington 20219
System RE: Docket ID OCC-2007-0012
20th Street and Constitution Avenue, NW
Washington DC 20551 Office of Thrift Supervision
RE: Docket No. OP-1290 E-mail: regs.comments@ots.treas.gov
Regulation Comments
Federal Deposit Insurance Corporation Chief Counsel’s Office
E-mail: Comments@FDIC.gov 1700 G Street, NW
Robert E. Feldman Washington, DC 20552
Executive Secretary RE: ID OTS-2007-0030
Attention: Comments
550 17th St. NW 20429
RE: RIN 3064-AC97

Re: Notice & Request for Comments: Interagency Questions and Answers for Community Reinvestment.

To Whom It May Concern:

1Opportunity Finance Network appreciates the chance to comment on the proposed Interagency
Questions and Answers (Q&A) regarding the Community Reinvestment Act (CRA). The CRA rule, effective
September 1, 2005, made significant changes to the regulations, and a clear Q&A is critical to guiding
banks and their partners.

Opportunity Finance Network commends the Agencies for including New Markets Tax Credit-eligible
Community Development Entities and New Market Venture Capital Companies as appropriate financial
intermediaries in several of the Q&As. We also strongly support that banks will receive favorable CRA
consideration for foreclosure prevention activities. This will assist in the battle against this nation’s
foreclosure crisis. In addition, clarification on the importance of branch building and maintenance will
help provide access to affordable banking services in low- and moderate-income neighborhoods that are
reaching crisis levels due to abusive payday lending and other high-cost services.

Specifically, Opportunity Finance Network offers comments that indicate ways the Agencies could clarify
the CRA’s intent to benefit low- and moderate-income people and communities. Our comments are in the
order of the specific proposed Q&As they reference.

1 Opportunity Finance Network, the national network of more than 160 financial institutions creates growth that is
good for communities, investors, individuals, and the economy. Its members include Community Development
Financial Institutions (CDFIs) and other opportunity finance institutions that work just outside the margins of
conventional finance to bring those markets into the economic mainstream and to help the economic mainstream
flow into those markets. CDFI financing has resulted in significant numbers of new jobs, jobs preserved, quality,
affordable housing units, and new commercial and community facility space in all 50 states. Over the past 30 years,
the Opportunity Finance industry has provided more than $23 billion in financing that would not otherwise have
happened in markets that conventional finance would not otherwise reach.

Sec. ____.12(g)(4), Sec. ____.12(g)(3)-1, and Sec. ____.12(h)-7

Sec. ____.12(g)(4): Opportunity Finance Network agrees with the Agencies in applying a “broader
geographic criterion when evaluating capital investments, loan participations, and other ventures
undertaken by that institution in cooperation with minority- or women-owned institutions or low-
income credit unions…” if the Agencies apply the criterion to community development financial
institutions (CDFIs) in addition to the other groups included. We urge the Agencies to include CDFIs
since many CDFIs, especially National CDFIs, meet the credit needs of local communities on a state
or regional basis. CDFIs are a recognized financial intermediary in the CRA and they are specifically
highlighted in Sec. ____.12(h)-1 as an example of community development loans.

2In 2005, CDFI customers were 52 percent female, 58 percent minority, and 68 percent low income.
3By statute, CDFIs must serve the low- and moderate-income communities referred to in the CRA.
4Both the statutory requirements and the actual performance of Treasury certified CDFIs support the
addition of CDFIs to this Q&A.

5CDFI certification is a designation conferred by the Department of the Treasury’s CDFI Fund. As a
certified CDFI, a financial institution must demonstrate that it has a primary mission of promoting
community development; that it provides financial products and development services to designated
distressed or underserved target markets; and that it maintains accountability to these markets.
CDFIs serve the same market interests as minority-owned financial institutions, women-owned
financial institutions, and low-income credit unions. CDFIs should be accorded the same treatment
under the CRA as these groups. This should be a minor inclusion, but will help solidify the unique
value of CDFIs in helping low- and moderate-income people and communities with their credit needs.
This is, after all, the purpose of both CDFIs and the CRA.

Sec. ____.12(g)(3)-1. For the same reasons suggested in the above Q&A, we suggest that you
add CDFIs to, “The agencies will presume that any loan to or investment in a CDFI, SBDC, SBIC,
Rural Business Investment Company, New Markets Venture Capital Company, or New Markets Tax
Credit-eligible Community Development Entity promotes economic development.”

Sec. ____.12(h)-7. For the same reasons suggested above, we urge the Agencies to include CDFIs
in this Q&A, “Community development loans and services and qualified investments to statewide or
regional organizations, SUCH AS A NATIONAL CDFI, which have a bona fide purpose, mandate, or
function that includes serving the geographies or individuals within the institution’s assessment
area(s) will be considered as addressing assessment area needs.”

2 The CDFI Data Project. (2007). “Community Development Financial Institutions (CDFIs): Providing Capital, Building
Communities, Creating Impact, Fiscal Year 2005.” www.opportunityfinance.net/store/product.asp?pID=81&c=34715.
3 The CDFI Fund was established by bipartisan legislation, the Reigle Community Development and Regulatory
Improvement Act of 1994, P.L. 103-325. See specifically, 12 USC 4701, “to promote economic revitalization and
community development through investment in and assistance to community development financial institutions.”
4 Supra at 1.
5n legislation, the Reigle Comm
Improvement Act of 1994, P.L. 103-325. Title I, Section 103 Definitions, (5) Community Development Financial
Institution. CDFI certification is focused on measuring the institution’s target market for evidence of poverty and its
community development mission. Applicants for CDFI certification must submit extensive documentation for
consideration by the agency before certification is granted.
CRA Q&A Comments 2
Sec. ____.12(g)(4)-2: Opportunity Finance Network is concerned that the Q&A offers CRA credit for
housing projects that do not include a low- and moderate-income component. Instead of, “will give
greater weight to those activities that are most responsive to community needs, including needs of low-
or moderate-income individuals or neighborhoods,” the regulators should use the language found in Sec.
____.12(h)-5, “may qualify…if the activities also provide housing for low- or moderate-income
individuals.”

Sec. ____.12(g)(4)(ii)-2. We suggest that the Agencies change this Answer to read, “The Agencies
generally will consider all activities relating to disaster recovery that revitalize or stabilize a designated
disaster area, but will give greater weight to those activities that are most responsive to community
needs, PARTICULARLY those of low- or moderate-income individuals or neighborhoods.” This small but
significant change would keep CRA activities focused on those the law intends to benefit.

Sec. ____.12(h)-3. This Q&A clarifies the treatment of home and small business loans in cases when
intermediate small banks do not publicly report these loans. Opportunity Finance Network agrees with the
Agencies that these banks can claim home and small business loans as either counting under their
lending test or community development test. If intermediate small banks were allowed to count these
loans for both tests, double counting would occur and the CRA rating would not accurately reflect service.

Sec. ____.12(i)-3. We commend the Agencies for including individual development accounts (IDAs)
with the examples of community development services. This powerful asset-building tool is often the first
step in financial literacy of the unbanked and should be included in the CRA examination consideration.

Sec. ____.22(a)(2)-6. If the Agencies will consider purchasing loan participations as well as
originations for the CRA examination, the examiners should separately analyze the two areas, giving
greater weight to originations than purchases. Loan originations are usually more difficult and most
directly responsive to borrowers’ credit needs.

Sec. ____.22(a)(2)-7. Opportunity Finance Network agrees with the Agencies that a l