CRA Comment Letter

The Office of Thrift Supervision has changed its definition of community development to be consistent with the three federal banking agencies.  This definition of community development now includes financing that benefits geographical areas recovering from natural disasters and middle-income census tracts in distressed and under-served rural counties.

The National Community Reinvestment Coalition (NCRC) had succeeded in convincing the three banking regulators to increase their emphasis on the needs of low- and moderate-income families in the Q&As.  The OTS has proposed to adopt the banking agencies Q&As, so it is important to tell the OTS to also keep the focus on low- and moderate-income families.

Finally, this is an important opportunity to remind Director Reich of his comments at the NCRC annual conference that the OTS is seriously thinking about revamping the agency’s harmful changes to CRA exams for thrifts.  Please urge Director Reich to take the next step and change their CRA exams.

The comment period ends June 12.  Below is a draft letter from NCRC; you may copy the letter, edit, personalize in the places noted and add where you see fit. Send your comment letter to regs.comments@ots.treas.gov.  Include No. 2006-17 in the subject line of the e-mail and include your name and telephone number.

***DRAFT NCRC letter to the Office of Thrift Supervision on the Q&A for CRA***

June x, 2006

Regulation Comments
Chief Counsel’s Office
Office of Thrift Supervision
1700 G St. NW
Washington DC 20552

RE:  Attention No. 2006-17
To Whom it May Concern:

(YOUR ORG’s NAME) appreciates that you are proposing to make the OTS’ definition of community development consistent with the definition of the other banking agencies.  We believe that, if implemented rigorously, that the proposed changes to community development will benefit low- and moderate-income families in rural areas and communities recovering from disaster areas.

Just like the three banking agencies, the OTS has amended its CRA regulation to provide CRA points for thrifts if they finance community development in designated disaster areas and middle-income census tracts in distressed and underserved rural counties.  Also, just like the three other agencies, the OTS’ proposed questions and answers (Q&As) clarify that more CRA points will be awarded for financing community development if the community development meets the needs of low- and moderate-income families.

When the National Community Reinvestment Coalition commented to the banking agencies, they had asked the regulatory agencies to insert phrases like “particularly” meeting the needs of low- and moderate-income families in the Q&A’s dealing with community development.  They believed that this emphasis would fulfill CRA’s statutory purpose of replacing redlining of low- and moderate-income communities with an affirmative obligation imposed on depository institutions to serve low- and moderate-income communities.  Although the banking agencies did not insert phrases like “particularly,” the agencies also did not reduce or eliminate references to low- and moderate-income families and communities as recommended by the banking trade associations.  In order to fulfill CRA’s mandate, the OTS must also keep the constant attention on the needs of low- and moderate-income families and communities in the Q&As.  We join NCRC in saying that we are pleased the OTS has proposed Q&As that are virtually identical to the Q&As of the banking agencies.

In an effort to further establish consistency with the banking agencies, we urge the OTS to modify its recent changes to the CRA exams and regulations for savings and loans above $250 million in assets.  When Director John Reich addressed NCRC’s annual conference in March, Director Reich indicated that the OTS is seriously considering making its CRA exams and regulations consistent with the recent changes of the banking agencies.  Uniform exams and regulations are very important to establish consistent expectations of rigorous CRA exam regardless of the charter held by a depository institution.  Uniform exams and regulations had been the standard for all of CRA’s history until the last couple of years.  We urge the OTS to go back to a uniform standard.

Thank you for this opportunity to comment.  If you have any questions, please feel free to contact me at (INSERT YOUR PHONE NUMBER)

Sincerely,

(YOUR NAME)
TITLE
ORGANIZATION