Proposal for Development Rules Is Challenged

WASHINGTON, D.C., SEPT. 22, 2004 ( A U.S. bishops’ conference aide has urged the Federal Deposit Insurance Corporation to abandon proposed community-development regulations that would hurt people in low income and rural communities.

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John Carr, secretary for Social Development and World Peace, raised his concerns about Community Reinvestment Act (CRA) regulations in a letter to Robert Feldman, FDIC executive secretary.

«CRA has been an effective financial vehicle for rural and urban communities for decades,» the letter said.

«The proposed changes would substitute a less challenging criterion of community development for state-charted banks with assets between $250 million and $1 billion,» Carr said.

«This proposal would allow midsize banks to choose a loosely defined ‘community development activity’ rather than the current requirement of providing comprehensive community development activities needed by low- and moderate-income communities,» the episcopal conference aide said.

Carr warned that «the proposed community development criterion could result in fewer loans and a significant reduction in affordable rental housing investments.»

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