Proposal for Development Rules Is Challenged

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."