The Consumer Federation of America (CFA) and a number of other consumer groups are calling for the Federal Deposit Insurance Corporation to withdraw proposed rule changes to the Community Reinvestment Act (CRA). "These changes, along with similar new rules recently adopted by the Office of Thrift Supervision, would have a devastating impact on access to credit and affordable banking services for the residents of low and moderate income in urban and rural communities," the CFA said.
"This is the wrong time for the FDIC to be weakening standards when communities across America have witnessed dramatic increases in predatory lending and other abusive financial services practices that thrive due to the lack of mainstream bank activity," said Allen Fishbein, CFA's Director of Housing and Credit Policy.
The FDIC has proposed rules to quadruple (to $1 billion) the minimum asset size that triggers a more stringent CRA review. The result: an additional 900 banks will no longer be required to adhere to more comprehensive CRA standards. The FDIC proposal would mean that only about 4% of FDIC-supervised banks (223 of 5,291), and only 1% of banks in rural areas, would undergo the full CRA examination.
