To the Editor:

I make no efforts to disguise my belief that the Community Reinvestment Act is a flawed statute. Apparently, Mr. Matthew Lee doesn't much care for it either.

[Mr. Lee, executive director of Inner City Press/Community on the Move and the Inner City Public Interest Law Center, wrote the March 10 "Viewpoints" article "Revamp CRA Rules for Web Age."]

CRA is based on the notion that a bank should do business in the community where it is located. CRA was enacted in 1977 out of the concern that banks were not reinvesting in their local communities. The language of the statute plainly states as its purpose, that "regulated financial institutions have (a) continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered."

To say, as Mr. Lee does, that CRA requires a bank to do business wherever its customers are located - which could be around the globe - rather than where the bank is located would, in fact, undermine the very community basis of CRA, the foundation for the act itself. CRA would be meaningless if "community" were to be interpreted as anywhere in the United States where an institution happens to have a customer.

But it is understandable that Mr. Lee would advocate a national CRA. From his headquarters in the Bronx, he seems quite content to assert representation of the interests of communities in places like Atlanta, Wilmington, Chicago, and Miami.

For those who truly believe in CRA and its purposes, Mr. Lee's proposal would cause the downfall of the act, taking dollars out of our local communities and steering them wherever the politically advantaged may direct.

Phil Gramm

Chairman, Senate Banking Committee

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