FOR IMMEDIATE RELEASE
ICBA Supports Regulatory Plan to Update CRA; Calls for Banking Agencies to Make Some Changes
Washington, D.C. (Sept. 10, 2007)—The Independent Community Bankers of America (ICBA) supports the federal banking agencies' proposed updates to the guidance community bankers use to implement the Community Reinvestment Act (CRA), and recommends several changes to offer community banks additional flexibility to carry out the rules.
"The changes will help clarify the application of the rules and make it easier for community banks to understand compliance requirements," said Karen Thomas, ICBA executive vice president and director of government relations. "ICBA welcomes the changes and looks forward to continuing to work with the agencies to ensure community banks can continue serving their communities without unnecessary burden."
In its letter to four banking regulators, the association noted that:
- ICBA strongly supports favorable CRA consideration for banks that work with borrowers facing foreclosure in the current real estate market. Community banks generally do not engage in the practices that have created the problems facing many communities across the county as foreclosure rates rise. Community banks are well-capitalized and ready to be part of the solution to the problem.
- ICBA supports the ability of community banks to receive CRA credit for supporting minority- and women-owned institutions outside their investment areas, but encourages the agencies to stress that priority be given to activities that benefit the bank's own assessment area.
- ICBA supports the consolidated list of activities considered to benefit community development, such as the Small Business Administration 504 program, and encourages the agencies to continually promote the existence of these programs to banks they supervise along with the fact that favorable CRA credit is available and how banks can participate in these programs.
- ICBA supports the option that allows community banks to invest in pooled funds of investments or loans and still receive CRA credit and encourages the agencies to carefully evaluate how these funds are treated. Allowing some banks to receive exclusive CRA credit for segregated portions of the pooled fund under "side letters" undermines the purpose and goal for pooling the funds in the first place.
Read the complete letter at www.icba.org.
The Independent Community Bankers of America, the nation’s voice for community banks, represents 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve. For more information, visit www.icba.org.