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NCRC Comments on CRA Exam

NCRC Organizes Community Groups to Protest Venture Bank’s Payday Lending

NCRC Comments on Staten Island

NCRC Comments on NetBank’s CRA Strategic Plan

NCRC Organizes Community Groups to Protest Venture Bank’s Payday Lending

The National Community Reinvestment Coalition (NCRC), the Consumer Federation of American (CFA), the Community Reinvestment Association of North Carolina (CRA*NC) and 65 other community groups, including several NCRC members, filed comments Friday, July 11 with the Federal Deposit Insurance Corporation in San Francisco in the Community Reinvestment Act review of a Washington state-chartered bank. The groups urged the FDIC to fail Venture Bank in its CRA exam for unsafe and unsound payday lending in partnership with Advance America in Alabama and Arkansas.

"Abusive payday lending does not meet credit needs because it saps wealth instead of enabling borrowers to accumulate wealth. High-cost payday lending is the antithesis of CRA’s mandate to serve credit needs in a safe and sound manner," states John Taylor, President and CEO of NCRC. The comment letter signed by NCRC, CFA, CRA*NC documented substantial safety and soundness and reputational risks associated with payday lending by Venture Bank including possible violations of the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair Debt Collection Practices Act, and other fair lending laws.

Read the CRA Comment Letter on Venture Bank. PDF File

NCRC Asserts that Staten Island Bank and Trust Does Not Meet Community Credit Needs

May 2003: The National Community Reinvestment Coalition (NCRC) and New York members of NCRC asserted in a letter to the Office of Thrift Supervision (OTS) that Staten Island Bank and Trust does not meet the credit needs of low- and moderate-income residents of the New York metropolitan area. The letter urged the OTS to downgrade Staten Island Bank and Trust on its upcoming Community Reinvestment Act (CRA) exam.

Passed in 1977, CRA is an anti-redlining law requiring banks and thrifts to serve all the communities in which they are chartered, including low- and moderate-income communities. Federal agencies assign banks and thrifts ratings ranging from Outstanding to Substantial Noncompliance based on their performance of making loans, investments, and offering services to low- and moderate-income communities.

Staten Island Bank and Trust received an Outstanding rating on its last CRA exam in 2000. NCRC and NCRC members in New York maintain that this rating is inflated since the thrift’s lending performance is at best "low satisfactory." In home purchase lending during 2001, all prime lenders, as a group, issued 12.4 percent of their home mortgage loans to low- and moderate-income (LMI) borrowers in the New York metropolitan area. Staten Island Bank and Trust issued just 6.2 percent of its loans to LMI borrowers, or half the amount, in percentage terms, of all prime lenders, as a group. In 2000, Staten Island Bank and Trust issued 4.4 percent of its home purchase loans to LMI borrowers while all prime lenders, as a group made 11.4 percent of their loans to LMI borrowers. Staten Island Bank and Trust’s performance in refinance lending was also poor in comparison to its peers.

In Manhattan, Staten Island Bank and Trust failed completely in serving LMI borrowers. From 2000 through 2001, the thrift and its mortgage company affiliate made almost 1,000 loans in Manhattan. Only two of their loans went to LMI borrowers. The unjustifiably narrow "assessment area" explains the thrift’s failure to serve LMI borrowers in Manhattan. The current CRA regulations allow banks and thrifts to declare "assessment areas" or geographical areas included in their CRA exams. Staten Island Bank and Trust had asked the OTS to exclude Manhattan from its assessment area. Although Staten Island Bank and Trust does not have branches in Manhattan, the CRA regulations state that assessment areas are to include areas surrounding branches receiving a substantial portion of the bank¹s or thrift’s loans.

NCRC and NCRC members based in New York believe that Manhattan and all of the New York metropolitan area must be part of the thrift’s CRA exam since the thrift makes a substantial portion of its loans in boroughs outside of Staten Island. If the OTS continues to allow the thrift to exclude Manhattan and the other boroughs of New York City, the OTS will be complicit in the thrift¹s failure to meet credit needs in all of the communities in which it does business. A more comprehensive exam of Staten Island Bank and Trust that holds the thrift accountable and does not let it off the hook will spur the thrift to make more loans to low- and moderate-income borrowers and communities.

The CRA comment letter of NCRC and NCRC New York members is available upon request and documents several other aspects of Staten Island’s lackluster performance including poor performance in making small business loans available to the smallest of the small businesses in LMI census tracts.

The NCRC members signing onto the letter were:

Irene Baldwin, Association for Neighborhood & Housing Development, NY, NY
Matthew Lee, Inner City Press/Community on the Move, Bronx, NY
Richard D. Marsico, Professor of Law, New York Law School

Read NCRC’s Comment Letter on SI Bank and Trust’s CRA Exam. PDF File

NCRC Comments on NetBank’s CRA Strategic Plan

NetBank is about to submit a Community Reinvestment Act (CRA) strategic plan to its regulator, the Office of Thrift Supervision. Under CRA, a bank or thrift can submit a strategic plan for regulatory approval instead of undergoing a traditional CRA exam. The strategic plan describes a lender’s goals for lending, investing, and providing services to low- and moderate-income communities. NCRC found NetBank’s draft CRA strategic plan to be forward-thinking in some important respects, but also to be deficient in terms of goal attainment. Our comment letter also address important CRA policy and examination issues.

Read NCRC’s Comments on NetBank’s CRA Strategic Plan. PDF File

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