Magazine article American Banker

D'Amato May Forgo a Rewrite of the CRA

Magazine article American Banker

D'Amato May Forgo a Rewrite of the CRA

Article excerpt

Senate Banking Committee Chairman Alfonse M. D'Amato said the panel may defer to the Clinton administration and leave the Community Reinvestment Act alone.

"I don't want to see a war that would prevent us from enacting all the good that's been done in this (regulatory relief) bill," the New York Republican said Tuesday.

The administration is adamantly opposed to new CRA legislation.

Sen. D'Amato's comment puts him at odds with Sen. Richard Shelby, R Ala., who said at a Senate Banking financial institutions subcommittee hearing Tuesday that the Clinton administration hadn't gone far enough in overhauling CRA rules.

Sen. Shelby, who chairs the subcommittee, and Sen. Connie Mack, R-Fla., are sponsoring a regulatory relief bill. Its provisions include exemption for small banks from the reinvestment law and a shield from community-group protests for institutions with good CRA ratings.

Bank regulators testifying at the hearing praised most of the reforms in the Shelby-Mack bill but were unanimous in urging legislators to keep their hands off the CRA rules.

"To take up CRA reform in the legislative sphere at this time will extend a period of uncertainty that banks, community groups, and regulators alike have been eager to bring to an end," Comptroller of the Currency Eugene A. Ludwig said.

"We would ask the Congress to give the new regulations a chance to prove that they can work," added Federal Deposit Insurance Corp. Chairman Ricki Helfer. She said the newly approved CRA regulation creates streamlined examinations as well as exemptions from data collection reports for small banks.

Ms. Helfer also argued that safe harbors for banks with good CRA marks are not needed, because in 1994 only eight out of 2,749 applications submitted to the FDIC were the subjects of protests. Bankers say community groups can tie up applications for months, even for institutions that received high CRA marks. …

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