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NCRC E-newsletter - May 6, 2004
May 6, 2004
***Featured in this issue:
NCRC Member Organizations Speak Out at Hearings on Chase/Bank One Merger in Spite of Chase’s 11th Hour Pledge
After sending in over a hundred comment letters, NCRC members were able to raise their concerns regarding the JP Morgan Chase and Bank One merger at public hearings conducted by the Federal Reserve Board in the past weeks. A new issue arose when Chase announced a ten-year pledge of $800 billion during the first hearing in New York. However, community groups are skeptical regarding this commitment, as it will include middle-income consumers with median incomes in addition to low- and moderate-income borrowers. *Moreover, the pledge lacked enough detail to enable the general public to ascertain whether it represents an increase in Chase’s and Bank One’s prime lending to minorities and low- and moderate-income borrowers.
Two issues that have remained a major concern for NCRC members include the banks’ high cost lending and their support of payday lenders. When Chase was specifically asked why they were not making small loans to consumers in areas saturated with payday lenders, officials made vague comments. Bank One officials also maintained their stance that if payday lenders were not breaking the law, they would continue to lend to them. *Legal payday loans can nevertheless be abusive. *The Federal Reserve Board is expected to make a decision on the merger within the next month or so. For more information contact, NCRC Research Analyst Noelle Melton at email@example.com or at 202-628-88666. ***
NCRC Fights OCC Preemption in Congress
NCRC coalesced with U.S. PIRG, Consumer Federation of America, Consumers Union, and the National Consumer Law Center to ask Congress to overturn the Office of the Comptroller of the Currency’s preemption of state anti-predatory laws for national banks. *Senator John Edwards (D-NC) has introduced Congressional resolutions (S.J. Res.31 and S.J. Res. 32) to overturn the OCC’s preemption. *NCRC, along with our allies, wrote a letter circulated to all members of Congress strongly supporting Senator Edwards’ resolutions.
The OCC’s rules effectively get rid of all state legislative and enforcement authority, leaving inadequate federal law to protect consumers from predatory lending and other harmful abuses initiated by national banks and state licensed non-bank operating subsidiaries. *NCRC members are urged to contact their members of Congress asking them to co-sponsor these resolutions. For further information, please contact Crystal Ford at firstname.lastname@example.org or at 202-628-8866. *
NCRC Opposes Regulatory Streamlining and Argues for Upgrade of Fair Lending Laws
As required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996, the federal banking agencies asked for public comments by April 20 regarding consumer protection and fair lending laws. **NCRC urged that the federal banking agencies retain their regulations concerning Fair Housing, Equal Credit Opportunity Act (ECOA), Home Mortgage Disclosure Act (HMDA), Truth in Lending Act (TILA) and Unfair or Deceptive Acts or Practices. *
Under EGRPRA, the federal agencies must identify "outdated" regulations. *The incomplete data collection under HMDA and ECOA is outdated and frustrates the purpose of these statutes to prevent discrimination. *NCRC called on the Federal Reserve Board to amend its regulation implementing ECOA and allow banks to voluntary collect race and gender information for borrowers of small business loans. *In addition, the federal agencies must not limit the consumer protections currently available under these regulations. *Any streamlining of these protections would interfere with the agencies’ ability to fulfill their statutory obligations to eliminate discrimination in lending. *For more information, contact Josh Silver, Vice President of Research and Policy, at email@example.com or 202-628-8866.
NCRC Says OCC Plan for Public Database on Banks Must be Enhanced
In response to a request for public comments, NCRC told the Office of the Comptroller of the Currency (OCC) that its proposal to create a public database on operating subsidiaries of national banks does not compensate for its recent preemption rulings. *The proposed database, nevertheless, could be useful for anti-predatory lending enforcement only if the OCC enhanced the quality and quantity of data on operating subsidiaries. *For example, NCRC asked the OCC to compile a comprehensive log on the number of consumer complaints received by the OCC and state agencies for the operating subsidiaries and their national bank parents. *For more information, contact Josh Silver, Vice President of Research and Policy, at firstname.lastname@example.org or 202-628-8866.
New NCRC Member Organization Fights Bank Merger in the South
Enterprise Corporation of the Delta/Hope Community Credit Union fought this month, with help from NCRC's research department, the merger of Regions Financial Corp. and Union Planters Corp. *Based on data provided by NCRC, ECD/HOPE made the argument that the merger would be detrimental to the banks' customers for three primary reasons: *1) *Regions’ subprime affiliate made a disproportionate amount of subprime loans to low- and moderate-income and minority borrowers, even compared to other subprime lenders, 2) Regions' small business lending (particular loans less than $100,000) falls far behind its peers, and 3) Regions had a low level of participation in community reinvestment lending and investment opportunities. *
Thanks to technical assistance provided by NCRC, ECD/HOPE will also be submitting comments on Regions' performance to the Federal Reserve Board for consideration in the bank's next CRA exam. NCRC welcomes ECD/HOPE to the coalition, and will be working with them in their effort to bring economic justice to the Delta.
COHHIO Fights Unizan/Huntington Merger in Ohio
The Coalition on Homelessness and Housing in Ohio (COHHIO) used data provided by NCRC to oppose the merger of Unizan and Huntington Banks in Ohio this month. *COHHIO's major points of contention were with Unizan, particularly the bank's low levels of lending to minority borrowers and census tracts and to low- and moderate-income census tracts. *Unizan typically makes about half of the percentage of loans to minority borrowers and census tracts that its peers make. *Meanwhile, Huntington balked at informing the general public which of 10 branches it intends to close as a result of the merger. *For more information, contact Jon Hill, NCRC Research Analyst, at email@example.com or 202-628-8866.
NCRC Speaks at Two Conferences on Predatory Lending
During the week of April 26, Josh Silver, NCRC Vice President of Research and Policy, spoke at two policy conferences dealing with predatory lending issues. *At a forum in Washington, DC, Mr. Silver told the National Conference of State Legislatures that federal enforcement of fair lending and CRA has declined in rigor at the same time that federal agencies are preempting state law. *Mr. Silver cited weak enforcement during the recent megamergers, on CRA exams, and a lack of Department of Justice lawsuits. *
At the Fair Housing Association of Connecticut, Mr. Silver compared federal anti-predatory law to Connecticut law, pointing out how the federal law provided considerably fewer specific protections. *He also reviewed NCRC’s data analysis of high cost lending trends in Connecticut and Hartford, pointing out that safeguards in state law are critical to protect minority and low- and moderate-income communities, which receive a disproportionate amount of high cost lending. *Responding to the argument that a plethora of state and local laws choke off responsible subprime lending, Mr. Silver cited industry trade papers asserting that subprime lenders made a record $332 billion in loans during 2003. *For more information about the NCRC study of lending in Connecticut, contact Noelle Melton or Josh Silver at 202-628-8866.
Financial Education Train the Trainer Event reaches Maximum Capacity *
The next Financial Education Train-the-Trainer Event will be held on May 19-20 in Rochester, New York, at the RIT Inn & Conference Center. The NCRC training event is in partnership with Rural Opportunities, Inc. and sponsored by Citigroup Foundation. *Due to overwhelming interest, the event has already reached maximum capacity; however, you can contact Jean Lipani from Rural Opportunities Inc. at 585-340-3359 to be placed on waiting list for the next available training. **Full capacity and continued interest for this Train-the-Trainer Event shows the importance of financial education for our communities. *
NCRC Train-the-Trainer events provide financial education training to all organizations that understand its usefulness and importance in the communities they serve. *The NCRC Financial Education curriculum covers a wide variety of topics that low- and moderate-income communities can use to empower their financial well-being. For more information regarding Financial Education Training, please contact NCRC at (202) 628-8866.
NCRC Participates in Nationwide Service Project
On Friday, April 16th, several of NCRC’s AmeriCorps *VISTA’s and staff members participated in the 16th Annual National Youth Service Day (NYSD). Amanda Bernard, Sarah Brennan, Claire Gibson, Jonathan Hill, Suby Kavalam, Noelle Melton, Payal Pandit, Chad Phelan, Nicole Salemno, and John Taylor cleaned up Heritage Park in Washington, DC as part of a direct service project for NYSD. *Noelle Melton commented, "...it (NYSD) complemented our work here at NCRC very well; while our efforts did not have to do with economic justice directly, I thought it gave us a great first-hand view of the need for community and economic development in Washington, D.C." *With the help of Washington Parks and People, they were able to do extensive park cleanup and beautification.
National Youth Service Day is the largest service event in the world, mobilizing millions of young Americans to identify and address the needs of their communities through service. National Youth Service Day is also an opportunity to support youth on a life-long path of service and civic engagement, and educate the public, the media and elected officials about the role of youth as community leaders.
NCRC Welcomes New Additions to Staff
NCRC welcomes back Michelle Dickens to our Training and Technical Assistance Team. *Michelle will serve as our Director of Training, a position she held previously with NCRC. *She has co-authored several modules of NCRC's renowned Financial Education Curriculum and has a background in Workforce Development. *
NCRC also welcomes aboard Carolyn Donell as Western Regional Director in the NCRC Los Angeles office. *Carolyn brings an extensive background in community development work with a primary focus on small business development in low- to moderate-income communities. She has worked for various non-profit economic development organizations throughout Los Angeles County providing technical assistance, loan packaging, and loan underwriting services.
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