The Center for
Rural Strategies
46 East Main Street  Whitesbur g, KY 41858
606/ 632 -3244  Fax 606/ 632 -3243
inf o @ruralstrate gies. o rg
PRESS RELEASE
FOR IMMEDIATE RELEASE
September 8, 2004
Contact: Tim Marema
tim@ruralstrategies.org
606/632-3244
CAMPAIGN LAUNCHED TO STOP THE FDIC’s EFFORTS TO CRIPPLE
THE COMMUNITY REINVESTMENT ACT
An ad in the Thursday, September 9, Washington Post kicks off a campaign by a national
coalition of community developers seeking to stop federal bank regulators from gutting the
Community Reinvestment Act.
“Will the president’s promise of an ownership society include rural America?” asks the
ad, which appears on Thursday's Federal Page in the Post. “Only if the FDIC stops messing with
the Community Reinvestment Act.”
The ad was placed by the Center for Rural Strategies, a rural nonprofit organization based
in Whitesburg, Ky., on behalf of community developers and civic organizations that want to
protect current CRA regulations.
“The Community Reinvestment Act has expanded the American dream to millions of
hard-working rural people, and it hasn’t cost taxpayers one dime,” said Dee Davis, president
Rural Strategies. “It’s regulation that works, but now just a few weeks before the election, these
folks at the FDIC seem to have made a deal to kill it.”
Groups opposing the regulatory changes will hold a press conference at 1 p.m. Thursday,
September 9, in Room 406 of the Dirksen Senate Office Building to explain the impact of the
proposed changes. Another round of ads begins Monday with placement in Roll Call’s annual
start-of-session edition.
The 1977 Community Reinvestment Act (CRA) requires banks to serve local people by
ensuring that some of their loans, investments, and services go to low and moderate income
communities. The FDIC has proposed a rule change that would exempt 80 percent of the banks it
regulates from complying with all of the act’s requirements.
Opponents say the rule changes will be especially harmful in rural areas, where there are
fewer banks and less investment. In fact, several of the more rural states would have all of their
banks become exempt if the proposed changes are implemented.
“The CRA has been one of the few effective tools in combating both the public and
private sector disinvestment that has taken place in rural America over the past 50 years, and we
cannot afford to lose it,” said Karl Pnazek, president of CAP Services, Inc., in Stevens Point,
Wisconsin. “This change would return us to the 1950s and ’60s, when lenders impoverished
whole communities as they took their savings and invested them in ‘hot’ real estate markets,
often far removed from the communities in which they were deposited.”
Pnaznek is part of Stand Up for Rural America, a network of rural community
development organizations that opposes the FDIC proposed changes.
“Changing CRA would be a disaster for rural families,” said Sharon Walden, executive
director of Stop Abusive Family Environments (SAFE) in Welch, West Virginia, and another
member of Stand Up for Rural America. “Without the rules, what could we do for the 73-yearold man living in a camper without running water? Probably nothing. How could we have
started to rebuild after two 500 year floods? I just don’t know.”
The FDIC’s change in CRA regulations would exempt all but the largest banks from
undergoing complete CRA exams. Currently, banks with less than $250 million in assets are
exempt from the examinations. The FDIC changes would raise that threshold for exemption $1
billion in assets. The change would reduce the number of FDIC regulated banks that would
undergo complete examination from 1,110 to 219, according to the Senate Banking Committee.
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