[Congressional Record Volume 140, Number 139 (Thursday, September 29, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
             COMMUNITY REINVESTMENT IMPROVEMENT ACT OF 1994

                                 ______


                           HON. MARGE ROUKEMA

                             of new jersey

                    in the house of representatives

                     Wednesday, September 28, 1994

  Mrs. ROUKEMA. Mr. Speaker, today I am introducing legislation which 
would amend the Community Reinvestment Act of 1977 in order to make 
addition funds available for low and moderate income housing in certain 
distressed neighborhoods.
  The Community Reinvestment Act was passed by the Congress in 1977 to 
curb the disinvestment in certain communities by insured depositories. 
The intention of the law was, in part, to ensure that lending 
institutions did not ignore the credit needs of certain communities in 
their home areas.
  Over the years, however, we have seen the departure of most, if not 
all, lending institutions from certain distressed communities. These 
decisions were often good business decisions but they did leave very 
large gaps in the availability credit in those areas.
  Under current law, if a local lender originates or participates in an 
affordable housing loan outside of its designated CRA lending area, the 
lender does not receive full CRA credit for that investment. My 
legislation would allow the appropriate bank regulator to grant full 
CRA credit for these types of activities.
  Recently, in my State of New Jersey, the Federal Homes Loan Bank of 
New York, in cooperation with the New Jersey Savings League, 
established what has become known as the Regional Lender Consortia. 
This consortia, consisting of 86 members, acting through a lending 
organization known as the Thrift Institutions Community Investment 
Corporation (TICIC), is providing funding for low-income housing 
projects throughout the entire State.
  At this time, the TICIC is processing loans for some $150 million in 
low- and moderate-income housing projects.
  Despite the initial interest in this program, most of the 
participating institutions cannot receive full CRA credit for their 
participation because of the current CRA law. Consequently, they are 
reluctant to commit additional funds beyond their initial contribution.
  Passage of my legislation would assure institutions that no matter 
where they were located or what their defined geographic lending area 
was, they could receive full CRA credit for the amount of funds they 
contribute to the consortium's effort.
  Passage of this legislation could pave the way for many millions of 
dollars in loans for low- and moderate-income housing in many more of 
our communities so desperate for development and so in need of credit.
  Mr. Speaker, many criticize our private sector financial institutions 
for not making credit available to our communities most in need. Often, 
this criticism is just not justified. The New Jersey Regional consortia 
is just the kind of proof that our lending institutions want to help. 
To encourage their greater participation, I believe this simple change 
in the CRA law is all that is needed. I urge the passage of my 
legislation.

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