I'd like to provide the facts about how the Senate's financial services legislation would affect the Community Reinvestment Act (CRA) ["Whose Financial Data?" editorial, June 29].

First, through a bipartisan amendment, the legislation provides that CRA-related agreements between banks and community groups will be made public. Most of these agreements are secret, including the terms of the grants to community groups. By making the agreements public, members of the community and the press will be able to learn how CRA grants and loans are made and spent.

Second, the legislation would put muscle in the CRA examinations conducted by regulators. Any bank that receives three satisfactory ratings in a row would be presumed to be in compliance with CRA at the time of mergers or branch openings. Anyone who thinks otherwise still could challenge the bank, but he would have to have evidence of a CRA problem.

Third, the legislation would exempt small, rural banks from CRA requirements. In 16,380 exams in the past nine years, only three of these banks were found in substantial noncompliance. Making small-town bankers and regulators jump through CRA hoops makes no sense.

Far from weakening CRA, as the editorial suggests, these common-sense reforms would add accountability, integrity and relevance to the process.


U.S. Senator (R-Tex.)

Chairman, Senate Banking Committee