Community Reinvestment Act Reform: How Did We Get Here and Where Are We Going?
Welcome to the consumer finance monitor. Podcast where we explore important new developments in the world of consumer financial services. And what they mean for Your Business Your customers and the industry. I'm your host. Alan Complaints Ski. I share the Consumer Financial Services Group Ballard SPAHR and I am very pleased to be moderating today's program before I introduce our very special guests today. Let me just remind you that our consumer financial services group It communicates with you through various Media in addition to our podcast we also have our blog which is also called consumer finance monitor riposted our blogs since two thousand eleven when the CFP got stood up We also regularly hosts webinars on subjects of interest to those in those of you in the industry. So if you want to subscribe to our blog or to get on the list for Webinars you just visit us on our website. Ballard SPAHR DOT COM. If you like our podcast today please let us know about it. You can leave us a review on apple podcast. Google play or whatever platform. You used for your podcasts. So today I'm very pleased that I'm joined by our special guest Kenneth Thomas as I will refer to Kenneth to him. Is Ken before I recite Some of your very impressive accomplishments can let me welcome you to consumer finance monitor. Thank you how it missed a pleasure to be here talking about my favorite topic okay. So can who has. The doctorate is by many accounts. The Nation's leading expert and author on the Community Reinvestment Act or will refer to it by its acronym CRA. He has testified before. Congress on numerous occasions advised regulators all the prudential banking regulators the OCC FDIC Federal Reserve Board on CRA. He's trained Federal Bank Examiners and he has written numerous articles and two books on CRA including the CRA Hambach many of its recommendations in the Hamburg were implemented into current CRA regulations. Most recently. He was asked by the Treasury Department. And some individual bank regulators and members of Congress for his input on CR a reform. He's worked with banks regulators and even community groups in a consulting capacity. Sense the nineteen seventy seven. Cra Law was established. He's also launched an acted as chair of the board of trustees of two different nationwide. Cra Investment Mutual Funds including the Community Development Fund. You can get more information on that at. Www Dot community development fund dot com that was launched in two thousand April two thousand sixteen and goes under the ticker symbol of C D C D X. Canas Community Bank for nearly twenty years And also Most notably received his doctorate from the Wharton School of the University of Pennsylvania Where he taught banking and finance for forty two years. That is my Alma Mater Ken. Unfortunately I graduated from Pan. I hate to say it from the Wharton School. Got By be out there before you began to teach their can is also a regular speaker and writer for in the banking industry mainly for the American Bank her but he's appeared frequently on. Abc Radio Bloomberg Radio and TV CNN CNBC MSNBC nightly business news and P. R. So again a very warm welcome to. You can't thank you so this is how we're going to proceed. Today I've tried to Scope out with Kellyanne The easiest way to explain to wire listeners the history of the CRA And the evolution of the CRA. As I mentioned during my intro it was the Nakd it in nineteen seventy seven longtime ago. Things were a lot different at that time it was before there was such a thing as the internet or online banking And there was really no interstate. Banking to speak of of that time and indeed Very unusual at that time for companies to be offering banks to be offering their products by even by mail or telephone crossing state lines. That that shows you know what the situation was like back. Then but I'm GONNA go back there to nineteen seventy seven and we'll save from nine hundred seventy seven CANTU nineteen eighty nine. What can you share with us about the origins of CRA with Senator Proxies Meyer? Who I think was. It would be considered the architect of that law. Well first of all Thank you again for this opportunity to discuss my favorite topic yes. Senator Proxy Meyer from Wisconsin was the author of this act and he pushed very hard on it and there were many people. Are that fought Amman. It most particularly the banking industry Even the Federal Reserve they considered at the time of form of credit allocation They did not want it. The industry did not want it however community groups mainly in Chicago one of them in particular the National Training Information Center N. I see with gale's Inkatha. She was very concerned about redlining. And Red. Lining was very prevalent during that period. And it's important to point out that relining the way it's used in. Cra is based on redlining a low and moderate income area based on income characteristics. Not Racial Characteristics. There's a very big difference between the CRA which focuses on income particularly low and moderate income and laws discriminatory laws like the E. coli That referred to racial discrimination. That's often confused. And for that reason is clear that Sierra was not a civil rights yet but merely a law very simple long to say that banks when they consider credit bus consider their entire community including lower moderate income areas did not say banks have to make a loan does not say they have to make bad loans. It just says they have to consider their entire community when making alone and this was considered credit allocation by the Federal Reserve. They pushed hard against it but Saturday. Approx Meyer Chairman of Senate Banking Committee up until Nineteen eighty-eight. Basically got this through and in one thousand nine hundred eighty eight basically I would say from. Nineteen seventy seven to nine eighty nine. The period you mentioned on the law sat dormant. No one really knew about it because the ratings were public the information was no one's hands and nothing really happened until one thousand nine hundred nine okay And then in nineteen eighty nine. What What happened then. Well most major bank regulations in our country are as a result of a major financial crisis for example the Great Depression the great recession. And at that time we had the crisis if you remember Eighty eight eighty nine ninety and we had fire which was the SNL bailout. We had two congressmen. Actually I had the opportunity to work with them. Briefly Henry Gonzales from Texas and Joe Kelley From Boston. They pushed through an amendment. That said yet we're GONNA do the bailouts with Ria but we're gonNA require that a portion of CRA exam be made public along with the CRA rating. This was the first time in history of banking going back to the National Banking Act of eighteen fifty or even before then that any bank rating was made public and of course being a student of banking Since the sixties I became very thrilled with that and I immediately decided to look at every exam that was being made available to the public starting July one hundred ninety so that was the watershed year for CRA. Not when it was passed in nineteen seventy seven one thousand nine hundred eighty nine when fiery required the readings to be made public. That's when everything turned around. Yeah well now Prior to that Were there were. Cra ratings although they were being made public But was we're the banking regulators using those ratings in assessing whether bank should be allowed to merge with another bank or should be allowed to branch. Were they being taken into consideration at that point or did that happen in nineteen ninety? That actually happened Later with some amendments however because the ratings were not public from nineteen seventy seven to eighty nine there were no community groups that could provide input and complain about him remember a Continental Illinois in nineteen eighty nine. We had one of the first major denials on Sierra Grounds At that time Being with the merger so there were there were some enforcement but it was very lax because the community groups were not involved and I think it's important to point out something I noted in my first book. I call the CRA triangle. Where I I use the acronym C to refer to community groups art to the regulators and a forced it. America's banks thrifts. So I want side. You have the community groups representing the community on the other side. The other side of the field you had the industry and the regulators kind of in the middle like a referee. They are there to balance it however when community groups are not involved and they don't have the opportunity to comment on a rating because it's not public. Nothing happens on that side. So that's why from nine hundred seventy seven to eighty nine without the publication of these Ravens The law basically was dormant right. Then things started to happen as you point out. Nineteen Ninety to nineteen ninety five but let's fast forward now to nine hundred ninety six and the twenty years from that date. What happened after that What reforms occurred. And how were you involved them as Senator Proxima contacted me nine hundred thousand nine hundred ninety one? The early nineties and out. When I was writing my first book he liked the fact that I had the first evaluation of literally a few thousand exams that were made public from nineteen ninety. Two nine thousand nine hundred ninety. Two and I found there was a lot of grade inflation. A lot of problems with it and bankers are not happy with the law Especially when the raiders were being made public a lot of banks failing maybe ten fifteen percent of them and so in nineteen ninety-five. We had a major reform. This reform actually started with senator proxy. Meyer introduced me Gene Ludwig at the time the comptroller and the OCC took the lead on reforming cra from a process based approach to more of a performance based approach so in three different sets of reforms. Ninety three ninety four ninety five. They finally figured out the formal reform. And that's the one thousand nine hundred five that went into effect the nineteen ninety-six. We're dealing with now. Those reforms that went into effect in ninety six are the ones that we have in place as of this woman. Okay And so what has happened. Have the community banks and the regulators worked with the ninety five rags. How has that worked well again? There was a lot of problems. A lot of dissension. The banks were not happy at the time in the early nineties I stated in my first book. Cra was no doubt the least like banking law of all remember bank. It is the most heavily regulated industry in the World American banking and this was the most hated law by far as a result banks wanted some change the FDIC the OCC and at the time the Federal Home Loan Bank board predecessor of the Ot us. They were pretty much together but the Federal Reserve again challenged the first set of reforms that came out ninety-three again in ninety four and finally they agreed pop something in ninety five and as a result those reforms were agreed upon by all the four regulators at the time and we went forward from there. Okay now I'm going to go to two thousand seventeen We have the election in two thousand. Sixteen president trump prevails. We have a lot of new faces at the financial regulators And by that time There is a lot of opposition to see Among the industry I know because my clients had to deal with. Cra All the time whenever they were being examined For Cra compliance. Or if they needed to get regulatory approval for a merger or they wanted a branch and at that time you know by now we got You know Online banking is. You know is everywhere. We've got some banks that only operate online We've got Interstate banking is you know been going on for decades at that point with banks issuing credit cards all over the country and offering all kinds of products lending products all over the country. Why has cra been such a top priority for the trump administration? The first reason was when trump was elected. Of course everybody knew he was a businessman and that was one of the reasons why he was elected. Not a not a lawyer all of the previous regulators for the most part they really not business people so he brought in treasury secretary pollution. Who was Work WITH THE BANK FORMER BANK BANKER. Comptroller audion both of them worked together with one west. The big institution that took over Indiana in California and then of course the head of the FDIC. She came from Fifth Third Bank. And even Jay Powell came from Wall Street so these are business. People familiar with how the laws worked rather than just being outside. You know. Politicians are lawyers not understanding the real days hard work involved. Cra and in particular secretary and Comptroller audion had some issues with the CRA. When they were doing the indy Mac one west especially the sale and as a result they came to Washington and they were very concerned about it. They had firsthand experience with it and they wanted to do two things they wanted to. First modernize law because as you mentioned a lot has changed since one thousand nine hundred five to the present over thirty years roughly and that second of all most importantly they wanted to make some improvements in it especially where community groups could come in and hold up a merger and some of these community groups which I outlined in my book Unfortunately some community groups work more for the group than for the community and they came in with every time there was a merger they would request a require some cra plan a merger community benefits plan. Which is not required by CRA so it almost became an unwritten rule that to get a major merger approved like with the Sun deviant merger juist that they had to come up with a big multi billion dollar plan but it was not required and CRA. So they wanted to make that process a little more industry-friendly and also mind helping the community so they decided to make that a top priority for both treasury and for the OCC okay And You were involved At that time you were invited. I believed to consult with The Treasury Department of about it to express your views on CRA reform And What what what we're What was your advice to point can. Yes I was contacted by Treasury a few times Went to Washington. I met with them and I basically explained to them that first of all. Cra to a large extent was very different than it was during the the nine hundred ninety. Five reform bankers a lot of learn to live with it. Ninety eight percent of banks were getting passing ratings. Which is the case today and CRA where at one time it was one of the most expensive regulations? It was no longer the case a Federal Reserve Bank of Saint Louis. Study done a few years ago concluded that by far the most expensive regulation and bank in his BSA CRA ranks down number six at only seven percent of compliance costs versus a twenty one percent. Three times that amount for BSA so they wanted to make cra a little bit better but not totally reformed so my main message to Treasury was CRA is working it needs a tune-up and used to be modernized for sure to account for Internet banking digital banking brushless banks but it needs to be tuned up. It does not need a major overhaul. It needs a tune-up that was my main message to them. At the same time I was also contacted by the Congressional Black Caucus to discuss with them. their options because they were looking at potential reform to in the event the regulators. David get it right. They wanted to have. They're kind of plan. B In a in effect so I at the same time was consulted with them. Okay and then the Finally the comptroller of the currency In two thousand eighteen issued in advance notice of proposed rulemaking What was in that advanced knows I take it. They asked a lot of questions at didn't really indicate what direction they were going in. Am My right exactly and There were at the time importantly this a NPR advance. Notice a public rulemaking was put out only by the OCC which was very unusual because ninety five all of the three different steps of those reforms were put out by the agencies together all forum in this case the OCC acted unilaterally which was very unusual but they went ahead with it because they wanted to keep moving forward as a result we got about fifteen hundred comments and comparison with the ninety five reforms. We got over fourteen thousand comments here. We got fifteen hundred comments with the a NPR about twenty. Two percent of them came from the banking industry and the risk came from the general public. Yeah so How come the comptroller did it alone? Why at that point did how come the Fed in the FDIC didn't join in the NPR? Both of the other agencies had their own mindset on where they felt Sierra was going and what it was doing they generally reflected the views of a lot of people in the industry that CRA was working fine again. Ninety eight percent of the banks were passing. It was not out heavy regulatory costs. It was number six the lists compared to other regulations and for the most part it was working everyone agreed. It needs to be modernized. But there's a very big difference between modernizing the law to account for digital banking and then totally overhauling or reform in it and the OCC was pretty much of the latter mindset they wanted to major overhaul versus the FDIC but especially the Fed. They wanted more. Everybody wanted to modernize it but they wanted more a tweaking improvement of the law rather than a major overhaul of it. Okay all right. We're now in a twenty twenty. The comment period very recently closed in April. How many comments were received this time? can't well the NPR had fifteen hundred comments and the NPR which by this time the FDIC joined along with the OCC but the Fed was still on its own. The comments are still coming in by last count. We got a approximately nineteen hundred fifty comments but this time around whereas the banking industry had twenty two percent of the comments in the amp are they only had nine percent of the comments this time so less than a half of the comments came from banks and most of them were not happy with the MPR. Most of the community groups are not happy at almost across the board. Almost all and I read all these One thousand nine hundred and fifty comments. Almost all of them were critical of the NPR. And I had submitted five of my own comments With my criticism as well well looks before we get to your criticism can what is in the the Notice of proposed rulemaking. The most important part of it I believe is the modernisation part I like to think of the NPR in two parts the modernisation part to Batard is it to account for bracelets banks and then the improvement slash. Overhaul part I was in favour most banks. You're in favor of a kind of a tune-up improvement. But the Aussie went to a very far along step. More extreme step of total overhaul the modernisation step in the NPR is quite good basically saying that any branchless bank mainly the credit card banks in Wilmington Salt Lake City Sioux falls that deposit them all over the country when out how a CRA Gatien in those communities where they get more than five percent of their deposits as long as more than fifty percents of their deposit base comes from outside of their local assessment area. Which is basically the local county in either Wilmington Salt Lake City. A Sioux falls so this was very good. This was a very important To me the most important part of the NPR. Because it was requiring these banks and these are big. Big Banks. With in my estimation having about one point six trillion dollars on deposits those three states those three states by the way only account for about one point two one point five percent of population to businesses in the country but represent thirteen percent ten times that amount in deposits because they're taking deposits from all of our big cities like New York. La Phillies Chicago. Miami and putting the crm benefits in those three communities and that is not right because CRA is about reinvestment so that part of the NPR. If properly understood was the most important part of it What else was in there in that? Npr and particularly I part of it that You're critical about yes. Currently we have six different exam procedures which are importantly designed to adjust the size of the banks and the different business models. You know being on the Board of a bank for twenty years. I can tell you as a community banker. You have a very different outlook on things than you would. For a large banker especially one of the big money center banks so under the current rags we have separate procedures for small banks it banks which are roughly three twenty six million to one point three billion in assets and large banks so we have three size categories of banks then we have separate exam procedures for Wholesale Banks Limited purpose banks and what we call the strategic plan bags in total there are about a hundred of these latter three groups the NPR basically eliminated the intermediate size category which represent about fourteen hundred banks. They also eliminated exam. Procedures for limited purpose in wholesale banks which represent another Fifty or so Banks these are very big banks by the way foreign banks out of New York City and a special purpose banks and for that reason those banks are being forced into other categories but the resultant NPR now has just two categories of size small banks up to five hundred million and everything over that is considered a large bank and then they've got the special category for Strategic Plan Banks. This is all right for the small bags because the small bank test was always relatively easy for basic ratio's kind of like a pop quiz in school is a very simple test however the large bank test under the NPR is very complicated involves several different steps and procedures several test. Very performance oriented very qualified very complicated. And for that reason. It's GonNa require a in my opinion. And actually the opinion of the regulators themselves a really significant regulatory burden on banks learning it and then learning how to implement it. And that's why so. Many banks opposed quite frankly why community groups who are opposed because they didn't understand it and they're basically happy with the current one kind of under the idea. It's it's not broken. Why do we need to fix it? Needs to be improved these to be up. But you know when you take your car to shop for tuna. You don't want them. Tell them we you know Allen I need to put in a whole new Egede you said Oh I just wanted to place. In this case we have a whole major overhaul. That was the problem So you mentioned as you were explaining The notice of proposed rulemaking the five percent deposit rule. I added that work with respect to these branchless banks and what was the origin of that proposal. Yes back in two thousand seventeen with some of the fintech banks began applying for charters. I commented on them in. These are banks like Robin Hood Up. Show of these Fintech I commented the FDIC THE OCC and also to Utah deify. My comments were not complaints. They were all supportive of the applications but only under the conditions that they followed the Sierra wrecks it had no exemptions from them and one of my recommendations to these agencies where that if they were going to get approval as a Fintech for a bank in charter they would have to have a requirement that when they take deposits from outside of their local market which would easily be Wilmington Salt Lake City or Sioux falls they would have a CRA obligation in those markets commensurate with the amount of deposits. They take out so for example in my hometown of Miami We have some very big internet banks. Advertise LOCALLY HERE FROM UTAH. They're in the paper all the time in the Miami. They have no branches here but they take out tens of billions of dollars and they use. Those Sierra gets to benefit Salt Lake City and they should be benefiting Miami Dade County because we have a major affordable housing problem here so the requirement was very simple if you take out five percent of deposits of your deposits come from Miami. Msa five percent of your Sierra benefits should go back should be invested. And this is what Senator Proxima wanted reinvestment of deposits that's the actually the middle name of CRA reinvestment and. That's what that five percent rule was about so Let me give you a hypothetical as the former Professor Warden This is fair game. So what happens can in a situation where you have a? Let's say a online bank Located in Sioux Falls South Dakota not a large city and the bank manages to take deposits all over the country but in no metropolitan statistical area. Does it receive five percent or more of its deposits. Let's say in Sioux Falls. It gets a one percent of deposits and all over the country and other metropolitan statistical areas. It's only getting. It's getting less than five percent. Everywhere does not have a crm obligation under my proposal. And basically what I put into these comments on these fintech charters was that they could then put those Sierra benefits anywhere in the country. The problem right now when they have to put all of it back in Sioux falls assessment area they are competing with other banks base their wells Fargo Citibank. All the big banks base there and it becomes what we call. Cra Hotspot and happens to be if you are a community bank there you can't compete with these giant banks so I would argue these texts. If they're under the five percent diminished role. They could then put their Sierra benefits anywhere in the country that could put him in Detroit. L. A. Chicago anywhere regardless of where the deposits come from because they've not met the five percent requirement but when they meet that requirement. That's an again. I'm Dan when I put on my bankers out. I consider that a number. We are a lot of rules in banking at the five and the ten percent threshold at five percent threshold. Then you have a crm obligation in that market. Okay all right now In connection with the CRA reform. I want to get to the outlook here. We're not really not close to the finish line. I know you've met with the contrel or the currency In his team Twice during the last year and this year through provide your input on Sierra reform you also as you mentioned submitted to comments on the AM PR and five comments on the NPR with the last one proposing what you're calling to seventy five percent solution optimal CRA REFORM CAN UTAH. What that's all about. And what do you think? The likelihood is a likelihood is of that gaining widespread acceptance. I had the opportunity I was invited twice by the comptroller to come to Washington. I met with them and found him to be a very fair person. Very much concerned about a communities are very much concerned about making CRA. Better and I explained to him. The situation as I've explained here on the podcast however realistically looking at the difference between now in one thousand nine hundred five in nineteen ninety five. The reform was basically involved with banks and community groups going back and forth against each other. Now it's much more. You've got basically community groups their powered on against the OCC because of this reform the the Fed obviously taken their own approach and most importantly the House Financial Services Committee They've been all over the OCC. This has become unfortunately more of a political know football than anything else and they. I explained to the comptroller that there needs to be a plan. B In effect my recommendation for Plan B. is very simple. We take the forty three largest banks which I consider very large banks. Those are banked with fifty billion in assets or more this forty three of them and we let them have a three year test run with the NPR. All of the other banks which ninety nine percent of the other banks in America they continue to operate under the current rules. We go for three years with this. These forty-three banks represent seventy five percent of all assets in America including by the way The big Branchless banks under the five percent rule. They go through three years. Which would do one exam cycle because it's about every three years after three years evaluated and safe it makes sense. We can apply to other banks over. Doesn't make sense than perhaps we either. Redo it or we go back to the status quo. The seventy five percents. Lucien has basically saying take this burden this regulatory burden and put it on the forty three biggest banks. They're the ones that can handle the easiest. Let all the other banks continue with the status quo. This should be something that the Aba the should accept because the big banks have the resources to do this. I've spoken for example with one of the top people at Bank of America. Actually seven counts and he told me they've got over thirty people working on the NPR. They actually Submitted a A comment so they've got the resources to do the NPR but most community banks don't banks under two three five ten billion. They really don't. They have to be focused on helping our communities in cra especially now with Kogo nineteen helping the recovery go along so if we could take Sierra off the table the seventy five percent solution would just leave it with the big banks and let the ninety nine percent of other banks focus on putting out P P P loans helping our communities. Because that's really the focus should be right now. Okay so We have an election Coming up in November And nobody knows. Obviously whether trump will be reelected or whether Joe Biden Will Win The election I I assume if trump gets reelected. Let's go to both scenarios. Let's assume can that trump gets reelected? Where's this thing ultimately wants to come to a head and ED will? The Federal Reserve ultimately joined with the comptroller in the FDIC. Or are they gonNA continue to go on their own direction? And then I wanna ask you the same question assuming that Joe Biden gets elected and the new comptroller of the currency We we ended up with a new comptroller. Who's more to the liking of the Democrats? Probably not somebody from the industry Or maybe might be from a bank in Delaware. Now I think about it but maybe not And New leadership at the Fed and also the FDIC so under either scenario whereas the thing Goin' assuming president trump is reelected. I see the comptroller. Continue to push this you know when there was even with Kobe. breakout their request to delay this another thirty days he gave thirty days more. The Con- appeared that while another sixty days. He wants to keep this moving along. Remember you know. Like like trump like MNUCHIN. He's a businessperson. They want to make things happen. They want to keep moving along. And he's pushing to get it done so with trump reelected assume that he's in place. I see this going into effect the way it is. Which could be very very quickly and obviously I see the Fed at that point. Remember the Fed only has fifteen percent of banks by number None of them They have really only four big banks over fifty billion retail banks. They've got a total of ten to six others are wholesale limited purpose strategic plan banks but they're smaller banks they continue under the status quo. It could be by for catered system which is unfortunate for bankers because that brings up a level playing field. Why should banks because they're just happened to be? Fed regulated those fifteen percent. Have an easier approach than those that are not that way but remember banks under five hundred million. I'm not saying we'll get a free pass. They still have some additional regulatory Data requirements. They're going to have it much easier than the intermediate banks. The banks between five hundred million Up to one point three billion those are the ones the former. Isp's have it very difficult? They I see a lot of these banks. The what we call the new large banks Gravitating toward the strategic plan concept which allows banks to do whatever they consider it almost a form of self-regulation. Alan cut like an open book test. Where you set your own rags you set your own rules. Which outstanding with a satisfactory should be and whereas for example only ten percent of banks get it outstanding rating. The number is more like a forty percent of banks strategic plans It's much a much easier. I believe and so I think we'll see a lot. Thanks a lot of banks go under strategic plans now to your second question. If trump is not reelected I see a lot of this died. The fact that the Fed has held off is probably anticipation of the fact that maybe if they keep Putting the ball kicking down the field by the time the election comes around. That may actually happen. Maybe that's why they're doing it. I don't know I I focus out. Cra Not Politics but obviously there would be a change in either with a A change in the composition of the Senate Gone Democrat dot could be huge. Because look what happened with. Maxine waters taken over house banking That could be huge so politics will play a very important part of it again. This was not a big issue. Back in Nineteen ninety-five. Five Sierra was a community reinvestment issue. Today it's heavily a unfortunately a political issue. Yeah okay Is there anything we've really come to the end of our show? Ken and but before we wrap it up I Just wanted to find out if there's any other points that you wanted to make that you haven't already made. Yeah I would say the the main point is if people are gonNA criticized the NPR and it's two hundred thirty eight pages in length. They really need to read it. I need to pick up somebody else's comment and just copycat it and just generally complained about it because there's a lot of good stuff in there actually a lot of good recommendations in their Their only been quite honestly of of the nineteen hundred fifty comments. I only take maybe a dozen of them seriously Because those are written by people that I respect a community group leaders. I respect people that I know really understand. Cra But just generally criticize them for example that five percent raw. There are a lot of people out there. Even recently Congressman from New York. Wrote a piece of the American banker saying that it's going to hurt local. A areas low monitoring areas in New York. It's quite the opposite that five percent rule. Let's Say New York City we get tens of billions of dollars tens of billions out of New York. Msa into these credit card banks and they're being in length and those three areas women's lives to falls and Salt Lake City under this five percent proposal. They're not going to put the money back to the rich people in New York not to Central Park. It's GonNa go to the low. Moderate income distressed areas of New York the areas that are suffering most from covered nineteen. Where are our first responders? Were policemen and firemen live. That's the air is never going to be helped. So it's almost like a Robin Hood proposal. Taking from the rich areas of New York and then reinvest in back into the poor low moderate income areas. That message never got a cost because so many people criticize it without really understand that it. So that's the main message. I would leave if you get to criticize the comptroller criticized. Yosi criticize the NPR. I take their time and understand it and read it before. Criticize it because there is a lot of good stuff in there. Okay well Thank you so much can For being our guest today and sharing your Thoughts on Of extremely important topic Important to the banking industry important to communities Really important to anyone who Is Deals with banks Let me ask you just one other thing. It just occurred to me that we didn't cover Dec- are a only covers depository institutions. How come it doesn't cover non-banks what am I first recommendations and actually both books and I told the contract over the net with actually. He invited me back third time in March because of covert. We couldn't do it. The number one thing on my list is always been. Cra for credit unions and of course any type of depository that takes Fdic federally insured or any type of federally insured deposit so look at the State of Massachusetts. They have a cra not just for banks and thrifts but for credit unions and even warriors bankers mortgage banks and if you look at their results that I just got one in today. Some credit unions do an outstanding job in Massachusetts. Some do an average of seventy four job. That's the reason why we need. Cra for credit unions and also for Finn Tech's and for anyone involved in the financial sector. That's my concern if you WANNA get into banking and have a bank in Charter. And he wants to have the benefits of federally insured. Deposits and all the other benefits we provide through treasury too big to fail everything else. That's kind of like a tax if you will a price you have to pay CRA. And that's how I was taught this for senator proxy fire. I believe my goal has always been to try. I think about how Senator Meyer would do this. And this is how I think he would want it. That Sierra should be applied to these other institutions as long as they're taken insured deposits But that's the key as long as they're taking insured deposits if they're not taking insured deposits but They get there are funded through other sources commercial paper or debt debt securities that are register with the SCC. Then I take it. You do not think. Cra should apply at that point. It would depend on individual cases so for example take quicken loans. One of the biggest deal of all the state of Massachusetts actually did a rating them and they had an issue they followed in order they got it worked out. I mean if I'm GonNa take a mortgage my first place I'll go is going to be quicken loans. There's no doubt but they don't have a FDIC insured things however they have other regulations that cover them so as long as the other regulations that covered them CFP and other consumer protection regulations are in effect. I would say those should be sufficient. Also they should be fair lending regulations as well covering them as long as they have other consumer protection regulations in effect across the board. That would be fine but I basically would focus on anything with the depository. That's why I was so concerned with Fedex got it okay Well can again thank you for being our guest today I WanNa thank all of our listeners. Who have downloaded the podcast today. I'm remind you to visit our website. Www DOT BALLARD SPAHR DOT com. Where you can subscribe to our podcast show. Also you can subscribe on Apple podcast. Google play spotify or whatever. Your favorite podcasts platform made beat And don't forget to check out our blog also call consumer finance monitor for daily insights of the consumer finance industry. And if you have any questions or suggestions for our show please email us at podcast at Ballard SPAHR DOT com and stay tuned each Thursday for a new episode of our shop. Thank you again.