Two groups mounted last-minute drives last week to protect the Community Reinvestment Act, which is under review by the Federal Deposit Insurance Corp.

One, ACORN, the Association of Community Organizations for Reform Now, released a study that shows evidence of increased lending disparities in the mortgage market. The other, the National Community Capital Association, put up a website to make it easier for people to register their opposition to watering down a law that has been instrumental in bringing private investment dollars to low- and moderate-income communities across the country.

CRA was adopted by Congress in 1977 to put an end to "redlining" -- the deliberate, methodical practice of refusing to do business within a certain geographic area -- and force banks to improve their lending performance in underserved communities.

According to NCCA, a national network of more than 150 private-sector community development financial institutions, a rule proposed by the FDIC would seriously weaken CRA by relieving nearly 900 medium-size banks of their requirements to support affordable housing, community development and small business loans in the markets where they take deposits.

The comment period on the proposal expires today. At last count, more than 5,600 comments have been received by the agency.

NCCA, on its SaveCRA.org site, warned that the plan would be "devastating" for struggling urban and rural areas across America. "According to the FDIC's own data, the vast majority of states would have very few banks remaining under current CRA rules," the website said.

The group says that in 37 states, 90 percent or more of the banks regulated by the FDIC have assets of under $1 billion and would therefore be exempt from the law.

In eight states -- Alaska, Arizona, Idaho, Minnesota, Montana, New Mexico, West Virginia and Wyoming -- all FDIC-regulated banks have assets under $1 billion and would be excused from the comprehensive CRA exam.

In an additional 36 states, five or fewer banks supervised by the FDIC will remain subject to full CRA rules.

"We are talking about a big part of the future supply of affordable housing" for a large part of the country, said NCCA CEO Mark Pinsky.

"For poor and struggling urban and rural areas across America, the FDIC rule is a real problem," he said. "We want to make sure that all people understand what is at stake and that they have a chance to speak up about it."

Nancy Andrews, president of Low Income Investment Fund in Oakland, Calif., agreed. She said the community reinvestment law has been instrumental in bringing private investment dollars to low- and moderate-income communities across the country. But, she added, the changes proposed by the FDIC would dramatically reduce the amount of private investment.

Meanwhile, the study by ACORN, the nation's largest community organization of low- and moderate-income families, with over 150,000 member families organized into 700 neighborhood chapters in 60 cities across the country, found that larger gains in lending to minorities and lower income people were made in the five years prior to1998 than in the five years since.

Although lending to minorities and lower-income families has increased, it is still at low levels compared to their share of the population and the quality of these loans has changed, the study found. Even African-Americans were 2.5 times more likely to be turned down than upper-income whites, it said.

ACORN opposes the changes to the law proposed by the FDIC, arguing that the result would be significantly fewer home loans to underserved communities.

Of the same view is Presidential hopeful Sen. John Kerry, D-Mass., who, in commenting on the study, said that rather than weaken the CRA, his administration would redouble America's commitment to home-ownership and expanded access to capital for small business.

ACORN President Maude Hurd said the proposal "could really undermine the hard won successes of the Community Reinvestment Act over the past years."

"Federal bank regulators should do their jobs and continue to foster home ownership opportunities, especially since this study shows that many Americans are increasingly more likely to be turned down for home mortgage loans," she said.

The ACORN report, which looks at lending disparities in 120 cities, also found that:

• African-American applicants are currently being rejected at the same level as in 1993. But as a group, they are now 1.8 times more likely than whites to be denied now than they were in 1998.

• African-Americans received only 5.9 percent of the purchase loans originated by conventional lenders, yet they comprise 11.8 percent of the population. Latinos are 13.5 percent of the population but received just 9.9 percent of the loans.

Published: October 20, 2004

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.