LETTER When Is a Bank Branch Not a Branch? I’m writing to voice my concern over Countrywide Bank’s blatant circumvention of community reinvestment obligations. It all began a couple of years ago when Countrywide Credit Industries, one of the largest financial services companies in the world and the holding company for one of the largest mortgage lenders in the country, quietly purchased a small bank in Washington D.C. and began operating Countrywide Bank. Almost as quietly, Countrywide Bank opened four retail-banking facilities in the Valley. There are now 11 such branches statewide, with additional retail facilities planned. The bank’s deposits are well over $6 billion, and its assets are at $14 billion, all within a couple of years. Countrywide Bank is clearly a big part of Countrywide’s larger plans to expand and diversify beyond mortgage lending. These plans will certainly see an increase in Countrywide’s profits. None of which will be going back into California communities. Despite all of its business in California, Countrywide Bank refuses to reinvest in California. The Community Reinvestment Act (CRA) requires banks and thrifts to help meet the credit needs of all of the communities in which they are chartered to do business. Bank regulators define this to mean that banks should be serving those areas in which they have branches, turning local deposits back into local projects and community assets. CRA has thus been responsible for much of the positive community development activity that has revitalized deteriorating neighborhoods, created home ownership and equity for traditionally underserved families, and built small businesses that create both jobs and household wealth. Countrywide Bank says it has no such CRA obligation in California. Why? Because its branches are not really branches. This despite the facts, “Countrywide Bank” signs mark their offices. The bank has ATMs on site. Two members of the bank’s staff are available to assist bank customers. Consumers can go to the bank to open bank accounts, with assistance as necessary from bank staff. Bank customers can bring their cash deposits into the bank, leave them on the premises in a “lock box,” and the bank arranges for these deposits to be credited to customer accounts. Bank customers can also apply for home loans in the branch. How is this not a bank branch? Countrywide maintains that by not having California bank staff technically accept deposits to open accounts, Countrywide has not triggered the regulatory definition of “branch,” and therefore, has no CRA responsibility in the state. As president of Valley Economic Development Center, a provider of capital to small businesses in the San Fernando Valley, and as vice chair of the California Reinvestment Committee, a statewide CRA advocacy coalition that promotes access to credit, I find these legal and semantic games deplorable. Countrywide Bank probably does more business in California than in any other state. Countrywide Bank is profiting from Valley and state residents’ deposits, home loans, money market and CD accounts. If Countrywide wants to be a bank, it should act like one by respecting CRA and reinvesting in our communities. Roberto Barragan, president Valley Economic Development Center Inc.