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Abstract:
This guide to the Community Reinvestment Act (CRA) is designed to provide community advocates with the basic information and skills they need to challenge bank redlining and promote economic development in their neighborhoods. The Guide includes four sections: the legal structure of the CRA; important information about banks and how to get it; analyzing a bank's CRA records, and participating in the CRA enforcement process.

community reinvestment, community economic development, CRA challenge, HMDA data, CRA Guide, bank regulation, financial institutions, banking and lending, redlining, lending discrimination

Abstract:
The Community Reinvestment Act of 1977 (CRA) has made great progress in achieving its dual purposes: eliminating bank redlining and promoting reinvestment in previously redlined neighborhoods. In doing so, the CRA has helped to democratize capital by giving more people a voice in bank lending decisions and including more people in the economic mainstream by influencing banks to make loans to them to buy homes or open small businesses. Despite the CRA's success, the CRA has not reached its full potential. One of the main reasons for this is that the federal agencies that enforce the CRA are so fearful of allocating credit that they use vague and subjective criteria for evaluating bank lending, making it difficult to hold a bank accountable for a poor lending record or even to know what constitutes a poor lending record. In order for the CRA to reach its full potential, objective and quantitative criteria for evaluating a bank's CRA performance must be implemented. Such criteria will maximize both the public's voice in decisions about bank lending and the number of people who receive loans. This article proposes such criteria.

Community Reinvestment Act, community economic development, lending discrimination, home mortgage lending

Abstract:
This paper analyzes home mortgage lending patterns in the New York Metropolitan Area. It examines lending to four particular underserved populations: minority persons, predominantly minority neighborhoods; low-income persons; and low-income neighborhoods. The paper compares lending to these populations to lending to control groups and over time in order to evaluate whether the needs of the underserved populations are being met. The paper also analyzes the records of individual lenders at meeting the credit needs of those four populations and ranks the lenders accordingly. The paper also analyzes trends in subprime lending to these four populations.

Abstract:
In 2001, the four federal banking agencies that enforce the Community Reinvestment Act (CRA) began a review of CRA regulations they adopted in 1995. The review lasted until they issued amendments in 2004 and 2005. The review process was controversial, tortuous, and divisive. By the time it was over, residents of the communities the CRA was intended to benefit, including low- and moderate-income and predominantly minority neighborhoods, gained a victory in their efforts to promote community reinvestment and economic development, but also lost significant ground. The victory was strengthened regulation of subprime and predatory lending. The losses included a reduction in the number of banks and savings associations subject to more rigorous CRA standards, a loss in the amount of publicly available data about small business and small farm lending, and the elimination of community development lending and investment and retail banking service requirements for large savings associations. As a result of the amendments to the CRA regulations, underserved communities face a reduction in loans, investments, and services.

This article describes the CRA and the 1995 CRA regulations, identifies some of the key issues in the CRA amendment process, describes the amendments to the regulations, evaluates the amendments' likely effect on underserved communities, and offers suggestions to advocates about how they can use the amended CRA regulations to help underserved communities and how to prevent further cutbacks in CRA protections.

Community Reinvestmant Act

Abstract:
The recent turmoil in the financial markets caused by rising default rates on subprime residential home mortgages should not obscure that several studies have shown that African-Americans, Latinos, and residents of predominantly minority neighborhoods receive a disproportionately high percentage of subprime loans. The subprime lending crisis should also not obscure the fact that they have also received a disproportionately low percentage of all home mortgage loans.

This report uses data made public pursuant to the Home Mortgage Disclosure Act (HMDA) to examine home mortgage lending in New York City in 2004 and 2005 to determine whether African-Americans, Latinos, and residents of predominantly minority neighborhoods received their share of home mortgage loans and whether they paid more for the loans they got.

The report reaches several conclusions. The most important conclusion is that in New York City in 2005, African-Americans, Latinos, and residents of predominantly minority neighborhoods received significantly higher percentages of subprime HMDA and home purchase loans than whites and residents of predominantly white neighborhoods.

Although the HMDA data that this report uses do not contain enough information about the creditworthiness of individual borrowers to determine whether these disparities are the result of illegal discrimination, the disparities in some cases are so stark that they beg for government enforcement agencies who have access to information about borrower creditworthiness to investigate individual lenders further and they invite private parties to commence litigation against lenders through which they can gain access to this information.

Subprime lending, NYC Home Mortgage Disclosure Act, home mortgage lending,

Abstract:
In 2004 and 2005, the four federal banking agencies that enforce the Community Reinvestment Act (CRA) amended their CRA regulations. Community groups were concerned that these amendments would have a negative impact on bank CRA performance. In particular, they were concerned that community development lending and investment and the provision of bank branches and other banking services in low- and moderate-income neighborhoods would decline. This article studies the impact of the changes. In summary, the study found that: 1) the CRA examination process has an impact on bank behavior; 2) community development lending and investment by certain lending institutions declined following the amendments while for other institutions such lending increased; and 3) the amount of information on CRA examination about bank branching patterns declined following the amendments.

community development, CRA, Community Reinvestment Act