Renovating the Cra

1 Pages Posted: 31 Aug 2001

See all articles by Ike Brannon

Ike Brannon

University of Wisconsin - Oshkosh


Congress enacted the Community Reinvestment Act (CRA) in 1977 to prod commercial banks to lend to borrowers in low-income inner city neighborhoods. Such prodding appears unnecessary today because of the competition for loans in virtually all markets. Political realities probably preclude eliminating the CRA, but it could undergo market-based reform that would make such lending more efficient. The author proposes implementing a "lending voucher" system wherein banks would have to acquire a certain amount of CRA vouchers each year, which would represent a certain amount of money lent to low-income neighborhoods. However, the banks would not need to make the loans directly; the vouchers could be purchased from banks that specialize in such lending.

Suggested Citation

Brannon, James Isaac, Renovating the Cra. Available at SSRN: or

James Isaac Brannon (Contact Author)

University of Wisconsin - Oshkosh ( email )

Oshkosh, WI 54901
United States
920-424-7154 (Phone)

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