CRA Grade Inflation
AbstractCommunity Reinvestment Act of 1977 (CRA) ratings and performance evaluations are the only bank and thrift exam findings disclosed by financial institution regulators. Inflation of CRA ratings has been alleged by community activists for two decades, but there has been no quantification or empirical investigation of grade inflation. Using a unique grade inflation methodology on actual ratings and evaluation data for 1,407 small banks and thrifts under the revised CRA regulations, this paper concludes that nearly half of all CRA ratings are inflated. Results are presented for the four federal bank and thrift regulators and their 31 regional offices. These findings are consistent with the "Friendly Regulator Hypothesis."
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0004060.
Length: 52 pages
Date of creation: 30 Oct 2000
Date of revision:
Note: Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 52; figures: included
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Find related papers by JEL classification:
- E - Macroeconomics and Monetary Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-14 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Drew Dahl & Douglas D. Evanoff & Michael F. Spivey, 1999. "Community Reinvestment Act rating downgrades and changes in bank lending behavior," Proceedings 634, Federal Reserve Bank of Chicago.
- Keane, Michael, 2004. "Modeling Health Insurance Choices in “Competitive” Markets," MPRA Paper 55198, University Library of Munich, Germany.
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