IDEAS home Printed from https://ideas.repec.org/p/fip/fedhwp/wp-00-6.html
   My bibliography  Save this paper

Does the Community Reinvestment Act influence lending? an analysis of changes in bank low-income mortgage activity

Author

Listed:
  • Drew Dahl
  • Douglas D. Evanoff
  • Michael F. Spivey

Abstract

Anecdotal evidence that the Community Reinvestment Act (CRA) influences the lending behavior of financial institutions has not been uniformly supported by empirical research. We revisit this issue by evaluating changes in low-income mortgage lending at commercial banks over the 1992-96 period. Our empirical results fail to support a hypothesis that banks respond to public and regulatory pressure exerted as a result of a downgrade in CRA rating by increasing low-income mortgage lending. The findings are consistent with the contention that during this period regulators stressed adjustments in the lending process of banks (e.g., documentation of lending program and efforts directed at targeted markets) more than lending performance. The findings underscore the importance of regulatory efforts made later in the decade to more closely link enforcement of the CRA to lending outcomes.

Suggested Citation

  • Drew Dahl & Douglas D. Evanoff & Michael F. Spivey, 2000. "Does the Community Reinvestment Act influence lending? an analysis of changes in bank low-income mortgage activity," Working Paper Series WP-00-6, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-00-6
    as

    Download full text from publisher

    File URL: http://www.chicagofed.org/digital_assets/publications/working_papers/2000/wp2000_06.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Honohan, 2004. "Financial Sector Policy and the Poor : Selected Findings and Issues," World Bank Publications, The World Bank, number 14874.
    2. Drew Dahl & Douglas Evanoff & Michael Spivey, 2003. "The Timing and Persistence of CRA Compliance Ratings," Journal of Financial Services Research, Springer;Western Finance Association, vol. 23(2), pages 113-132, April.
    3. AKM Rezaul Hossain, 2010. "Branch location choice: Do lenders discriminate?," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 35(30), pages 11-55, July-Dece.

    More about this item

    Keywords

    Community Reinvestment Act of 1977 ; Mortgages ; Bank loans ; Financial institutions;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedhwp:wp-00-6. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernie Flores). General contact details of provider: http://edirc.repec.org/data/frbchus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.