IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Past, Present and Future of Community Reinvestment Act (CRA): A Historical Perspective

Listed author(s):
  • AKM Rezaul Hossain

    (University of Connecticut)

This paper takes a historical approach to understand the evolution of one of the most controversial banking regulations in recent history, the Community Reinvestment Act (CRA) of 1978 and its effects on access to credit and banking services to community borrowers. The paper lays out the historical milieu of credit markets in the late seventies and describes the early justification of this legislation. The paper explores the implementation of the act through regulations on lending institutions and the effects of the regulations on depository lenders and community borrowers. Detailed description of the reactions to CRA regulations by different parties involved in the act is provided. This reaction and consequent revisions to the regulations have contributed to keep the act effective and relevant. In addition to the reactions, the act has responded to the structural reorganization and regulatory changes in the banking sector and mortgage markets in particular. The paper illustrates this dynamic nature of implementation, reactions and revisions that has shaped CRA regulations over last quarter century. The paper argues that historical understanding and justification is important to formulate future changes to the regulation. This understanding is important to keep the act objective, measurable and enforceable. While inclusion of all possible requirements that may enhance community lending is not the correct approach to future changes in CRA, keeping the act static to its initial requirements is also not appropriate from public policy standpoint. A balance between the two should guide the future changes to the act. Finally, the paper points out the trends in community lending and suggests some of the future changes to the regulation.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: no

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2004-30.

in new window

Length: 88 pages
Date of creation: Oct 2004
Handle: RePEc:uct:uconnp:2004-30
Contact details of provider: Postal:
University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063

Phone: (860) 486-4889
Fax: (860) 486-4463
Web page:

More information through EDIRC

References listed on IDEAS
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.:

in new window

  1. Raphael W. Bostic & Breck L. Robinson, 2003. "Do CRA Agreements Influence Lending Patterns?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(1), pages 23-51, March.
  2. Glenn B. Canner & Wayne Passmore, 1995. "Implementing CRA: what is the target?," Proceedings 454, Federal Reserve Bank of Chicago.
  3. Thakor, Anjan V & Beltz, Jess, 1994. "A "Barter" Theory of Bank Regulation and Credit Allocation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 679-705, August.
  4. Stephen L. Ross & John Yinger, 2002. "The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair-Lending Enforcement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182289, January.
  5. Lin, Emily Y., 2001. "Information, Neighborhood Characteristics, and Home Mortgage Lending," Journal of Urban Economics, Elsevier, vol. 49(2), pages 337-355, March.
  6. Glenn B. Canner & Elizabeth Laderman & Andreas Lehnert & Wayne Passmore, 2002. "Does the Community Reinvestment Act (CRA) cause banks to provide a subsidy to some mortgage borrowers?," Finance and Economics Discussion Series 2002-19, Board of Governors of the Federal Reserve System (U.S.).
  7. Robert B. Avery & Raphael W. Bostic & Paul S. Calem & Glenn B. Canner, 1999. "Trends in home purchase lending: consolidation and the Community Reinvestment Act," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 81-102.
  8. Jeffrey M. Lacker, 1995. "Neighborhoods and banking," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 13-38.
  9. Dimitri B. Papadimitriou & Ronnie J. Phillips & L. Randall Wray, 1993. "The Community Reinvestment Act, Lending Discrimination, and the Role of Community Development Banks," Economics Working Paper Archive wp_95, Levy Economics Institute.
  10. Robert B. Avery & Patricia E. Beeson & Mark S. Sniderman, 1997. "Information dynamics and CRA strategy," Economic Commentary, Federal Reserve Bank of Cleveland, issue Feb.
  11. Douglas D. Evanoff & Lewis M. Segal, 1996. "CRA and fair lending regulations: resulting trends in mortgage lending," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 19-46.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2004-30. 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: (Mark McConnel)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.