Year Published
2005
Abstract
Concerns about equal access to mortgage credit have led to the
passage of many laws whose goal is its promotion. One important
example is the Community Reinvestment Act of 1977 (CRA),
which directs the federal banking regulators to encourage
financial institutions to provide services to their entire service areas. In
response to the incentives laid out by the CRA, many banks have entered
into CRA agreements, which are arrangements, often formally established
with community-based organizations, in which lenders pledge to extend a
certain volume of loans to targeted groups and communities.2
Evidencesuggests that CRA agreements have been effective in promoting an
increased flow of mortgage credit to lower - income and minority
communities by the institutions involved in the agreements (Schwartz,
1998b) and by all lenders considered together (Bostic and Robinson, 2003).
passage of many laws whose goal is its promotion. One important
example is the Community Reinvestment Act of 1977 (CRA),
which directs the federal banking regulators to encourage
financial institutions to provide services to their entire service areas. In
response to the incentives laid out by the CRA, many banks have entered
into CRA agreements, which are arrangements, often formally established
with community-based organizations, in which lenders pledge to extend a
certain volume of loans to targeted groups and communities.2
Evidencesuggests that CRA agreements have been effective in promoting an
increased flow of mortgage credit to lower - income and minority
communities by the institutions involved in the agreements (Schwartz,
1998b) and by all lenders considered together (Bostic and Robinson, 2003).
Research Category