Federal Reserve Bank of San Francisco

Community Development

Expanding the CRA to All Financial Institutions

Author(s): Liz Cohen and Rosalia Agresti

February 2009

Community Development Investment Review

The Community Reinvestment Act (CRA) was enacted in response to the fact that minority and low-income communities were not being fairly and adequately served by banks which have been beneficiaries of the U.S. government’s safety net since the Great Depression. The federal government, by expanding its safety net in 2008 to include investment banks, broker-dealers, and other financial institutions, took the steps necessary to stabilize the global financial markets. The central premise of this article is that in return for access to the Federal Reserve’s Discount Window, investment banks, broker-dealers, and other financial institutions should be required to comply with an updated CRA. Fair access for all Americans to the full range of financial services is essential to restore our faith in the U.S. financial system and the health of our economy.

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