Federal Reserve Bank of San Francisco

Community Development

Community Reinvestment Emerging from the Housing Crisis

Author(s):

July 2009

Community Development Investment Review

The Community Reinvestment Act (CRA) has helped to revitalize low- and moderate-income (LMI) communities and provided expanded opportunities for LMI households. Going forward, the CRA could be strengthened in several ways to ensure its continued role in encouraging sound lending, investment, and services in LMI communities. At the same time, the CRA cannot be expected to resolve the range of financial problems facing LMI communities today. We need to clean up the mortgage business, drive out abuses, and develop a system of consumer protection, prudential supervision, capital requirements, and transparency that restores trust and confidence in our financial system.

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