| Title: |
The
Community Reinvestment Act After Financial Modernization: A Baseline
Report |
| Author(s): |
Robert E. Litan, Nicolas P. Retsinas,
Eric Belsky, Susan White Haag |
| Organization: |
Treasury Department
April 2000 |
| Methodology: |
One of the provisions of the Gramm-Leach-Bliley
Act directed the Treasury Department to prepare within two years of
the law's passage a report on the Act's impact on the provision of
adequate services as intended by the CRA. As part of this requirement,
the Act also directed the Treasury to prepare this baseline report
against which to measure any changes resulting from the Act. This
report reviews the legislative and regulatory history of the CRA and
evaluates baseline information on lending levels in 1998. |
| Primary conclusions: |
The rapid growth in
lending to LMI borrowers and areas by CRA-covered lenders and their
affiliates, coupled with their increasing share of the market for
prime loans to LMI borrowers and areas, suggests that the CRA has
contributed to the recent increase in mortgage lending to such borrowers. |
| Because reporting requirements
for small business and community development lending became effective
in 1996, there is insufficient data to draw conclusions about trends
over time. However, small business lending in LMI areas remained stable
from 1996 to 1998, and anecdotal evidence suggests increased community
development lending activity. |
| While there is no formal reporting
mechanism for community development investments, evidence suggests
that the CRA has been an important vehicle for facilitating the growth
of CDFIs, CDCs, community development credit unions, and other similar
organizations. |
| During the 1975 to 1995 period,
banking offices became more evenly distributed on a per-capita basis
across neighborhoods of different income levels. The percentage of
the population with some from of banking account has been rising,
from 84 percent in 1992 to over 90 percent in 1998. |
| There are indications of continuing
imperfections in credit markets for LMI borrowers, especially minorities,
as well as for some small businesses in LMI neighborhoods. |
| URL: |
http://www.ustreas.gov/press/releases/docs/crareport.pdf |
| Bibliography: |
Yes |
| Number of pages: |
196 |
