| Title: |
Report
on the Performance and Profitability of CRA-Related Lending |
| Organization: |
Board of Governors
of the Federal Reserve System
July 17, 2000 |
| Methodology: |
A survey of the lending experiences
of the 500 largest banks, 143 responded. The survey was in two parts,
gathering information about 1) the absolute and relative performance
and profitability of CRA lending in 1999; and 2) the bank's five largest
CRA special lending programs. |
| Primary conclusions:
|
Survey response indicated
that banks generally do not separately track the performance and profitability
of CRA-related lending. |
| Quantitative information was supplied
by less than half the respondents. |
|
Home purchase and refinance lending is the
largest volume of CRA-related loans.
- For 82% of institutions, this type of lending
was profitable or marginally profitable.
- Compared to overall home purchase and refinance
lending , CRA-lending was less profitable for 46% of the respondents,
but 56% reported that profitability was about the same.
- About half the survey responded that the
delinquency rates for CRA-related lending in this category was
higher, one-third reported no difference and one-sixth reported
lower delinquency rates.
|
|
The vast majority of respondents reported that
home improvement lending was either profitable or marginally profitable.
- These types of CRA-loans perform relatively
less well compared to the aggregate.
|
|
For small business lending:
- Virtually all respondents reported that
CRA-related lending was profitable or marginally profitable.
- Most respondents report that the profitability
compared with other small business lending is about the same.
|
|
For community development lending:
- Virtually all respondents reported that
they benefit because it promotes community growth and stability
and responds to local credit needs.
- Virtually none reported they do this solely
to obtain a satisfactory or outstanding CRA rating.
- Nearly all report that community development
lending is profitable or marginally profitable
|
| URL: |
http://www.federalreserve.gov/boarddocs/surveys/craloansurvey/ |
| Bibliography: |
No |
| Number of pages: |
99 |
