| Title: |
Trends
in Home Purchase Lending: Consolidation and the Community Reinvestment
Act |
| Organization: |
Federal Reserve Bulletin
February 1999 |
| Methodology: |
The authors examine the relationship
between consolidation among banking organizations in local markets
and changes in home purchase lending over the 1993-1997 period. The
authors examine changes in total lending as well as changes in lending
to lower-income and minority borrowers and neighborhoods. The authors
also explore the relationship between consolidation and changes in
home purchase lending by institutions in those areas where they have
CRA responsibilities. |
| Primary conclusions:
|
"The level of
consolidation activity among banking organizations appears to have
had little relationship to changes in home purchase lending, both
overall and to lower-income and minority borrowers and neighborhoods." |
| "This result holds despite
the fact that consolidating organizations reduced their home purchase
lending substantially in those areas in which they had banking offices.
It appears that this reduction was more than offset by expanded home
purchase lending by banking organizations in areas where they did
not operate banking offices and by independent mortgage and finance
companies and credit unions." |
|
"Although banking institutions involved
in consolidation reduced their overall lending in the communities
where they had banking offices, this reduction did not disproportionately
affect their lending to lower-income and minority borrowers and
neighborhoods. The analysis shows that the typical consolidating
organization generally increased the proportion of loans it extended
to each of these groups within its local communities. These results
are consistent with the view that the CRA has been effective in
encouraging banking organizations, particularly those involved in
consolidation, to serve lower-income and minority borrowers and
neighborhoods."
|
| URL: |
http://www.federalreserve.gov/pubs/bulletin/1999/0299lead.pdf |
| Bibliography: |
No |
| Number of pages: |
22 |
