Community Development Innovation Review

February 2009
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A Tradable Obligation Approach to the Community Reinvestment Act

Author(s):

In articles published in 1994 and 1995, I proposed that the Community Reinvestment Act (CRA) be modified to allow banks to trade their CRA obligations with one another in a manner analogous to cap-and-trade regimes used to address environmental pollution. As in the environmental protection context, a tradable obligation approach to the CRA has the potential to enhance the provision of financial services to low and moderate-income communities at lower cost than does the current command-and-control approach.

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Other articles in this issue

A Framework for Revisiting the CRA

The Community Reinvestment Act and the Recent Mortgage Crisis

The 30th Anniversary of the CRA: Restructuring the CRA to Address the Mortgage Finance Revolution

The CRA within a Changing Financial Landscape

The Community Reinvestment Act: Outstanding, and Needs to Improve

It’s the Rating, Stupid: A Banker’s Perspective on the CRA

The Community Reinvestment Act at 30 Years

The Community Reinvestment Act: Past Successes and Future Opportunities

A More Modern CRA for Consumers

CRA Lending During the Subprime Meltdown

Expanding the CRA to All Financial Institutions

What Lessons Does the CRA Offer the Insurance Industry?

CRA 2.0: Communities 2.0

The Community Reinvestment Act: 30 Years of Wealth Building and What We Must Do to Finish the Job

The CRA as a Means to Provide Public Goods

Putting Race Explicitly into the CRA

Community Reinvestment Emerging from the Housing Crisis

A Principle-Based Redesign of HMDA and CRA Data

The Community Reinvestment Act: Good Goals, Flawed Concept

A Banker’s Quick Reference Guide to CRA