Community Development Innovation Review

December 2010

CRA Modernization and Impact Investments


Bank regulators are currently reviewing public comment on the Community Reinvestment Act (CRA) to determine what regulatory changes, if any, might be made to this law that has served as a pillar in the community development field. In its first iteration, the CRA addressed the fundamental challenge of inputs—simply getting capital and financial services into low- and moderate-income (LMI) areas. In its second iteration after several major changes, the CRA focused on how to better measure activities that improve communities. In what may be its third iteration, the CRA must focus on measuring outcomes and impact; in other words, to what degree has CRA-motivated lending and investing successfully improved communities?