Community Development Investment Review

March 2011

Why Latin America Urgently Needs CRA, and Why CRA Won’t Work for Latin America


When I speak of a Community Reinvestment Act (CRA) for Latin America, I mean a mechanism that monitors and makes bank activities public. Thanks to CRA, we know where banks lend, to whom they lend (by income, race, ethnicity,and gender), and to what degree these customers reflect the profiles of the banks’ depositors. We can detect discriminatory policies toward the poor in both lending and deposits. The CRA has also created incentives for banks and other financial institutions to increase their presence in and their services to low-income neighborhoods.

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