Creating a Marketplace: Information Exchange and the Secondary Market for Community Development Loans


Laura Choi, Federal Reserve Bank of San Francisco

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July 12, 2007

There is a lack of information exchange between community development lenders and capital investors that limits the growth of a secondary market for community development assets. This obstacle limits the ability of community development lenders to tap into the virtually endless capital resources of the secondary market, thereby limiting the valuable services these organizations provide to underserved communities. A reputable institution could contribute to solving this problem by developing an online information-exchange platform that allows buyers and sellers of community development loans to: (1) efficiently identify suitable counterparties, and (2) effectively share the appropriate type and amount of data to facilitate a sale.