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CRA special lending programs

Author

Listed:
  • Robert B. Avery
  • Raphael W. Bostic
  • Glenn B. Canner

Abstract

The Community Reinvestment Act (CRA) of 1977 encourages federally insured banking institutions to help meet the credit needs of their communities, including those of lower-income areas, in a manner consistent with their safe and sound operation. In responding to the CRA, many banking institutions have sought to expand lending to lower-income populations through special lending programs that seek out and assist such borrowers in a variety of ways. These programs, many of which include third parties such as government agencies and nonprofit groups, are often an important element of an institution's CRA-related lending. Many institutions have conducted such programs, some for many years. Although the characteristics of these programs and their implementation vary greatly across banking institutions, little systematic information about them has been available. To further the understanding of CRA special lending programs, this article uses data from a recent Federal Reserve Board survey to provide new information on the nature of these programs, their characteristics, and how these characteristics relate to the performance (delinquency and default rates) and profitability of the loans extended through them.

Suggested Citation

  • Robert B. Avery & Raphael W. Bostic & Glenn B. Canner, 2000. "CRA special lending programs," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 86(Nov), pages 711-731, November.
    • Handle: RePEc:fip:fedgrb:y:2000:i:nov:p:711-731:n:v.86no.11
    DOI: 10.17016/bulletin.2000.86-11
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    File URL: http://www.federalreserve.gov/pubs/bulletin/2000/1100lead.pdf
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    Citations

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    Cited by:

    1. Glenn B. Canner & Elizabeth Laderman & Andreas Lehnert & Wayne Passmore, 2002. "Does the Community Reinvestment Act (CRA) cause banks to provide a subsidy to some mortgage borrowers?," Finance and Economics Discussion Series 2002-19, Board of Governors of the Federal Reserve System (U.S.).
    2. Lei Ding & Leonard I. Nakamura, 2017. "“Don't Know What You Got Till It’s Gone” — The Effects of the Community Reinvestment Act (CRA) on Mortgage Lending in the Philadelphia Market," Working Papers 17-15, Federal Reserve Bank of Philadelphia.
    3. Anil Rupasingha & Kyungsoon Wang, 2017. "Access to capital and small business growth: evidence from CRA loans data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 15-41, July.
    4. Kathe Newman & Philip Ashton, 2004. "Neoliberal Urban Policy and New Paths of Neighborhood Change in the American Inner City," Environment and Planning A, , vol. 36(7), pages 1151-1172, July.
    5. Colleen Casey & Timothy Bates & Joseph Farhat, 2023. "Linkages between regional characteristics and small businesses viability," Small Business Economics, Springer, vol. 61(2), pages 617-629, August.
    6. Neil Bhutta, 2008. "Giving credit where credit is due? the Community Reinvestment Act and mortgage lending in lower-income neighborhoods," Finance and Economics Discussion Series 2008-61, Board of Governors of the Federal Reserve System (U.S.).

    More about this item

    Keywords

    Mortgages; Community Reinvestment Act of 1977;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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