Housing/Mortgages Backgrounders & Briefs
02/01/2011
By Philip Ashton
February 1, 2011
The Community Reinvestment Act (CRA) has been critical to the expansion of responsible credit for low- and moderate-income borrowers since its passage in 1977. Designed to address low levels of lending activity in low- and moderate-income neighborhoods, it has helped spur a growing range of successful affordable loan programs that reduce barriers to credit and increase responsible lending. Despite consistent evidence that the Act produces modest increases in access to capital and is an important incentive for bank investments to profitably tap new opportunities in community economic development, it has been a convenient scapegoat for journalists, academic economists, banking industry lobbyists, and their allies in Congress.
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