The Community Reinvestment Act (CRA), passed by Congress in 1977, requires commercial banks and savings institutions to help meet the credit needs of borrowers in their communities, including low- and moderate-income neighborhoods. The CRA has been controversial since its enactment, with calls for both repealing and expanding it. Their article, “Bridging the Gap to Scalable Community Reinvestment Lending Programs,” uses lessons learned from the Community Advantage Program Study to provide insight into how the challenges associated with special community reinvestment lending might potentially be managed on a larger scale via increased capital reserves, a mortgage insurance mechanism, and enhanced market liquidity in the special community reinvestment product space.
As Carolina Reid writes, “Three themes emerge from the contributions in this symposium. The first is that CRA has a measurable impact on access to credit but that larger market forces often mute its effect…. A second key theme in this symposium is the importance of public participation and advocacy in the implementation of CRA…. The third theme relates to the question of how CRA could be improved. Given the continuing disparities in access to credit and the importance of credit for economic mobility, the goal of CRA is as critical and relevant today as it was 40 years ago. The contributions in this symposium provide welcome additions to the interdisciplinary literature on CRA and will hopefully help to inform ongoing policy efforts to expand access to opportunity for low- and moderate-income households.”
Read the full symposium here.