New Report: Community Reinvestment Act

Posted by on October 25, 2002

The Community Reinvestment Act of 1977 (CRA) is pending renewal. At issue in the regulatory overhaul are the various yardsticks regulators use to judge whether individual institutions are meeting the credit and service needs of low- and moderate-income (LMI) communities.

In Levy Institute Public Policy Brief No. 68, Optimal CRA Reform: Balancing Government Regulation and Market Forces, Kenneth H. Thomas argues that if new rules are to succeed, regulators will have to strike a careful balance between various competing interests, such as grassroots activists and financial institutions, vying to tip the balance of power in their favor. Thomas’s conclusions are the result of his careful examination of new CRA data and assessments of comments of selected stakeholders. These ideas, and the many other useful proposals in this brief, should be carefully considered in the months ahead.

During these times of electronic communication and faster and safer mail service, we invite you and your colleagues to get the details of Ken Thomas’s study via the following link: http://www.levy.org/docs/ppbsum/sum68.html