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SKU: R43661_2019-02-28.pdf Categories: , Tag:

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Author: Darryl E. Getter, Specialist in Financial Economics

Release Date: 2/28/2019

Number of Pages:  26

Price: $19.95


This report informs the congressional debate concerning the CRA?s effectiveness in incentivizing bank lending and investment activity to LMI borrowers. After a discussion of the CRA?s origins, it presents the CRA?s examination process and bank activities that are eligible for consideration of CRA credits. Next, it discusses the difficulty of determining the CRA?s influence on bank behavior. For example, the CRA does not specify the quality and quantity of CRA-qualifying activities, meaning that compliance with the CRA does not require adherence to lending quotas or benchmarks. In the absence of benchmarks, determining the extent to which CRA incentives have influenced LMI credit availability relative to other factors is not straightforward.