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Community Reinvestment Act (community + reinvestment_act)
Selected AbstractsImpact of the Community Reinvestment Act on New Business Start-Ups and Economic Growth in Local Markets,JOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 4 2009Nada Kobeissi Economic growth in the United States has historically bypassed many minorities and low-income communities. Some researchers and community advocates assert that the deterioration of these communities is in part caused by financial institutions' redlining and neglect. To rectify the situation, the government introduced the Community Reinvestment Act (CRA) for the purpose of encouraging banks and saving institutions to become more socially responsible and help meet the credit needs of communities in which they are located. The CRA was the government's response to bank lending discrimination. However, when passing the Act, Congress was equally concerned with reversing or at least halting disinvestment from inner-city communities and in turn revitalizing local economies. Many believe that the availability of credit to establish, refinance, and improve small businesses is critical to the well-being of local communities. Therefore, through the provision of small business loans, the CRA could be envisioned as a catalyst toward achieving that goal. Thus the aim of this paper is to investigate potential relationship between banks' CRA lending activities, and new business start-ups and economic growth in local markets. The paper proposes that new start-ups will have spillover effects that will consequently contribute to community development. After controlling for several potential variables that could have an impact on business start-ups and community developments, the study found a strong positive effect. Beside its social and economic implications, the study also considered policy implications associated with the CRA regulation as a welfare improving initiative in low-income communities. It offers ground for certain government intervention in the loan market. [source] OUT OF THE GOODNESS OF THEIR HEARTS?JOURNAL OF URBAN AFFAIRS, Issue 1 2008REGULATORY AND REGIONAL IMPACTS ON BANK INVESTMENT IN HOUSING AND COMMUNITY DEVELOPMENT IN THE UNITED STATES ABSTRACT:,Banks are considered key actors in affordable housing and community development in the United States. Their involvement in such activities may be due partly to their dependence on economic rents generated from development. In the United States, however, banks are encouraged to support such activities by the federal 1977 Community Reinvestment Act (CRA). I examine how different factors explain the CRA-qualified investments by banks. Qualified investments are essentially nondebt financial resources provided as an equity investment or grant with a community development purpose. I find that the identity of the regulator (the United States has four banking regulators) has a major impact on the level of qualified investments. Other things equal, a difference in regulators can cause a bank's qualified investments to more than double. Besides suggesting that some regulators may be enforcing a major portion of CRA regulations more vigorously than others, this also suggests that the CRA plays a major role in bank investment in community development. This has policy implications not just in the United States but also in other countries that might consider replicating the CRA. [source] Do CRA Agreements Influence Lending Patterns?REAL ESTATE ECONOMICS, Issue 1 2003Raphael W. Bostic This article considers the broader impact of Community Reinvestment Act (CRA) agreements,bank pledges to extend a certain volume of lending to targeted groups and communities,by examining whether they are associated with changes in lending to lower,income and minority communities in the markets where they are initiated. We find the number of newly initiated CRA agreements in a county to be associated with significant increases in CRA, minority and overall conventional mortgage lending in a county over a three,year period. The results are consistent with the view that the increases in lending represent new lending, with some evidence suggesting that the increases in lending are relatively short,lived. Overall, the results are consistent with the notion that lenders view CRA agreements as a form of insurance against the potentially large and unknown costs associated with fair lending violations, poor CRA performance ratings and adverse publicity from CRA,related protests of mergers or other applications. The results are also consistent with the view that the effectiveness of CRA agreements in increasing lending activity is ultimately determined by the persistence and sophistication of community groups in monitoring compliance with CRA agreements. [source] Online Banking and the Community Reinvestment ActBUSINESS AND SOCIETY REVIEW, Issue 2 2006DANIEL D. SINGER First page of article [source] | ||||||||||