What is the value of CRA?

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Jennifer:

I appreciate your position. As a bank employee before the CRA law was
passed, my request to be appointed as an "ombudsperson" for the community
was treated with incredulity, especially being that I had just gotten an
MBA. Needless to say, my days at the bank were numbered.

Re your request, I read an excellent report written by two professors that
goes a long way towards documenting the impact of CRA lending on inner city
lending for the past 10 years. It's entitled "Islands of Decay in Seas of
Renewal: Housing Policy and the Resurgence of Gentrification" I downloaded
from the Fannie Mae Foundation web site. Please let me know if you find it
helpful. And good luck.

Greg

At 07:48 AM 4/6/00 -0400, Jennifer Freeman wrote:
> Yes, I mean this to be provocative and I seek your help. I work
>in a very large commercial bank in New York (in the CRA compliance, small
>business lending reporting area). Today I had a conversation with a
>colleague in the department who argued the following point: There is
>no hard empirical data that definitively shows that communities are better
>off due to banks’ CRA lending than had CRA not been in effect. Of
>course I opposed this stance, but am not sure my voice was heard. Could
>anyone please tell me where I can find such a report that will clearly
>prove that CRA has positively affected communities? I would like to be more
>knowledgeable in future conversations and help to educate them on these
>facts. It seems to me that my department is precisely the group of people
>in the bank that needs to know just how much our CRA lending really IS
>affecting communities. There seems to be a sense of “mandate”
>in our group – that we do our jobs (crank the numbers, put together
>pretty reports) for the sole purpose of maintaining our high CRA rating
>– but what this really means, seems to have been lost behind the
>spreadsheets. It should not be so. Thank you in advance for any
>referenced material. JF
Greg Todd for
Park Slope Food Coop Environmental Committee
782 Union Street
Brooklyn, NY 11215
tel. 718-858-8803
fax 718-852-5997
email becnc@igc.org

"Good food at good prices through cooperation"




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Dear Jennifer,

I would look at the website of the Woodstock Institute in Chicago, as
Dan Immergluck has recently written a rebuttal to exactly this claim
being made by a couple of economists at the Dallas Federal
Reserve. Also, Alex Schwartz has written an article or two on this (one
was from 1998 in Housing Policy Debate, which you can access from Fannie
Mae's website). Finally, for really useful general background on why
we needed the CRA in the first place, I would get a copy of Greg
Squire's 1991 book "From REdlining to Reinvestment". Good luck,

James DeFilippis

On Thu, 6 Apr 2000, Jennifer Freeman wrote:

>
> Yes, I mean this to be provocative and I seek your help. I work in a very
> large commercial bank in New York (in the CRA compliance, small business
> lending reporting area). Today I had a conversation with a colleague in the
> department who argued the following point:
>
> There is no hard empirical data that definitively shows that communities are
> better off due to banks’ CRA lending than had CRA not been in effect.
>
> Of course I opposed this stance, but am not sure my voice was heard. Could
> anyone please tell me where I can find such a report that will clearly prove
> that CRA has positively affected communities? I would like to be more
> knowledgeable in future conversations and help to educate them on these
> facts. It seems to me that my department is precisely the group of people in
> the bank that needs to know just how much our CRA lending really IS
> affecting communities.
> There seems to be a sense of “mandate” in our group – that we do our jobs
> (crank the numbers, put together pretty reports) for the sole purpose of
> maintaining our high CRA rating – but what this really means, seems to have
> been lost behind the spreadsheets. It should not be so.
>
> Thank you in advance for any referenced material.
>
> JF
>
>
>
>



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