Value of CRA

Jennifer:

We refer you to the web page of the National Community Reinvestment Coalition
(NCRC) at http://www/ncrc.org for lots of information about how CRA works and
its benefits. We are on (202) 628-8866 if anyone wants to discuss further.

On a national level, the lending trends show a significant increase in lending
to low- and moderate-income borrowers over the last several years. For example,
low- and moderate-income borrowers received 57 percent more single-family loans
in 1998 than 1993 while all borrowers received 20 percent more loans.
African-Americans received 70 percent more loans. It is not likely that
traditionally underserved populations would have received increases in loans
that outsripped the overall increase were it not for CRA.

The trends are similar for conventional home purchase loans - 75 percent more
for low/mod borrowers from 1993 to 1998, 94 percent more for African-Americans,
and about 55 percent more overall.

If this is not convincing, look at some CRA exams. You will find differences in
performance between banks that have Satisfactory and Outstanding CRA exams, and
between those that have Satisfactory and Needs to Improve exams.

Finally, consider all the partnerships for reaching underserved populations.
Your bank participates in a program established by NCRC, the SBA, and major
lenders. Community Express reaches minority- and women-owned businesses in low-
and moderate-income communities. Community organizations around the country can
talk about similar programs that have reached thousands of borrowers. These
programs probably would have not reached their present scale were it not for
CRA.

Hope this helps you with your baffled colleagues.


Josh Silver
Vice President of Research and Policy
National Community Reinvestment Coalition



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