Assessing the CRA's Necessity and Efficiency*

Robert B. Avery, Raphael Bostic and Glenn B. Canner

No 8606, Working Paper from USC Lusk Center for Real Estate

Abstract: This paper seeks to address questions about both the need for the CommunityReinvestment Act (CRA) and its efficiency. Using data from a recent survey of theperformance and profitability of CRA-related lending activities, three main conclusionsemerge. First, there is evidence that a majority of surveyed institutions engaged in somelending activities that they would not have in the absence of the CRA. Second, regardingthe question of the CRA’s need and efficiency, the results are mixed. we find mixedresults. The vast majority of institutions responding to the CRA reported that they wereable to do so profitably, while a significant minority of institutions incurred lossesconducting some of their marginal CRA-related lending activities. Considered together,these results support the view that the CRA has helped to increase credit flows, althoughnot without some cost. Finally, quantitative evidence suggests that marginal CRArelated lending activity tended to be small, measured either by lending volumes andimpact on profitability.

Keywords: Community Reinvestment Act; regulatory efficiency; Affordable Housing (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://lusk.usc.edu/sites/default/files/working_papers/wp_2003_1016.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:luk:wpaper:8606

Access Statistics for this paper

More papers in Working Paper from USC Lusk Center for Real Estate Contact information at EDIRC.
Bibliographic data for series maintained by Chris Steins ().