The Future of the Community Reinvestment Act

In February 2019, the Federal Reserve Board, Federal Reserve Bank of Philadelphia, and Penn IUR jointly convened a research symposium to consider the future of the Community Reinvestment Act (CRA), a federal law enacted in 1977 to combat redlining and discrimination in mortgage markets. Nearly 100 stakeholders—including Federal Reserve Board governors and policymakers, regulators and rule writers, academics and researchers, community development leaders and policy practitioners—came together at the Federal Reserve Bank of Philadelphia to discuss the past, present, and future of the Community Reinvestment Act (CRA). The conference was especially timely given the recent call by Office of the Comptroller of the Currency (OCC) for comments on how to modernize the CRA. The one-day conference focused on using data-driven approaches to evaluate the effectiveness of the CRA in its current form, lending an evidence-based lens to forecast how to best modify the CRA going forward. Two issues predominated: how to modernize the CRA’s local bank branch-centric framework in an age of internet banking and how to respond to the new challenge of access to affordable housing in resurgent urban areas.

In this policy brief, entitled “The Future of the Community Reinvestment Act,” we provide background on the issues and summarize the discussion and research findings presented at the symposium. The resulting papers from the conference are now available as working papers on the Federal Reserve Bank of Philadelphia and Penn IUR websites (see links below). They will be published as a special volume of Housing Policy Debate, co-edited by Lei Ding and Susan Wachter, that addresses issues surrounding the modernization of the CRA.

• Research Symposium on the Community Reinvestment Act: Introduction | Susan Wachter and Lei Ding
• Who Lends Beyond the Red Line? The Community Reinvestment Act and the Legacy of Redlining | Kevin A. Park and Roberto G. Quercia
• The Community Reinvestment Act and Bank Branching Patterns | Lei Ding and Carolina Reid
• Is the CRA Still Relevant to Mortgage Lending? | Paul Calem, Lauren Lambie-Hanson, and Susan Wachter
• The Community Reinvestment Act: What Do We Know, and What Do We Need to Know?| Laurie Goodman, Jun Zhu, and John Walsh
• The Community Reinvestment Act at 40: Why Is It Still Necessary to “Lean” on Banks? | Lawrence J. White
• Quantitative Performance Metrics for CRA: How Much “Reinvestment” is Enough? | Carolina Reid
• Updating CRA Geography: It’s Not Just About Assessment Areas | Mark Willis
• Concluding Observations on CRA Reform | Michael Barr