Do Community Reinvestment Act Agreements Work?
Author: Brian Schmitt
Dissertation School: Rutgers University
Pages: 251
Publication Date: May 2002
Availability:
Available from the HUD USER Helpdesk P.O. Box 23268 Washington, DC 20026-3268 Toll Free: 1-800-245-2691 Fax: 1-202-708-9981 Email: oup@oup.org
Access Number: 10756
Abstract:
This dissertation hopes to prove that the Community Reinvestment Act has substantially strengthened community-based organizations' capacities to influence residential credit availability in their local housing markets. Since 1977, community groups have used the Community Reinvestment Act (CRA) to negotiate hundreds of billions of dollars in lender commitments to low-and-moderate income and minority persons an neighborhoods. Although bank mergers often provide the impetus for the CRA agreement, many mergers happen without one. This situation creates an unusual opportunity to perform a "natural experiment" to test the effects bank mergers have on residential credit availability an the effectiveness of CRA agreements. Do bank mergers diminish the residential mortgage credit in certain neighborhoods? Can a community group use a CRA agreement to offset the potential negative effects of a merger? Despite the wealth of data on the lending behavior of banks, there has been extremely little systematic follow-up to measure the effects of CRA agreements on the people and the places which they are meant to help.
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