Talk:Community Reinvestment Act

From Wikipedia, the free encyclopedia

Overall, this is a pretty biased entry. It begins to read like a college term paper with a central thesis about how bad banks are. I agree there are very reasonable pro's and con's for each side of the argument (for/against CRA), but this is a very one dimensional explanation of the act. I think the best way to go is to take the editorializing out of the "Changes in 2005" section, and creating a new "Criticism" category. This could also present the bank's points of view in a more neutral light. Dapdeimos (talk) 02:03, 12 December 2007 (UTC)

English is not my first language, so i may be completely wrong here, but this sentence don't make sense to me. "CRA, requires banks and *savings and loans* to offer credit throughout their entire market areas and prohibits them from targeting only wealthier neighborhoods with their lending and services" How can saving and loan offer credit?

I would put it this way, CRA required banks to service underserved areas and groups or something like that

—"Savings and Loans" are not always "banks." Exclusive S&L shops were more prevailant prior to the 1980s, however, there are still some around in some areas, just not as many I believe. S&L shops primarily dealt with mortgages and less with demand deposit accounts. Amdsupport 20:53, 7 April 2007 (UTC)

[edit] Subprime lending CRA and redlining

Here is a good source:

Last year, blacks were 2.3 times more likely, and Hispanics twice as likely, to get high-cost loans as whites after adjusting for loan amounts and the income of the borrowers, according to an analysis of loans reported under the federal Home Mortgage Disclosure Act...The study suggests that the concentration of high-cost loans is not caused by an area’s racial makeup, though there is a correlation, said Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Association. But the Fed study also suggests that a big part of the reason may have to do with the lenders that minority borrowers do business with. The biggest home lenders in minority neighborhoods are mortgage companies that provide only subprime loans, not full-service banks that do a range of lending. It may be that these borrowers do not have access to traditional banks, because there are no branches near them. The Community Reinvestment Act, enacted 30 years ago, was intended to address redlining by forcing banks to make loans in lower-income areas. But the law’s provisions do not apply to banks in neighborhoods where they have no branches. “You could go into a middle-class area in Queens County that is white and there will be lots of banks on the shopping street,” said Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York and a deputy secretary of the Department of Housing and Urban Development in the first Bush administration. “If you go to an area that is equal income and that is black, you won’t see many.”

futurebird (talk) 14:43, 31 December 2007 (UTC)

[edit] Criticism paragraph

The last edit is poorly written. I refer to the last two sentences of the criticsm section. It has factual errors (there is no such thing as a 'FFF' rated junk bond, the lowest rating is 'D') and the point the author is trying to make is hard to determine. If he is saying that securitization created the subprime mess that is a different issue - I believe - than saying that banks trying to meet their CRA obligations is a significant cause of the subprime debacle. —Preceding unsigned comment added by Rbedmiston (talk • contribs) 21:32, 14 April 2008 (UTC)