Neighborhoods and Banking
26 Pages Posted: 15 Nov 2012
Date Written: 1995
Abstract
Federal banking agencies recently revised the regulation implementing the Community Reinvestment Act, which encourages banks to lend in low- and moderate-income neighborhoods. Since there is little conclusive empirical evidence that banks fail to meet the credit needs of such neighborhoods, however, the CRA regulations should instead be viewed as a tax on banking. Direct public subsidies for community development would be a more efficient means of improving the condition of low-income neighborhoods.
Suggested Citation: Suggested Citation
Lacker, Jeffrey M., Neighborhoods and Banking (1995). FRB Richmond Economic Quarterly, vol. 81, no. 2, Spring 1995, pp. 13-38, Available at SSRN: https://ssrn.com/abstract=2129329
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