An Analysis of the Implementation and Impact of the 2004-2005 Amendments to the Community Reinvestment Act Regulations: The Continuting Importance of the CRA Examination Process

In 2004 and 2005, the four federal banking agencies that enforce the Community Reinvestment Act (CRA) amended their CRA regulations. Community groups were concerned that these amendments would have a negative impact on bank CRA performance. In particular, they were concerned that community development lending and investment and the provision of bank branches and other banking services in low- and moderate-income neighborhoods would decline. This article studies the impact of the changes. In summary, the study found that: 1) the CRA examination process has an impact on bank behavior; 2) community development lending and investment by certain lending institutions declined following the amendments while for other institutions such lending increased; and 3) the amount of information on CRA examination about bank branching patterns declined following the amendments