Resolving the Community Reinvestment Act Dilemma: Eliminating

Abstract

Discusses the existence of race-based discrimination in mortgage lending. According to a study by the Federal Reserve Bank of Boston, black applicants were more than twice as likely to be rejected for a mortgage loan compared to white applicants with the same income, and that Hispanic applicants were about one and a half times more likely to be rejected. The Community Reinvestment Act (CRA) was enacted to solve unjust practices and serve lower income areas. Because the CRA is so broad and flexible, banks have the unique opportunity to regulate themselves to a certain extent and thus minimize their own regulatory constraints.