{"product_id":"finance-and-economics-discussion-series-giving-credit-where-credit-is-due-the-community-reinvestment-act-and-mortgage-lending-in-lower-income-neighborhoods-1288706979","title":"Finance and Economics Discussion Series: Giving Credit Where Credit Is Due? the Community Reinvestment ACT and Mortgage Lending in Lower-Income Neighborhoods","description":"\u003cp\u003e\u003cstrong\u003eISBN:\u003c\/strong\u003e 1288706979\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eAuthor:\u003c\/strong\u003e Bhutta, Neil\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eCondition:\u003c\/strong\u003e New\u003c\/p\u003e\u003cp\u003eI identify and quantify the mortgage supply effect of the Community Reinvestment Act (CRA), a law mandating that banks help provide credit in lower-income neighborhoods, by exploiting a discontinuity in the selection rule determining which census tracts CRA targets. Using a comprehensive source of micro data on MSA mortgage applications, I find that CRA affects bank lending primarily in large MSA's, where banks are most scrutinized. The analysis indicates that CRA's effect on bank originations was about 4% between 1994 and 1996, and expanded to 8% in 1997-2002, consistent with the timing of a reform strengthening CRA. I provide some evidence that marginal loans go to atypical, potentially higher-risk borrowers. The results also indicate net \"crowd-in\" lending to targeted tracts by unregulated institutions rises in post-reform years, in particular to those areas that have had relatively low home purchase volume in the recent past, consistent with a model of information externalities in credit markets. Finally, using changes in tract eligibility status following the release of Census 2000 data as an additional source of variation, I find that CRA increased bank lending to newly targeted tracts in large MSA's by 4-5% in 2004 and 2005.\u003c\/p\u003e","brand":"Mia Karts","offers":[{"title":"Default Title","offer_id":51963591754016,"sku":"NEW1288706979","price":31.62,"currency_code":"USD","in_stock":true}],"url":"https:\/\/miakarts.com\/products\/finance-and-economics-discussion-series-giving-credit-where-credit-is-due-the-community-reinvestment-act-and-mortgage-lending-in-lower-income-neighborhoods-1288706979","provider":"Miakarts Books","version":"1.0","type":"link"}