In Focus: Federal Reserve Banks Examine Ways to Aid Compliance with CRA

By Fraser, Katharine | American Banker, November 8, 1999 | Go to article overview
Save to active project

In Focus: Federal Reserve Banks Examine Ways to Aid Compliance with CRA


Fraser, Katharine, American Banker


The Federal Reserve is pursuing novel measures to help banks comply with the Community Reinvestment Act.

Rules implementing the law require banks to meet three tests involving lending to, investing in, and serving local communities. The Fed -- working with local groups, governments, and developers -- is trying to help banks to find sound loans and investments.

For instance, the Federal Reserve Bank of San Francisco is working with California state officials, brokerages, insurance companies, and banks to create investment securities backed by small-business loans. Banks buying the securities could get CRA investment credit, and those selling the loans -- which would be guaranteed in part by the state -- would gain the liquidity to make more loans.

The new securities could be issued next year, said Joy Hoffmann Molloy, assistant vice president and community affairs officer of the San Francisco Fed. The investments could qualify under the CRA test, just as purchases of securities backed by mortgages for low- to moderate-income borrowers often do.

"For a long time when you said 'CRA,' you thought of affordable housing," Ms. Hoffmann Molloy said. "The industry has evolved. Small business has become more of a part of community and economic development."

The effort dovetails with small-business development initiatives under way in the Federal Reserve system.

To spur more CRA-related small-business lending, the Federal Reserve Bank of Cleveland held several meetings in the past eight months at which bankers, small-business owners, and credit counselors compiled a list of recommendations for the industry.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

In Focus: Federal Reserve Banks Examine Ways to Aid Compliance with CRA
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?