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Economic Commentary

Information Dynamics and CRA Strategy

Congress enacted the Community Reinvestment Act of 1977 (CRA) to combat redlining, whereby lenders allegedly curtail the supply of mortgage credit to particular neighborhoods, discounting the creditworthiness of the applicants because the neighborhood itself is considered undesirable. Under the CRA’s provisions, bank regulators are required to use their supervisory authority to encourage each depository institution including those in low- and moderate income communities-to help meet its community’s credit needs consistent with safe and sound lending practices.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Avery, Robert B. , Patricia E. Beeson, and Mark S. Sniderman. 1997. “Information Dynamics and CRA Strategy.” Federal Reserve Bank of Cleveland, Economic Commentary 2/1/1997.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International