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NCRC forecast: Weakening the Community Reinvestment Act would reduce lending by hundreds of billions of dollars

NCRC used data collected under the Community Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA) for the years 2012 through 2016 to calculate the sum of loan amounts made during this period for every census tract in the United States.

Building upon the work of research in academia and the Federal Reserve, we calculated the approximate impact of the CRA on both mortgage and small business lending in every community. We extrapolated from that work to consider the potential impact of significant weakening of CRA.

We believe that a loss of between 10% and 20% in loan volume for loans made in low- and moderate-income census tracts is consistent with the existing research on the impact of CRA.* Nationally, that would mean a loss of between $52 billion and $105 billion in loans in low- and moderate-income census tracts over five years.

Our report presents those approximated losses at the national, state, and Congressional District levels.

CRA Impact dollar loss V7




Photo by Masaaki Komori via Unsplash

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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