Community development under the CRA
With political turnovers, technological advances and demographic
shifts, it sometimes seems like change is the only constant in community
development. In this issue of CommunityDividend,
we explore a variety of subjects that reflect this idea—locally,
nationally and internationally.
Our cover story explores the national Community
Reinvestment Act, or the CRA. This landmark 1977 legislation requires
lending institutions to invest in low- or moderate-income communities.
In response to emerging issues and needs, the CRA was revised in
1995 and will be reviewed again in 2002. To foster discussion of
the law before further changes are proposed, our story outlines
the definition of community development under this regulation.
As the community development field evolves and shifts, new topics
constantly emerge. Two additional features in this issue highlight
such topics. In an excerpt from a speech delivered this spring,
Federal Reserve Governor Edward M. Gramlich addresses the widespread
problem of abusive and deceptive lending practices, or "predatory
lending." Gramlich acknowledges the difficulty of defining
predatory lending and urges education as the best defense against
these practices. A feature by Buzz Roberts, vice president for policy
at Local Initiatives Support Corporation, provides an introduction
to the New Markets Tax Credit program. This exciting new community
development tool promises to fuel $15 billion in community development
investment over the next six years.
Changes on the other side of the globe are the focus of our
last feature, which relates former Community Affairs Analyst
Thomas Moore's experiences as a consultant to a new lending institution
in Mongolia. The article includes a brief overview of Mongolia's
history and explores the challenges that the nation faces as it
moves from Soviet-style market restrictions to a free-market economy.
On the final pages of this issue, we focus on a change that's very
close to home. In "A Conversation
with . . .", we bid farewell to Community Affairs Officer
JoAnne Lewellen, who recently left the Minneapolis Fed. In an interview
conducted shortly before she left, Lewellen discusses the CRA and
other topics and reflects on the evolution and accomplishments of
Community Affairs during her tenure with the Federal Reserve System.
As this issue of Community Dividenddemonstrates, changes
in the community development field often provide opportunities for
progress and reflection. We hope the information presented here
will help you embrace any changes you might encounter as you pursue
your development efforts.