Community Access to Credit

p Running Head : COMMUNITY ACCESS TO CREDIT

: Community Access to Credit

Name

Institution

Introduction

This seeks to look into the performance of CRA (Community Reinvestment Act ) that was enacted in 1977 to reduce redlining in low and moderate income communities in across US . In to be effective in answering this question , someone has to be aware of the facts that led to the establishment of the act and the prevailing economic circumstances . CRA has been successful but it has not exploited its full potential which leaves a room for

improvement . This emanates from the fact that the agencies mandated to monitor and enforce CRA do not venture a lot into allocating credit which then allows the commercial banks to get a loophole of not being accountable for the failure of not lending to high risk clients like the low and moderate income communities . The act has been called many names like a lifeline for the disadvantaged communities mostly plagued by black people that have led to creation of trillions of dollars much needed to bring community development in those areas . Others view it in a different light that is misguided and has oversight in capital appropriation falling short of calling it an abomination in the society that has caused mortgage crisis and the financial crisis that ensues (Timothy , 2004

A hallmark achievement of CRA has been `democratizing capital . This is a practice which is accomplished through two ways . The first way is leaving decisions of the capital distribution...