Putting Race Explicitly into the CRA

In addition to supporting minority wealth creation, this new twenty-first century market must support and empower minority neighborhoods with investments in neighborhood-based initiatives. Examples of these kinds of investments include: support for neighborhood redevelopment; the creation of neighborhood anchors such as major retail and grocery stores; financing housing and infrastructure; brownfield and vacant-property development; and support for minority small businesses with technical assistance, affordable loans, and equity investments.

Through the CRA, we can promote public/private partnerships that encourage integrated and inclusive communities. These partnerships will develop initiatives that provide technical and public assistance in the
design, packaging, and financing of neighborhood-based projects. These partnerships will promote employment opportunities for local residents and provide subcontracting opportunities for local minority and other community-based firms. The CRA can also be used to measure the extent to which banks do business with minority vendors, contractors, and professionals.

Explicitly including race in the CRA allows us to determine when, where, and how to effectively structure market interventions to correct past market failures. It allows us to develop strategies that challenge racial, social, and economic stratification by including a commitment to develop robust markets in minority communities.  We must use the CRA and other public policy tools to correct market failures that support racial market segmentation and to create sustainable markets that are not dependent on the rationing of credit based on the observationally distinguishable characteristic of race.

1 12 U.S.C. 2901.
2 15 U.S.C. 1691 et seq.
3 42 U.S.C. 3601 et seq.
4 Ben S. Bernanke, "The Community Reinvestment Act: Its Evolution and New Challenges,"The Community Affairs Reserch Conference, Federal
Reserve Board, Washington, DC, 2007.
5 National Community Reinvestment Coalition, "Income Is No Shield Against Racial Differences in Lending II: A Comparison of High-Cost
Lending in America's Metropolitan and Rural Areas," Washington, DC, 2008.
6 Jason Reece, "Will you be my neighbor? Housing and neighborhood diversity in the US," lecture, February 19, 2008, Kirwan Institute, Ohio
State University; and Reece, "Race, Class, and Opportunity: Understanding the Convergence and Divergence of Race and Class in the US.," lecture, January 16, 2008, Kirwan Institute. Both at 7 K. T. Jackson, Crabgrass Frontier: The Suburbanization of the United States (New York: Oxford University Press, 1985).
8 Frederick Babcock, The Valuation of Real Estate (New York: McGraw-Hill, 1932), 91.
9 Ibid., 86.
10 N. Miller and S. Markosyan, "The Academic Roots and Evolution of Real Estate Appraisal," Appraisal Journal, 71(2) (2003): 172–84.
11 38 U.S.C. §§ 3451.
12 D. S. Massey, "Origins of Economic Disparities: The Historical Role of Housing Segregation," in Segregation: The Rising Costs for America,
ed. J. H. Carr and N. K. Kutty (New York: Routledge, 2008), 39–80.
13 Reece, lectures at Kirwan Institute, 2008 (see note 6).
14 G. W. Domhoff, "Power in America: Wealth, Income, and Power,"from Who Rules America? Available at

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