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Although the Community Reinvestment Act has improved loanavailability among small businesses run by minorities, equalitywith equally creditworthy white-owned firms remains elusive.

Bates, Timothy and Robb, Alicia (2015) Although the Community Reinvestment Act has improved loanavailability among small businesses run by minorities, equalitywith equally creditworthy white-owned firms remains elusive. USApp– American Politics and Policy Blog (30 Jun 2015). Website.

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Abstract

In 1977 the Federal Government introduced the Community Reinvestment Act (CRA), which requires banks to provide credit in low-income areas, which often include minority neighborhoods. Using data on small businesses seeking bank loans, Timothy Bates and Alicia Robb find that banks were using inconsistent standards to evaluate the loan applications of black and Latino small businesses. In minority neighborhoods where CRA scrutiny was high, they were as likely as equally creditworthy whites to receive loans, while in other urban neighborhoods, they were disproportionately rejected. They write that in order to address this loan gap, regulatory authorities should rate banks comprehensively on their minority business lending performance in all areas, and publicize those rankings widely.

Item Type: Online resource (Website)
Official URL: http://blogs.lse.ac.uk/usappblog/
Additional Information: © 2015 The Authors, USApp – American Politics and Policy Blog, The London School of Economics and Political Science.; Online
Divisions: LSE
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
H Social Sciences > HT Communities. Classes. Races
Sets: Collections > LSE American Politics and Policy (USAPP) Blog
Date Deposited: 10 Jul 2015 10:38
Last Modified: 16 Feb 2020 00:29
URI: http://eprints.lse.ac.uk/id/eprint/62656

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