Community Reinvestment and Local Economic Development in Rural Areas

Abstract

The Community Reinvestment Act (CRA) provides community development organizations and practitioners with a legal basis for requiring lending institutions to meet the credit needs of their community. Data on the performance of lending institutions, however, are limited or frequently in a form inaccessible to community development organizations and practitioners, particularly for those in rural areas. Lending institutions are uncertain as to what evidence they can provide regulators and community organizations to demonstrate they are satisfying community reinvestment guidelines. In this paper we discuss several ways of evaluating local capital markets in rural areas, and provide an example of how this information can be obtained through a community survey.