Since the CRA's enactment, the implementing regulations have been substantially amended three times--in 1989, 1995, and 2005. In each case, changes to the regulations reflected both experience gained in the implementation of the law as well as ongoing developments in financial markets and the economy... In the view of many, urban decay was partly a consequence of limited credit availability
, which encouraged urban flight and inhibited the rehabilitation of declining neighborhoods...Thirty years ago, the secondary market for mortgages was rudimentary at best, which limited local loan originators' access to capital and reduced their ability to diversify credit risks geographically.3 Informational problems also inhibited lending in some urban areas...Also, interest rate ceilings on mortgages in some locations effectively blocked lending to potential borrowers judged to pose higher risks,
and interest rate ceilings on deposits (notably, the infamous Regulation Q) led to periodic episodes of disintermediation and reduced availability of mortgage credit ...The CRA reaffirmed the long-standing principle that financial institutions must serve "the convenience and needs," including credit needs, of the communities in which they are chartered.
The obligation of financial institutions to serve their communities was seen as a quid pro quo
for privileges such as the protection afforded by federal deposit insurance...The CRA was only one of a series of laws passed during the 1970s intended to reduce credit-related discrimination, expand access to credit, and shed light on lending patterns. The CRA itself focused on the provision of credit to low- and moderate-income communities...