GalleryAlthough the Community Reinvestment Act has improved loan availability among small businesses run by minorities, equality with equally creditworthy white-owned firms remains elusive.
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 […]
