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In 2001, the four federal banking agencies that enforce the Community Reinvestment Act (CRA) began a review of CRA regulations they adopted in 1995. The review lasted until they issued amendments in 2004 and 2005. The review process was controversial, tortuous, and divisive. By the time it was over, residents of the communities the CRA was intended to benefit, including low- and moderate-income and predominantly minority neighborhoods, gained a victory in their efforts to promote community reinvestment and economic development, but also lost significant ground. The victory was strengthened regulation of subprime and predatory lending. The losses included a reduction in the number of banks and savings associations subject to more rigorous CRA standards, a loss in the amount of publicly available data about small business and small farm lending, and the elimination of community development lending and investment and retail banking service requirements for large savings associations. As a result of the amendments to the CRA regulations, underserved communities face a reduction in loans, investments, and services.

This article describes the CRA and the 1995 CRA regulations, identifies some of the key issues in the CRA amendment process, describes the amendments to the regulations, evaluates the amendments' likely effect on underserved communities, and offers suggestions to advocates about how they can use the amended CRA regulations to help underserved communities and how to prevent further cutbacks in CRA protections.