Three reforms intended to expand access to credit in underserved communities were included in the savings and loan bailout bill of 1989 (FIRREA): the Community Reinvestment Act was strengthened, Home Mortgage Disclosure Act reporting requirements were expanded, and the Federal Home Loan Banks were required to establish a subsidy program for affordable housing. This paper examines three political battles fought over the implementation of these reforms: the efforts of finance industry interests to pressure for legislative and regulatory rehef, which stimulated opposition from consumer advocates; the response of the regulatory agencies to their new mandate; and the extent to which FIRREA's priority goal—restoring safety and soundness—contributed to the credit crunch in the multifamily housing sector between 1990 and 1993.
Get full access to this article
View all access options for this article.
References
1.
Barth J.R., and R.D. Brumbaugh, Jr.1992. Turmoil among depository institutions: Implications for the U.S. real estate market. Housing Policy Debate3:901-926.
2.
Becker, G.1993. The evidence against banks doesn't prove bias. Business Week 13 April: 18.
3.
Britt, P.1992. FHFB will aim to boost community lending activity . Savings Institutions113(10):9.
4.
Britt, P.1993. CRA update: A second opinion. Savings and Community Banker2(10):11-12.
5.
Brimelow, P.1993. Racism at work?National Review45:42.
6.
Bush, V.1992. The business learns the art of CRA. Savings Institutions113(6):14-19.
7.
Bush, V.1993. The future of the FHLB system. Savings and Community Banker2(5):27-30.
8.
Canner, G.B., and D.S. Smith.1992. Expanding HMDA data on residential lending: One year later. Federal Reserve Bulletin78:801-824.
9.
Canner, G.B., W. Passmore, and D.S. Smith.1994. Residential lending to low-income and minority families: Evidence from the 1992 HMDA data. Federal Reserve Bulletin80:79-108.
10.
Carr, J.H., and I.F. Megbolugbe .1993. The Federal Reserve Bank of Boston Study on Mortgage Lending Revisited. Journal of Housing Research4:277-313.
Congressional Budget Office.1993. The Federal Home Loan Banks in the housing finance system. Washington, D.C.
13.
Consumer Bankers Association.1992. Affordable mortgage survey. Arlington, Virginia .
14.
Dalton, L.C.1989. The limits of regulation: Evidence from local plan implementation in California. Journal of the American Planning Association55:151-168.
15.
Davis, J.E.1994. The Affordable City Toward a Third Sector Housing PolicyPhiladelphia, Pennsylvania: Temple University Press.
16.
DiPasquale, D., and Cummings, J.L.1992. Financing multifamily rental housing: The changing role of lenders and investors. Housing Policy Debate3:77-116.
17.
England, R.S.1993. Washington's new numbers game. Mortgage Banking September:38-54.
18.
Evans, D.F., Jr.1993. Charting the FHLB system's future. Savings and Community Banker2(6):6-7.
Federal Reserve Board Flow of Funds.1992. Federal Reserve Bulletin78:A36.
21.
Fergus, J.T., and J.L. Goodman, Jr.1994. The 1989-92 credit crunch for real estate: A retrospective. Journal of the American Real Estate and Urban Economics Association22:5-32.
22.
Fishbein, A.J.1992. The ongoing experiment with "regulation from below": Expanded reporting requirements for HMDA and CRA. Housing Policy Debate3:601-636.
23.
Freddie Mac. nd. Freddie Mac Affordable Housing Initiatives Information Summary . McLean, Virginia. (Note: in 1993 this was the most current information available.)
24.
Galster, G.C.1992. Research on discrimination in housing and mortgage markets: Assessment and future directions. Housing Policy Debate3:639-684.
25.
Garwood, G.L., and D.S. Smith.1993. The Community Reinvestment Act: Evolution and current issues. Federal Reserve Bulletin79:252-267.
26.
Goetz, E.G.1993. Shelter Burden: Local Politics and Progressive Housing Policy. Philadelphia, Pennsylvania: Temple University Press.
27.
Hancock, D., and J.A. Wilcox.1994. Bank capital and the credit crunch: The roles of risk-weighted and unweighted capital regulations. Journal of the American Real Estate and Urban Economics Association22:59-94.
28.
Hill, E.W.1993. The changing role of depository institutions in the mortgage market. Paper presented at the Fannie Mae University Colloquium Series, Wayne State University , 10 February.
29.
ICF Inc.1991. The secondary market and community lending through lenders' eyes. Report to the Federal Home Loan Mortgage Corporation. Fairfax, Virginia.
30.
Joint Center for Housing Studies.1993. State of the Nation's Housing 1993Cambridge, Massachusetts : Joint Center for Housing Studies, Harvard University .
31.
Kushner, J.A.1992. Federal enforcement and judicial review of the Fair Housing Amendments Act of 1988. Housing Policy Debate3:537-600.
32.
LaWare, J.P.1993. Statement before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, February 24, 1993. Federal Reserve Bulletin79:307-313.
33.
Lea, M.J.1990. Housing and the capital markets. In Building Foundations: Housing and Federal Policy, eds. D. DiPasquale and L. C. Keyes.Philadelphia: University of Pennsylvania Press.
34.
Lindsey, L.B.1993. Statement before the Subcommittee on General Oversight, Investigations and the Resolution of Failed Financial Institutions of the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, September 17, 1993. Federal Reserve Bulletin79:1020-1025.
35.
MacDonald, H.I.1992. Special interest politics and the crisis of financial institutions in the USA. Environment and Planning10:123-146.
36.
Marshall, W.T.1993. Serving the underserved. Savings and Community Banker2(8):15-19.
37.
Mayer, N.S.1991. Preserving the low-income housing stock: What nonprofit organizations can do today and tomorrow. Housing Policy Debate2:499-534.
38.
Menatian, M.1992. Building community power through CRA. Shelterforce61:10-11.
39.
Munnell, A.H., L.E. Browne, J. McEaney, and G.M.B. Tootell.1992. Mortgage lending in Boston: Interpreting HMDA data. Working paper no. 92-7, October. Boston Massachusetts : Federal Reserve Bank of Boston.
40.
Nixon, B.1993. The new regulatory cops on the block. Savings and Community Banker2(3):30-34.
41.
Parzen, J.A., and M.H. Kieschnick .1992. Credit Where It's Due Development Banking for Communities. Philadelphia, Pennsylvania: Temple University Press.
42.
Parzinger, T.M.1992. The long-term impact of FIRREA on real estate finance . Real Estate Review22:55-59.
43.
Smith, B.1993. The shape of things to come. Savings and Community Banker2(6):43-45.
44.
Stahl, D.1993. Consumer groups battle industry. Savings and Community Banker2(10):10.
45.
Stamper, M., and A. Stowers.1994. Breaking through the barriers. Mortgage Banking54:55-60.
46.
Stegman, M.1991. The excessive costs of creative finance: Growing inefficiencies in the production of low-income housing. Housing Policy Debate2:357-373.
47.
Squires, G. D., ed. 1992. From Redlining to Reinvestment Community Responses to Urban DisinvestmentPhiladelphia, Pennsylvania: Temple University Press .
48.
Syron, R.F.1993. The meaning of CRA. Savings and Community Banker2(9):6-7.
49.
Thornton, G.1993. Regulatory Burden. The Cost to Community Banks Prepared for the Independent Bankers Association of America, Alexandria, Virginia.
50.
United States Congress. House of Representatives. Subcommittee on Financial Institutions Supervision, Regulation, and Insurance, of the Committee on Banking, Finance and Urban Affairs. 1989. Financial Institutions Reform, Recovery and Enforcement Act of 1989 (H R. 1278) S. N. 101-112, March 16, 21, 22.
51.
United States Congress. House of Representatives. Subcommittee on Housing and Community Development, Committee on Banking, Finance and Urban Affairs. 1991. Government-sponsored Housing Enterprises Financial Safety and Soundness Act of 1991. S. N. 102-160, July 18, 19.
52.
United States Congress. House of Representatives. Subcommittee on Housing and Community Development, Committee on Banking, Finance and Urban Affairs. 1992a. Multifamily Housing Finance and Production S. N. 102-138, July 23.
53.
United States Congress. House of Representatives. 1992b. Housing and Community DevelopmentAct of 1992. Report 102-1017, October 5.
54.
United States Congress. House of Representatives. Subcommittee on Housing and Community Development, Committee on Banking, Finance and Urban Affairs. 1992c. The Federal Home Loan Bank System. S.N. 102-129, June 9, 10, 11.
55.
United States Congress. House of Representatives. Subcommittee on Housing and Community Development, Committee on Banking, Finance and Urban Affairs. 1993a. The State of Our Natton's Housing S.N. 103-139, May 20.
56.
United States Congress. House of Representatives. Subcommittee on Consumer Credit and Insurance, Committee on Banking, Finance and Urban Affairs. 1993b. Existing Efforts to End the Crisis: A Report Card S.N. 103-107, February 18.
57.
United States Congress. House of Representatives. Subcommittee on Financial Institutions Supervision, Regulation and Deposit Insurance, Committee on Banking, Finance and Urban Affairs. 1993c. H.R. 962, The Economic Growth and Financial Institutions Regulatory Paperwork Reduction Act of 1993. S.N. 103-166, September 15.
58.
United States Congress. House of Representatives. Subcommittee on General Oversight, Investigations, and the Resolution of Failed Financial Institutions, Committee on Banking, Finance and Urban Affairs. 1993d. Community Development Proposals and CRA Reforms S.N. 103-165, September 15.
59.
United States Congress. Senate. Subcommittee on Housing and Urban Affairs, Committee on Banking, Housing, and Urban Affairs. 1991. Multifamily Housing Finance S. Hrg. 102-442, October 29.
60.
Varady, D.P., and B.J. Lipman.1993. What are renters really like? Results from a national survey. Paper presented at the 35th Annual Meeting, Association of Collegiate Schools of Planning, Philadelphia, 29 October.
61.
Wilson, M.L.1992. Institutions report high activity in affordable housing . Savings Institutions113(1):14-15.
62.
Zandi, M.1993. Boston Fed's bias study was deeply flawed. American BankerAugust 19:12.
