Many activities provide good investments and services to low-income and minority communities. Examples from banks and other financial institutions demonstrate a commitment to serve their communities with safety and soundness. These include:

Loan Products

• Alternatives to Payday loans
• Auto Loans
• Mortgage Loans with flexible underwriting or low interest rates or fees
• FHA/VA Loans

Services

• Branch locations in low-income or high minority areas.
• Extended hours

Investment

• Grants to community groups. 

CRA Agreements

Some of these good practices come from CRA agreements. CRA agreements are one example of collaboration between banks and community groups that pledges investment in low-income and minority communities. CRA agreements include specific actions related to loans, investments, and bank services.  It could include specific loan targets, a change in loan terms and conditions, grants to community organizations, branch openings, bank staff trainings, community outreach, or any other commitment to invest in a low- income or minority community.

Some examples of CRA commitments include:

• Washington Mutual signed a $120 billion CRA agreement with the California Reinvestment Committee (CRC), the Greenlining Institute, the Washington Reinvestment Alliance, and other community groups. More than $80 billion of the ten-year commitment will be for single family lending to minorities and borrowers in low- and moderate-income census tracts. Low- and moderate-income borrowers will receive $30 billion in loans.

• Starting in 2005, Bank of America has committed $750 billion over a span of 10-years to affordable housing, community development, and small business lending.

• In 2003, MidAmerica Bank made a $3 billion commitment that target’s single- and multi-family residential lending to families whose incomes are 80% or less of the median income. Their commitment also includes establishing 2 additional branches in low- to moderate-income areas.

• In a $4.1 billion agreement with the Chicago CRA coalition, First Chicago NBD agreed to make 5,190 small business loans in low- and moderate-income neighborhoods over a six-year time period from 1998 through 2004. Than bank promised to make affordable lines of credit for working capital and will market a small business credit card to low- and moderate-income communities.

• Union National Bank, in a 1990 agreement with the Pittsburgh Community Reinvestment Group, committed to provide nearly $92 million in loans to small business in specific target areas over eight years.

• In 2006, Regions and AmSouth banks agreed to provide $10 billion to community lending and development projects.

• Between November 2003 and December 2005, JP Morgan Chase will open 12 new branches in low- and moderate-income census tracts in the Chicago area.

Information from CRA Commitments, September 2007,
National Community Reinvestment Coalition (NCRC)