Community Reinvestment Act

The Community Reinvestment Act was passed in 1977 (and revised later in 1995 and 2005) to encourage banks to participate in the “redevelopment” of low and moderate income areas of the community.

Note the “re”s in here. The community was developed once. It forgot that it ran under the financial auspices of business. It made stupid decisions. And it went bankrupt. Then, instead of it being developed…like Detroit was first developed under the auspices of Hank Ford in the ‘30s and ‘40s and beyond...it had to be redeveloped after it failed.

Investment was needed initially. The people who promised to pay back the money they borrowed…didn’t. And now, needing more investment, they need reinvestment. This Act requires all kinds of bank disclosure in their lending choices and practices, with records fully available for public inspection…the implication being that there was a whole lot of corruption in the process involved in the failure of the given community.

The presumption is that, if records are made public, at least the criminals will be able to be identified after they’ve absconded with the dough.