Reinvestment and the federal Community Reinvestment Act are good for the residents of our cities and for businesses operating in cities, including lenders. It is true that some of my colleagues have been brought to the table kicking and screaming, and still others have not yet decided to participate. Yet a growing and significant number of lenders today see both the future of their cities and the self interest of their institutions as inseparable from increased community reinvestment.

This book offers several chapters in what is a most important story. While there are important distinctions in the precise manner with...

A community reinvestment social movement has emerged in urban America in recent years. After watching their neighborhoods deteriorate from the gradual but persistent loss of public services and private goods, angry residents in cities throughout the United States have joined together in community organizations to fight back. Often with the assistance of local public officials, sympathetic academies, reporters, and other community activists, successful campaigns have been launched by a variety of individuals to save their neighborhoods. The problem, in a word, is redlining. The solution is reinvestment.

While there is no explicit starting point for this social movement, it has...

“Inequities are cited in hub mortgages; Preliminary Fed finding is ‘racial bias.’”¹ On January 11, 1989, with this front page headline, theBoston Globetrumpeted the conclusions of an unpublished study by the prestigious Federal Reserve Bank of Boston. An accompanying diagram dramatized the finding that mortgage loans in the predominantly black neighborhoods of Roxbury and Mattapan would have been more than 100 percent greater “if race was not a factor.” The second paragraph of the story on the leaked report quoted its damning finding that “this racial bias is both statistically and economically significant.”

Almost exactly one year later,...

In 1988, the Pittsburgh Community Reinvestment Group (pcrg) negotiated a five-year, $109 million neighborhood lending agreement with Union National Bank of Pittsburgh, one of the largest agreements of its kind ever created with one bank, particularly in relation to the institution’s asset size.¹ The pcrg is a citywide Community Reinvestment Act (cra) coalition of nonprofit community-based organizations that represent homeowners, renters, small business owners, real estate developers and other property owners in Pittsburgh’s low- and moderate-income and African-American neighborhoods. With funding support from its member organizations, the City of Pittsburgh, and local financial institutions, pcrg has continued to negotiate and...

On april 3, 1987, after an awards ceremony in Detroit, reporters gathered in their traditional pack to buttonhole Coleman Young, the city’s outspoken mayor. Their topic was one recently discussed in a Detroit City Council session: Why was so much taxpayer money needed to develop downtown hotel space in the nation’s sixth largest city? Wasn’t private investment possible? Young angrily called the questions “asinine.” Yet, asDetroit Free Pressreporter Patricia Edmonds wrote, the mayor proceeded to answer them: “Why? Because people have been leaving Detroit by the droves. There’s been a white exodus out of this city … that...

The first written reinvestment agreement in the country was negotiated in Chicago between a community-based organization and a community bank. It is not surprising that the first written agreement was developed in Chicago or that this agreement was finalized in 1974, three years before the passage of the Community Reinvestment Act (cra).

Chicago is a neighborhood town with a long-standing history of community organizing. Chicago neighborhoods have been the battleground for organizing campaigns since Jane Addams first worked to better the lives of immigrants in the neighborhood just west of the Loop. Saul Alinsky cut his teeth in the neighborhoods...

Milwaukee’s response to redlining and disinvestment reflects the city’s three distinct personalities. Milwaukee has been characterized as a slow, conservative city; a well-run, congenial metropolis; and a seriously segregated community notwithstanding a strong progressive tradition (Norman 1989). As a conservative city, Milwaukee has been ten years behind the rest of the country in recognizing and responding to disinvestment problems. As a well-run city, Milwaukee has borrowed the best solutions from the rest of the country. A segregated yet in many respects progressive Milwaukee has seen race as the driving force in the formation, dissolution, and, hopefully, what now appears to...

In the city that cradled the civil rights movement enough time has passed for redlining to be replaced with reinvestment; but the record in Atlanta is mixed. Though some lenders continue to resist significant change in their basic business practices, important positive developments have occurred.

Atlanta banks and financial institutions resisted pressure from the Atlanta Community Reinvestment Alliance (acra) for two and one-half years, until the publication of a four-part front-page series in theAtlanta Journal/Constitutiondetailing the extent and persistence of racial discrimination in mortgage lending. Within two weeks, financial institutions that had earlier proposed and then withdrawn an...

The history of reinvestment advocacy and programmatic response in California derives from diverse antecedents rooted in the late 1970s.¹ These early efforts included separate but roughly parallel initiatives by public sector, advocacy, and industry groups. By the late 1980s a statewide coalition of advocacy, consultant, and technical assistance organizations, in conjunction with representatives of California local governments, had negotiated community lending commitments from large and small lenders statewide totaling more than $350 million. By 1990, the success of these community lending commitments negotiated by a statewide coalition, combined with a resurgent awareness among regulators, lenders and elected officials of the...

Over the last two decades a quiet revolution has taken place (Bradford 1989). The old anti-redlining movement has grown into a new community development movement. The uniting of the “people power” of community-based action groups, the technical skills of community-based developers, funding from government and foundation grants and programs, and the capital and credit resources of the private financial markets has created new experiments and models for housing and community economic development partnerships. A powerful coalition of community action groups, community-based housing and economic development groups, civil rights groups, legal assistance organizations, and technical assistance providers has emerged.

The seven...