That rule has now changed and a major effort is underway to spread the creation of IDAs for low-income households. The tens of billions of dollars in revenue generated from a financial transactions tax, if directed toward IDAs not only for low-income households but for all households, would move the concept from the margins of public policy to its center. Much of the testimony focused on its failures. In 1989 several useful reforms were introduced, including more public disclosure. The CRA enables home ownership by those who have traditionally been shunned by the mortgage financing institutions.
Home ownership has a profoundly beneficial impact on both community and individuals.
Home ownership is one of the most important stabilizing influences on local economies and neighborhoods. Banks were fearful that the CRA would force them to make bad loans. The evidence leads to the opposite conclusion. A survey of 600 lending institutions by the Federal Reserve Bank of Kansas City found that 98 percent found CRA lending to be profitable. Indeed, the nation's leading credit scoring company, Fair Isac and Company, studied the default performance of a spectrum of incomes and concluded that income is negatively correlated with loan repayment behavior.