Thanks to the CRA, community groups have negotiated agreements with banks, including many of the largest in the country, to provide loans and services to low-income communities. Many of the negotiations have been adversarial. Complaining that the CRA imposes undo compliance costs on banks and that business generated by these agreements is unprofitable, the banking industry continues to fight for CRA's elimination, or at least its evisceration.
Many individual banks approach negotiations as if they have much to lose and little to gain.
But not all banks share these views. Some have negotiated large agreements and found that loans in communities they previously shunned were profitable and had a significantly lower default rate than loans made in affluent communities. Jerome Greco, Senior Vice President of First Fidelity , whose recent merger with First Union makes the bank one of the largest in the country, began negotiating agreements with Citizen Action eight years ago. These commitments have helped neighborhoods around the state, while providing solid returns for First Fidelity. We hope the lessons from 20 years of CRA battles and agreements will soon filter throughout the banking industry and into the halls of Congress.