and commensurately provides them favorable cra consideration for those activities. by requiring regulators to make cra performance ratings and evaluations public and to consider those ratings when reviewing applications for mergers, acquisitions, and branches, the congress created an unusual set of incentives to promote interaction between lenders and community organizations. given the incentives of the cra, bankers have pursued lines of business that had not been previously tapped by forming partnerships with community organizations and other stakeholders to identify and help meet the credit needs of underserved communities. this experimentation in lending, often combined with financial education and counseling and consideration of nontraditional measures of creditworthiness, expanded the markets for safe lending in underserved communities and demonstrated its viability ; as a result, these actions attracted competition from other financial services providers, many of whom were not covered by the cra. there are many fine examples of community development lending and investment activities designed to address needs in the poorest of areas, including many of those highlighted by the case studies in this report. during trips to the regional federal reserve banks and branches, i have spent a lot of time visiting areas with high concentrations of poverty. for many years, the fed has promoted community banking services for the unbanked and underbanked population. it was gratifying for me to find that financial services were accessible in, for example, central cleveland, thanks to the efforts of one local bank that offers check - cashing services at much lower rates than competing nonbank check cashers. similarly, in the little haiti neighborhood in miami, another case - study community that i had the opportunity to visit last year, one banking institution has committed to serving the neighborhood's unbanked residents by hiring creolespeaking staff to promote a prosperity campaign built around the earned income tax credit. i am sure that today's luncheon speaker, tom barrett, mayor of milwaukee, could share similar observations about a local financial institution serving that case - study neighborhood by providing low - income residents complimentary electronic income tax filing combined with financial education seminars, innovative credit repair programs, and low - cost banking services. these services benefit lower - income customers by providing a simple means of accessing earned income and homestead tax credits and the services necessary to maximize the benefits of these programs. in addition to providing financial services to lower - income people, banks also provide critical community development loans and investments to address affordable housing and economic development needs. these activities are particularly effective because they leverage the resources

lp data based on the zip code location of the properties securing the loans. second, delinquency rates for each relative income group ( lower, middle, and higher ) were calculated as the weighted sum of delinquencies divided by the weighted sum of mortgages, where the weights equal each zip code's share of the population in census tracts of the particular relative income group. relative income is based on the 2000 decennial census and is calculated as the median family income of the census tract divided by the median family income of its metropolitan statistical area or nonmetropolitan portion of the state. both approaches yield virtually identical results. the analysis focused on loans originated from january 2006 through april 2008 with performance measured as of august 2008. however, a virtually identical relationship in loan performance across neighborhood income groups is found if the pool of loans evaluated is expanded to cover those originated in 2004 or 2005. the only material difference is that the levels of delinquency are lower for the loans covering longer periods. loans that are 90 days or more delinquent include those that end in foreclosure or as real estate further doubt on the view that the cra could have contributed in any meaningful way to the current subprime crisis. unfortunately, the available data on loan performance do not let us distinguish which specific loans in lower - income areas were related to the cra. as noted earlier, institutions not covered by the cra extended many loans to borrowers in lower - income areas. also, some lower - income lending by institutions subject to the law was outside their local communities and unlikely to have been motivated by the cra. to learn more about the relative performance of cra - related lending, we conducted moredetailed analyses to try to focus on performance differences that might truly arise as a consequence of the rule as opposed to other factors. attempting to adjust for other relevant factors is challenging but worthwhile to try to assess the performance of cra - related lending. in one such analysis, we compared loan delinquency rates in neighborhoods that are right above and right below the cra neighborhood income eligibility threshold. in other words, we compared loan performance by borrowers in two groups of neighborhoods that should not be very different except for the fact that the lending in one group received special attention under the cra. when we conducted this analysis, we found essentially no difference in the performance of subprime loans in zip codes that were just below or just above the income