financial commitments, particularly for activities that revitalize and stabilize targeted areas. our analysis suggests a community development finance metric along the lines outlined here will help to ensure greater predictability and consistency in achieving a satisfactory rating. however, we also want to make sure that these metrics are supplemented with clear, qualitative standards to ensure that small - scale, high - impact community development activities are rewarded, along with a bank ’ s responsiveness to local needs and priorities. community development test — evaluating services it is also important to evaluate services qualitatively at the assessment - area level as part of the overall community development test. volunteer and other services provided by banks can provide meaningful support to communities whose value is unlikely to be adequately captured on a comparable basis using aggregative dollar value metrics. in areas with a low density of financial services, a bank officer on the board of local community organizations could provide considerable value to the community that is not accurately reflected by monetizing volunteer hours based on their compensation. tailoring this approach to assessing cra performance would tailor performance metrics to bank size and business strategy, as well as to local and cyclical conditions. the approach would tailor to banks ’ business models by establishing separate thresholds for substantially different lending products, such as mortgage loans and small business, small farm, and consumer loans, as well as separate retail lending and community development financing metrics. - 13 - the proposed metrics would also be tailored for different bank sizes. this is facilitated in part by allowing very small banks to retain the current evaluation procedures and in part by creating a separate community development test that would apply only to large banks. tailoring is also an important consideration in data collection and reporting requirements. the proposed retail lending approach is designed so that it can be implemented in significant part with data that are readily available. in designing the community development approach, we have been mindful of burden as we consider any additional data that might be required to implement certain metrics. finally, as previously noted, the metrics are tailored for local conditions and cyclical considerations. the proposed threshold for each type of activity is calibrated to local conditions as they evolve over the cycle, and the community development finance metric uses an additional time - varying national rural or urban comparator. the path ahead staff across the federal reserve system have devoted substantial time and effort to engaging with the other banking agencies in the cra reform process. the analysis, data, and proposals i have discussed today

elizabeth a duke : prescriptions for housing recovery speech by ms elizabeth a duke, member of the board of governors of the federal reserve system, at the national association of realtors midyear legislative meetings and trade expo, washington dc, 15 may 2012. * * * good morning. the title of this session is “ prescriptions for housing recovery. ” i wish i had such a prescription. problems related to mortgage debt and mortgage underwriting played a central role in the recent financial crisis and resulted in a massive dislocation in the housing market. it is difficult to think of a single prescription that by itself will generate a sustainable recovery in housing. at the same time, i do see policies that i believe will help reduce the shadow inventory of houses in the foreclosure pipeline. i also see policy actions that could be taken to improve credit availability for potential homebuyers and, in turn, demand for houses. i have talked at length in previous speeches about actions that i believe would help alleviate the effects of excess foreclosure inventory on the housing market. 1 in my remarks today i will mention those possible actions only briefly and then focus primarily on policy issues that i expect will shape the availability of credit for home purchases in the future. before i begin my remarks, i want to emphasize that the views that i will present today are my own and not necessarily those of my colleagues on the federal open market committee ( fomc ) or the board of governors. state of housing markets let me start with a review of the fallout from the boom and subsequent bust in housing. it was only six years ago that the housing market was booming : the homeownership rate stood at 69 percent, and aggregate housing wealth reached nearly $ 23 trillion. since then, however, the housing market has struggled, to say the least : the homeownership rate has declined to 66 percent, and national house prices have fallen about one - third, while house prices in hard - hit areas, such as las vegas, have fallen almost twice that amount. as a result, nearly $ 7 trillion in housing wealth has been lost. housing supply house prices have been weighed down by the large proportion of distressed sales – that is, sales resulting from foreclosures or short sales – and the specter of the large shadow inventory currently in the foreclosure pipeline. high levels of unemployment, weak income growth, and negative equity have contributed to a staggering 2. 2 million loans in the fore