taking a holistic view of closely related issues is likely to be the best way to fulfill the purpose of the cra, as one of several important laws intended to promote fair financial access. affordable housing and the cra i want to briefly connect the dots between the high priority we put on strengthening the cra and the pressing challenge of affordable housing that is a key focus of the work that you all do. access to affordable housing connects families concretely to place and can be a source of strength or fragility. pew just released a study showing that 38 percent of renter households in america are spending more than 30 percent of their pretax income on rent, representing a 19 percent increase from 2001. 16 the percent of renter households that are spending half or more of their pretax income on housing increased by 42 percent during the same period. households that spend a high fraction of their income on rent often may find themselves unable to pursue proven strategies to achieve financial security and invest in their family ’ s richard rothstein, the color of law : the forgotten history of how our government segregated america ( new york : w. w. norton & company, 2017 ). see http : / / www. pewtrusts. org / en / research - and - analysis / reports / 2018 / 04 / american - families - face - a - growing - rentburden. future. they may need to turn to costly short - term sources of credit to cover emergency expenses. some may experience eviction if there is an unexpected expense or loss of income. to manage the high cost of housing, workers may be compelled to live far from where they work, rent substandard units, or resort to overcrowding. research shows that households that live far from work often pay a large share of their budget in commuting costs. 17 as a society, we need to do better in ensuring that affordable housing is available where it is needed. the supply of affordable housing is a good example of a problem of national scope whose solution must be tailored to local needs and economic conditions. this audience knows better than most about the complex dynamics that affect housing at the local level. local decisions on land use, zoning, taxes, and leveraging of federal funding, and whether community needs are prioritized, are at the heart of whether neighborhoods thrive. i ’ m not going to suggest that there are any easy answers to housing affordability. still, the cra is one of the important policy

. canner, “ mortgage market conditions and borrower outcomes : evidence from the 2012 hmda data and matched hmda - credit record data, ” federal reserve bulletin 99 ( november 2013 ). in addition, a study of mortgage loans originated between 2003 and 2006 as part of a cra targeted, low - to moderate - income homebuyer program found that they performed nearly as well as community ’ s needs and priorities in the hands of local stakeholders : financial institutions that lend and invest, community organizations that deliver services and develop real estate, and state and local governments that direct incentives and subsidies. the enactment of other laws around the same time supported the cra ’ s success, including the home mortgage disclosure act, which requires lenders to report the location of their home mortgage lending and the race and income of borrowers. much has changed in the years since the cra was enacted, including technology - driven changes in the delivery of financial services, and it is high time to consider corresponding improvements to the regulations. both banks and community organizations have offered a variety of suggestions for improving the cra regulations and their implementation in the last several years. we are undertaking discussions with the office of the comptroller of the currency and the federal deposit insurance corporation, with which we have traditionally issued joint rulemakings on the cra. the federal reserve has long been interested in engaging in an interagency review of the cra regulations, so we are pleased to participate in this process. in addition, the treasury department recently completed an extensive outreach effort related to modernizing the cra regulations. cra is a vital tool to address the credit needs of low - and moderate - income communities, and i believe the time is ripe for a refresh to make it even more relevant to today ’ s challenges. there are five principles that can help guide our efforts. prime loans and much better than subprime mortgage loans through the financial crisis ; see lei ding, roberto g. quercia, janneke ratcliffe, and wei lei, “ risky borrowers or risky mortgages : disaggregating effects using propensity score models, ” journal of real estate research 33 no. 2 ( 2011 ) : 245 – 77. another analysis found evidence of a substantial increase in mortgage lending due to the cra - - especially among low - income borrowers - with no measurable rise in the likelihood of default ; see daniel ringo, “ mortgage lending, default, and the community rein