In a major 1993 domestic policy speech on the South Lawn of the White House, a considerable portion of Clinton’s statements challenged federal bank regulators to “breathe new life” and “new purpose” into the CRA. In a memo to President Clinton, the OCC outlined the more controversial features of proposed revisions to the CRA. The Clinton Administration strengthened the CRA by focusing the financial regulators attention on a financial institutions’ community investment performance (CRA final revisions). For the first time, revisions allowed for the securitization of CRA asset-backed securities—a $384.6 million offering issued by First Union Capital Markets and Bear Stearns.
Coined “regulation from below”, community groups came to realize the value of public scrutiny and the use of the public comment process to protest bank merger applications on CRA grounds. A primary goal was to extract increased lending commitments for banks, not simply to block the mergers or acquisitions. CRA community reinvestment became a newsworthy subject as community groups reached over four hundred unilateral CRA agreements with an estimated value of more than 4.2 trillion dollars.
As part of their investigation into the causes of the subprime crisis, the FCIC requested information from Bank of America, J.P. Morgan, Citigroup regarding their “CRA and lending commitments.”
“Citigroup’s pledge of $80 billion in mortgages lending “consisted of entirely prime loans” to low-and-moderate income households, and low-and-moderate income neighborhoods, and minority borrowers. These loans performed well.” JP Morgan’s largest commitment to a community group was to the Chicago CRA Coalition: $12 billion in loans over 11 years. Of loans between 2004 and 2006, fewer than 5 percent have been 90-or-more-days delinquent, even as of late 2010. Wachovia made $12 billion in mortgage loans between 2004 and 2006 under its $100 billion unilateral pledge: only about 7.3 percent were ever more than 90 days delinquent over the life of the loan, compared to an estimated national average of 14 percent.