Federal Reserve Governor John LaWare said bankers should regard the Community Reinvestment Act as a fixture in U.S. banking and one that is good for business.
"Making loans back into the community from which bankers draw deposits is a natural phenomenon and good business," Mr. LaWare said in a speech prepared for a community investment workshop Friday in Bloomington, Minn.
'Here to Stay'
Reinvestment-act rules require banks to make credit available in their home communities. Since last year, banks' ratings in regulators' examinations under the act have been made public, giving some activist groups leverage to push for more lending in low-income areas.
"CRA is here to stay, and so is public disclosure of CRA ratings," Mr. LaWare said. Fears that the ratings would be confused with banks' safety and soundness were unfounded, he added.
Mr. LaWare said banks' contributions to their home communities should go beyond charitable gifts. "Credit, broadly defined, is a key ingredient in making a viable economy for any community," he said.
