The Federal Reserve Bank of Chicago has published a study that seems to raise questions about the impact of regulations on loans to minority and low-income communities.

Two economists came up with a seemingly modest number of mortgage loans that could be attributed to enforcement of the Community Reinvestment Act and fair-lending policies.

But their conclusion - that regulations spurred about 100 new mortgages and $8 million per metropolitan statistical area in the peak year of 1993 to 1994 - has sparked contrary interpretations.

Writing in the November/December issue of the Federal Reserve Bank's Economic Perspectives, the economists said the growth in the number of loans was "not unprecedented."

Their overall thrust was that it was difficult to attribute CRA-type loan growth in the 1990s "solely to the strengthening of the regulations."

Douglas D. Evanoff, senior financial economist at the Chicago Fed and co-author of the article with Lewis M. Segal, said he has received phone calls from both proponents and detractors of the CRA and fair-lending regulations, each convinced that the article supported their respective contentions.

"I do not think either one of those (interpretations) is correct," Mr. Evanoff said. "You have to shrug your shoulders."

From 1990 to 1995, the annual number of mortgage loans to low- and moderate-income households and census tracts and to minorities almost doubled, the article said. But those results appear less definitive in terms of dollars.

The peak period of 1993 to 1994 saw a 31% increase in those categories of mortgages, the article said. The increases to these borrowers that year amounted to about 35,000 loans and $2.7 billion, which averages out to about 100 loans and $8 million per metropolitan area.

While there was some evidence that regulations had made an impact, the article said, other data indicated that the disparities between minorities' and nonminorities' denial rates have been getting smaller through the 1990s, for both depository and nondepository institutions. The latter are not affected by the same regulations.

Mr. Evanoff and Mr. Segal noted that their findings contrast with a spate of glowing reviews of the regulations by community advocates and even some bankers.

But not everyone agrees that the article raises doubts about the regulations.

It is easy to read the Chicago Fed study as saying CRA and fair-lending have been ineffective, said Dan W. Immergluck, vice president of the Woodstock Institute, a Chicago-based research group that specializes in community and economic development issues.

"I got the exact opposite impression," he said.

The averages per metropolitan statistical area may not seem large in the context of Chicago or New York, he said, but most of the 350 MSAs are much smaller. "Eight million dollars a year in Lima, Ohio, might be a pretty big impact," he added.

"The averages don't tell the whole story," said American Bankers Association chief economist James H. Chessen. "It's very significant in the vast majority of MSAs."

Loans to lower-income and minority groups increased because of a variety of factors, including the strength of the economy and the banking industry in most of the 1990s, as well as regulations, Mr. Chessen said.

He declined to say whether the Chicago economists' article put bankers in a good or bad light or could be seen as an indictment of regulation. "The important thing is that good, creditworthy borrowers are getting access to credit."

A complete assessment of the regulatory impact requires a difficult if not impossible cost-benefit analysis, Mr. Evanoff said. "I don't think we have the numbers to do it," he said.

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