This paper studies the role of the Community Reinvestment Act (CRA) in the US housing boom-bust cycle. I nd that the enhancement in CRA enforcement
in 1998 increased the growth rate of mortgage lending by CRA-regulated banks to CRA-eligible census tracts. I show that during the boom period house price
growth was higher in the eligible census tracts because of the shift in mortgage supply of regulated banks. Consequently, these census tracts experienced a worse
housing bust. I nd that CRA-induced mortgages went to borrowers with lower FICO scores and encountered more frequent delinquencies.
