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CREDIT EXPANSION 

from taking such actions. “The federal regulators’ refusal to reform [predatory] prac-
tices and products served as an implicit endorsement of their legality,” Illinois Attor-
ney General Lisa Madigan testified to the Commission. 

COMMUNITYLENDING PLEDGES:
“WHAT WE DO IS REAFFIRM OUR INTENTION”
While consumer groups unsuccessfully lobbied the Fed for more protection against
predatory lenders, they also lobbied the banks to invest in and loan to low- and mod-
erate-income communities. The resulting promises were sometimes called “CRA
commitments” or “community development” commitments. These pledges were not
required under law, including the Community Reinvestment Act of ; in fact,
they were often outside the scope of the CRA. For example, they frequently involved
lending to individuals whose incomes exceeded those covered by the CRA, lending
in geographic areas not covered by the CRA, or lending to minorities, on which the
CRA is silent. The banks would either sign agreements with community groups or
else unilaterally pledge to lend to and invest in specific communities or populations.
Banks often made these commitments when courting public opinion during the
merger mania at the turn of the st century. One of the most notable promises was
made by Citigroup soon after its merger with Travelers in : a  billion lending
and investment commitment, some of which would include mortgages. Later, Citi-
group made a  billion commitment when it acquired California Federal Bank in
. When merging with FleetBoston Financial Corporation in , Bank of Amer-
ica announced its largest commitment to date:  billion over  years. Chase an-
nounced commitments of . billion and  billion, respectively, in its mergers
with Chemical Bank and Bank One. The National Community Reinvestment Coali-
tion, an advocacy group, eventually tallied more than . trillion in commitments
from  to ; mortgage lending made up a significant portion of them. 
Although banks touted these commitments in press releases, the NCRC says it

and other community groups could not verify this lending happened. The FCIC
sent a series of requests to Bank of America, JP Morgan, Citigroup, and Wells Fargo,
the nation’s four largest banks, regarding their “CRA and community lending com-
mitments.” In response, the banks indicated they had fulfilled most promises. Ac-
cording to the documents provided, the value of commitments to community groups
was much smaller than the larger unilateral pledges by the banks. Further, the
pledges generally covered broader categories than did the CRA, including mortgages
to minority borrowers and to borrowers with up-to-median income. For example,
only  of the mortgages made under JP Morgan’s  billion “community devel-
opment initiative” would have fallen under the CRA. Bank of America, which

would count all low- and moderate-income and minority lending as satisfying its
pledges, stated that just over half were likely to meet CRA requirements.
Many of these loans were not very risky. This is not surprising, because such broad
definitions necessarily included loans to borrowers with strong credit histories—low