APPLIED E BUSINESS Essay Example | Topics and Well Written Essays - 1750 words - 1

APPLIED E BUSINESS - Essay Example ing and Mortgage disclosure Act), according to this new law, it became obligatory for the lenders to disclose their lending procedure to the common public (Squires 7). The year after the passage of HMDA experienced the acceptance of CRA (Community reinvestment Act) because analysis showed that the amount being invested in meager areas was quite low (Ross 44). The Act made it obligatory for the banking institution to provide loans to all the people available in the market; provide the facility of depositing money to limited areas and develop reports regarding the habit of lending and submit the report to the federal body. These reports aided in evaluation of the applicants when these applicants made request for conducting takeovers and amalgamations. The practices made by the Act were not implied on the credit unions as these unions were not as large as the banks of that era. According to the definition of credit unions, these unions are allowed to restrict the amount of money they le nd to people sharing similar characteristics such as work and educational institute. The outcome of the CRA act was that there was a sudden increase in the amount borrowed by people living in areas that consist of low to middle income earners. The research conducted by San Francisco Fed showed that the amount of money borrowed by low income earners for the purpose of purchasing homes elevated by 37% during the period of 1993 to 1997 and during the same period, the amount borrowed by middle income earners elevated by 32% (Laderman 2). During the same era, the number of buying and selling offers of home made by lower middle income earners increased by 43% and for low income earners it increased by 43% (Laderman 2). This era even witnessed an increase in the borrowing conducted by high income earners by 17% and middle income earners by 23% (Laderman 2). Those in the favor of the act believed that these achievements were caused due to the act, while during the same period increase in