Compared to larger banks, community banks •  have notably larger shares of home purchase loans than loans for other purposes, such as refinancing or home improvement  •  tend to originate proportionately more conventional loans than loans backed by government guarantees  •  extend larger shares of their total home-purchase loans to low- or moderate-income individuals or borrowers in low- or moderate-income neighborhoods, lending that is the focus of the Community Reinvestment Act requirements to help serve the credit needs of local communities  •  hold the loans they originate in portfolio and retain the credit risk, rather than transfer the risk by selling those loans to other market participants, such as Fannie Mae, Freddie Mac, or others13  The HMDA data also indicate that a larger share of the conventional loans extended by smaller lenders carry higher prices.14 The data do not provide much insight into why the pricing patterns differ across lender size groups, but it may be that the types of loans  10  Estimates are based on the number of first-lien mortgage originations related to one- to four-family dwellings as reported under HMDA.
For this reason, even once the outlook becomes less dependent on net asset purchases, monetary policy still needs to be patient, persistent and prudent to guarantee the return of inflation to our aim. Developments in the real economy The economy has been growing consistently above current estimates of potential growth, by more than a percentage point last year.