A tightening of conditions in the financial markets and credit supply, triggered by investors’ flight to safety and by an exacerbation of strains on bank securities, coupled with a general decline in business confidence, would harm investment and growth.
In response to these criticisms, President Clinton in 1993 directed the agencies that implement CRA to review and revise the regulations, with the goals of clarifying performance standards, making examinations and evaluations more consistent, and reducing the compliance burden. The CRA regulations adopted in 1995 established for large institutions a three-pronged test based on performance in the areas of lending, investments, and services.