Private Bank Public Values and Priorities Under the Community Reinvestment Act

• Published date: 01 October 2023
• DOI: http://doi.org/10.1177/00953997231185841
• Author: Alexis R. Kennedy
• Date: 01 October 2023
• Subject Matter: Articles

https://doi.org/10.1177/00953997231185841

Administration & Society

2023, Vol. 55(9) 1710 –1737

© The Author(s) 2023

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DOI: 10.1177/00953997231185841

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Article

Private Bank Public

Values and Priorities

Under the Community

Reinvestment Act

Alexis R. Kennedy1

Abstract

The Community Reinvestment Act (CRA) requires banks to grant low-

income communities access to credit. Federal agencies monitor CRA activity

and rate banks on compliance. As an economic development tool, the CRA

supports private investment of public outcomes. This paper uses qualitative

content analysis to examine bank and nonprofit comments regarding

proposed CRA rule changes and bank shareholder reports through the

lens of the realized publicness framework, to explore how banks express

public values. This study finds that banks espouse public values, but that the

context of those values is not aligned with community nonprofit values.

Keywords

realized publicness, Community Reinvestment Act, public values, corporate

social responsibility

The recent resurgence of social and political movements including Black

Lives Matter and anti-gentrification campaigns within American cities has

refocused decision makers to direct their efforts on promoting and passing

social safety net and social equity policies. Examples include childcare tax

1Colorado State University, Fort Collins, USA

Corresponding Author:

Alexis R. Kennedy, Department of Political Science, Colorado State University, Fort Collins,

CO 80523-1019, USA.

Email: alexis.kennedy@colostate.edu

1185841AAS0010.1177/00953997231185841Administration & SocietyKennedy

research-article2023

Kennedy 1711

credits and infrastructure bills that promote spatial and environmental jus-

tice (Johnson et al., 2020; Kozlarz, 2020; McCulley, 2021; The White House,

2021). The private sector has long been a player in these efforts as private

organizations are the ones that are building roads and houses, giving people

jobs, and providing childcare. In the United States, public and private part-

nerships and collaborations have been the way in which many public ser-

vices are done (Kettl, 2015). While touted as efficient, with these

arrangements also come questions related to public values, accountability,

transparency, and effectiveness, all topics that have been explored in public

administration research and theory (see, e.g., Forrer et al., 2010; Hodge &

Greve, 2007; Kettl, 2015; Reynaers, 2014).

One way in which scholars have examined the interactions between pub-

lic and private organizations is through the concept of realized publicness, or

the ways in which organizations adopt public values and turn them into pub-

lic outcomes (Bozeman, 1987; Merritt, 2019; Moulton, 2009; Varkey, 2022).

This framework is useful in exploring some of the consequences of public

and private relationships as it has the potential to give public administrators

and policymakers the tools to manage private organizations in support of

public service. While the literature focused on this topic asserts that private

organizations can and do adopt public values (see, e.g., Moulton & Feeney,

2011; Reid, 2012)), less is known about how the public values adopted by

private organizations align with or differ from other stakeholder groups with

which they interact. For example, if private banks adopt public values

through their interactions with the community, nonprofit organizations, and

the public sector, in what ways do those values support these stakeholders’

goals and outcomes?

This article is the first to use the realized publicness framework to explore

this topic. This research compares public values and how they are publicly

discussed by banks and nonprofits in support of accessible credit markets

under the Community Reinvestment Act (CRA). How public values are

espoused by CRA stakeholders is important because public comments are

used by rulemakers to create policy that will ultimately determine the future

ways in which banks interact with and serve communities. Furthermore, as

private entities with customers, banks may also express their public values in

different ways depending on their intended audiences. Therefore, to better

uncover how banks are discussing their public values, this paper also exam-

ines shareholder reports and extracts private and public value descriptors

from these documents. This paper examines these tensions and explores the

public values regulated entities (banks) espouse in public-facing communica-

tion (public comments and shareholder reports). How do they compare to the

values espoused by community groups?