Social Performance Measurement for CDFI Banks

How can one meaningfully assess the social performance of mission-oriented banks? If the industry is to raise more private capital in the long run, then standardized, credible measures are required to compare the performance of institutions. This paper pursues one possible avenue of evaluation, drawing on publicly available data sources, such as FDIC’s Statistics of Depository Institutions & Summary of Deposits databases, and the FFIEC’s HMDA and CRA databases. The paper reports on financial and social performance during 1996-2004 for the banks  accredited by the CDFI Fund. The paper proposes two measures, Development Lending Intensity (DLI) and Development Deposit Intensity (DDI), which systematize aspects of the lending and service tests performed on depository institutions as part of the CRA examination process.