ABSTRACT: As the mortgage crisis took shape by 2007, the Community Reinvestment Act of 1977 emerged at the center of a debate over whether community reinvestment regulations were perverse incentives promoting high-risk lending, or whether those regulations had become outmoded in the face of concentrated subprime lending. This paper weighs those arguments by examining the market behavior of lenders subjected to Community Reinvestment Act (CRA) as the subprime lending boom took shape after 2004. Using Detroit as an illustrative case, it empirically examines the market structure of high-cost lending, as well as the role played by CRA-covered lenders in the critical market segments most prone to concentrated subprime lending. The results suggest that several “blind spots” in CRA regulations weakened the Act's ability to counter the firm- and neighborhood-level segmentation that characterized the growth of concentrated subprime lending in Detroit during the peak years of the housing boom.