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- The Community Reinvestment Act (CRA) is a seminal piece of legislation enacted to address systemic inequities in access to credit as part of a reinforcing set of laws to expand financial inclusion and combat redlining.
www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200921a1.pdf
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The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and ...
- What Is The Community Reinvestment Act (CRA)?
- Understanding The Community Reinvestment Act
- CRA Performance Ranking
- Criticisms of The CRA
- Modernizing The CRA
- The Bottom Line
The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of the communities where they are chartered, including low- and moderate-income neighborhoods. The CRA requires federal banking agencies to assess how well each institution fulfills its obligations to these communities...
Before the Community Reinvestment Act (and other fair housing laws), U.S. banks systematically denied mortgages to Black Americans and other people of color who lived in certain areas "redlined" by a federal government agency called the Home Owners' Loan Corporation (HOLC).The HOLC created maps that classified neighborhoods across the country on a ...
The Federal Reserve uses one of five methods to rank a bank’s performance based on its size and mission. Though a 1995 update to the CRA requires regulators to consider lending and investment data, the evaluation process is somewhat subjective, with no specific quotas that banks have to satisfy.Still, each bank is given one of the following ratings...
Critics of the CRA, including some conservative politicians and pundits, allege the law contributed to the risky lending practices that led to the financial crisis of 2008. They contend that banks and other lenders relaxed certain standards for mortgage approvals to satisfy CRA examiners. However, some economists, including Neil Bhutta and Daniel R...
More recently, some economists and policymakers have suggested the law needs to be revised to keep up with changes in the industry and make the evaluation process less onerous for banks. For example, the physical location of bank branches remains a component in the scoring process, even though an increasing number of consumers are conducting their ...
The CRA ensures that federally insured banks address the credit needs of their entire community, particularly low- and moderate-income neighborhoods. Established to combat redlining, the CRA has evolved with the banking industry, especially with the rise of online banking. While some have criticized the CRA for its role in the 2008 financial crisis...
- Will Kenton
The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
May 8, 2023 · The 1977 Community Reinvestment Act (CRA) is a seminal piece of legislation intended to address inequities in access to credit. Discrimination in real estate and lending, including race-based redlining, had become illegal at the federal level under the 1968 Fair Housing Act.
Sep 16, 2010 · Community Reinvestment Act. By Timothy Edmonds. SN/BT/400. Household Debt: Key Economic Indicators. Household debt: Data on the latest household debt statistics, including net lending, mortgage interest rates and insolvencies.
- Christopher Blair, Tim Edmonds
- 2010
Oct 26, 2023 · The Community Reinvestment Act is passed to encourage the sound provision of lending, financial services, and other investments in low- and moderate-income neighborhoods. Community advocates, policymakers, and economists argued that people in low- and moderate-income neighborhoods still struggled to access credit despite the fair lending laws.
to the work of community organizers, the Community Reinvestment Act was passed in 1977 to spur lending and investing in the Black com-munity, other communities of color, and lower-income neighborhoods—to go beyond anti-discrimination legislation and mandate banks afirmatively serve a more fundamental public purpose to bring lending and investmen...
