Community Reinvestment Act


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Community Reinvestment Act (CRA)

Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations.

Community Reinvestment Act

A 1977 U.S. law encouraging banks and other lending agencies to extend credit to low and moderate income persons wishing to buy a home. The original contained no penalties, but prohibited lending institutions from discriminating against a potential homeowner based on where he/she lives. Regulatory changes in 1995 and legislative amendment in 1999 are often blamed for encouraging banks to make excessively risky loans in exchange for the ability to offer investment and insurance services. Because of this, some believe the CRA is responsible for the housing bubble that contributed to the recession that began in 2008. See also: Credit Crunch, Gramm-Leach-Bliley Act

Community Reinvestment Act (CRA)

An act passed by Congress in 1977 to encourage financial institutions to meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. Compliance is monitored via regular audits,and a poor record of CRA compliance is taken into consideration when the financial institution applies for deposit facilities,including mergers and acquisitions.

One may find a financial institution's rating for CRA compliance by visiting the Web sites of the various regulatory agencies that track compliance.A financial institution may appear on one list but not others, depending on which agency has responsibility for that bank and its CRA compliance. The possibilities are

Federal Reserve Board (www.federalreserve.gov)
FDIC (www.fdic.gov)
Office of Comptroller of the Currency (www.occ.treas.gov)
Office of Thrift Supervision (www.ots.treas.gov)

 

References in periodicals archive ?
Kramer served as a Public Member of the New York State Banking Board where he evidenced his knowledge of, and commitment to, the Community Reinvestment Act and related matters.
4) in the case of branches with deposit-taking capability, the bank's performance under the Community Reinvestment Act.
The new proposal was included in an updated list of activities that are considered favorable in reviewing financial institutions' compliance with the Community Reinvestment Act of 1977.
He has responsibility for all legal matters affecting retail banking including mortgage, home equity, credit and debit cards, privacy, the Community Reinvestment Act, e-commerce, and the USA Patriot Act.
The Community Reinvestment Act itself can use some strengthening by making performance during foreclosure a part of the CRA performance rating.
California's five largest Japanese-owned banks routinely violate the Community Reinvestment Act (CRA) by denying home mortgage and home improvement loans to blacks and other minorities, according to a report released in January.
based QuestSoft is a compliance-software development firm specializing in the Home Mortgage Disclosure Act (HMDA), Community Reinvestment Act (CRA), flood determination and complete compliance management to more than 1,500 banks, credit unions and mortgage companies nationwide.
The Federal Reserve Board on July 16, 2004, announced its intention to withdraw proposed amendments to its Community Reinvestment Act (CRA) regulations Regulation BB, Community Reinvestment).
In its Community Reinvestment Act (CRA) community lending map, BONY had excluded these areas, thus sparking a challenge, under the CRA, from the two community groups.
Community activists, who have alleged discrimination in lending for years, are using this new data to stop banks from expanding unless they agree to greater compliance with the Community Reinvestment Act (CRA).
The Bank of Fall River announced today that it has once again received an "Outstanding" rating for compliance with the Community Reinvestment Act (CRA).
The object of the attack was the Community Reinvestment Act (CRA), an anti-redlining law.

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