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 ?
The City of Pittsburgh, Department of Finance is soliciting proposals from firms and agencies that are interested in providing professional services for the analysis of community reinvestment of financial institutions, and redrafting of the community reinvestment portion of the Request for Proposals for Depository Services.
Global Banking News-15 June 2010-Solera National Bank appoints community reinvestment act officer(C)2010 ENPublishing - http://www.
The court decision is especially critical to reporters and editors like Matthew Lee, whose non-profit organization includes cutting-edge advocacy, reporting, and organizing in the fields of community reinvestment, fair access to credit, insurance, telecommunications, environmental justice, and government and corporate human rights accountability--on a global scale.
The nonprofit National Community Reinvestment Coalition helps free consumers from the trap of usurious interest rates and exorbitant mortgage payments.
The Center, founded by the National Community Reinvestment Coalition, is working to end abuses associated with appraisal fraud and inflation, which occurs when a lender, appraiser, realtor, broker or title company improperly influences a home's value through the appraisal.
Her focus has been on elimination of predatory lending, support for community reinvestment, and education of communities about fair housing and fair lending issues.
13 /PRNewswire/ -- A major push will get underway on October 14, 2004 to generate comments in support of continued small bank involvement in the Community Reinvestment Act (CRA), which is now jeopardized by a pending Federal Deposit Insurance Corporation (FDIC) rule allowing 1,100 smaller U.
In an effort to ensure that the Community Reinvestment Act (CRA) remains an effective fair lending tool in the changing financial marketplace, Representatives Tom Barrett (D-Wis.
Insurers are not covered by the federal Community Reinvestment Act, but consumer advocates gave a presentation on a similar, but voluntary, program in Massachusetts in which 25 insurers participate.
Besides the dispute over privacy, the bill was snagged for months by a fight between Gramm and Clinton over the senator's opposition to rolling the Community Reinvestment Act into the legislation.
SAN FRANCISCO -- The Federal Reserve Banks of Boston and San Francisco announced today the publication of a collection of research papers and essays on the Community Reinvestment Act (CRA).
The federal bank regulatory agencies, the Federal Reserve Bank of San Francisco, the Federal Reserve Bank of Chicago, and the Community Development Financial Institutions Fund will host the 2014 National Interagency Community Reinvestment Conference in Chicago on March 31 to April 2.

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