What is the Community Reinvestment Act and what does a Reserve Banks community affairs department do?
In accordance with the Community Reinvestment Act (CRA) of 1977, the Federal Reserve encourages banks to work with community organizations to promote local economic development. In the bank examination process, the Federal Reserve reviews a bank’s efforts to meet the credit needs of its entire community, including low- and moderate-income neighborhoods. For example, the Federal Reserve looks at the extent to which a bank has programs that contribute to the building of affordable housing and to other aspects of community development. Banks are rated separately for compliance with the CRA, and the Federal Reserve takes an institution’s performance under the CRA into account when deciding whether to approve an application for acquisition or merger or for the formation of a bank holding company. The public may protest the approval of an application on the basis of the institution’s record in community reinvestment. Each Reserve Bank has on its staff a community affairs officer who is famil
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- What is the Community Reinvestment Act and what does a Reserve Banks community affairs department do?
