What is the Community Reinvestment Act (CRA)?
The Community Reinvestment Act (CRA) of 1977 was passed by Congress to ensure that banks meet the credit needs of their local communities and to encourage investment in the immediate communities served by depository institutions. Banks are rated periodically on their efforts to achieve these goals. The Federal Financial Institutions Examination Council (FFIEC) provides an interagency CRA rating database on its website. In addition, each bank has available for public review a file giving its CRA rating and additional information that it is required to prepare.
Filed in: Glossary of Bills and Laws As U.S. leaders discuss how to turn the economy around, one of the issues Republicans have brought up is the Community Reinvestment Act (CRA). Republicans have stated that CRA government regulations lead to or even created the subprime mortgage crisis, and serves as an example of why government regulation should be relaxed. I decided to write about CRA because it is not a “mortgage” law. CRA also addresses commercial business loans, and was enacted to help curtail discriminatory lending practices that largely impacted communities with high minority populations. Women in these areas were hit particularly hard as they were unable to access credit, purchase homes, or expand their businesses. Why Was the Community Reinvestment Act Necessary? The CRA was enacted in 1977 under the Jimmy Carter administration “to encourage depository institutions to help meet the credit needs [includi
