Community Reinvestment Act of 1977 (CRA)

In 1977, the U.S. Congress enacted the Community Reinvestment Act (CRA) to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderateincome neighborhoods, in ways consistent with safe and sound lending practices. The act, which applies to federally insured depository institutions, national banks, thrifts, and state-chartered commercial and savings banks, essentially extends and clarifies the long-standing expectation that banks must serve the convenience and needs of their local communities.

Prior to the passage of the CRA, many bankers were accused of redlining, a practice of systematically excluding low-income neighborhoods and people of color from their lending products, investments, and financial services. The term was coined by community activists when they found that the lack of bank ...