Community Reinvestment Act (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 moderate-income neighborhoods, in ways consistent with safe and sound lending practices. The act, which was substantially revised in May 1995 and updated again in August 2005, with further clarifications issued through January 2015, applies to federally insured depository institutions, national banks, thrifts, and state-chartered commercial and savings banks. The original mandate of the act has remained the same since its inception, essentially extending and clarifying 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 ...

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