What Is the Community Reinvestment Act (CRA)? Definition

The Community Reinvestment Act (CRA) is a United States federal law designed to encourage commercial banks and savings associations to help meet the credit needs of local communities, including low- and moderate-income neighborhoods. The CRA was enacted in 1977 with the stated goal of helping to ensure that all Americans have access to credit, regardless of their race, ethnicity, or income.

The CRA requires banks and savings associations to take into account the needs of the communities in which they operate when making lending decisions. Banks and savings associations must also provide information about their lending activities to the public. The CRA is enforced by the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA).

The CRA has been a controversial law since its inception. Some critics argue that the CRA has led to banks making loans to borrowers who are not creditworthy, which has increased the risk of default. Other critics argue that the CRA has not been effective in increasing lending to low- and moderate-income communities.

Despite the controversy, the CRA remains in effect today. The law has been amended several times over the years, and the regulatory agencies that enforce the law have issued a number of regulations to clarify its requirements.

The CRA has had a significant impact on the banking industry. Banks and savings associations have made changes to their lending practices in order to comply with the law. The CRA has also led to the development of new products and services that are designed to meet the needs of low- and moderate-income communities.

The CRA is a complex law with a long history. It is a law that is constantly evolving, as the regulatory agencies that enforce the law issue new regulations and as the courts interpret the law in new ways. The CRA is a law that is still being debated today, and it is likely to continue to be debated for many years to come.