Community Reinvestment Act

Background

Banks are granted charters to help meet the needs and convenience of the communities where they are located, including low- and moderate-income neighborhoods. To that goal, the Community Reinvestment Act A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. ( CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. ) requires banks to serve all segments of their community. Yet the CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. does not cover all types of financial institutions or products and has some major gaps.

Banks’ evaluations under the CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. are often inconsistent and lack strong performance-driven measurements. Improved data collection and greater involvement of community-based organizations in the development of performance measures would help make CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. evaluations more effective and could help increase the availability of fairly priced financial services in many low-income communities.

COMMUNITY REINVESTMENT ACT: Policy

Community Reinvestment Act

In this policy: Federal

Bank regulators should ensure that all banks fulfill their obligations under the Community Reinvestment Act A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. ( CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. ). Small banks should not be exempt from the act’s requirements. Each bank should be required to display its current CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. compliance rating prominently on its website. Congress should extend CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. coverage to other industries that offer financial products.

In evaluating compliance, regulators should consider how an institution, and its subsidiaries or partners, comply with:

  • state usury laws setting maximum interest rates that may be charged,
  • other statutes regulating check cashing and payday lending, and
  • state basic-banking laws.

Assessment areas should coincide with the market for an institution’s products

CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. assessments should encourage financial institutions to expand access to basic-banking services at reasonable rates for people with low and moderate incomes.

Financial institutions should receive credit for offering small loans at reasonable rates with realistic repayment periods.

Standardized data should be developed for the CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. ’s service test requirements, particularly given the decline in bank branches in recent years. Banks should be examined to determine whether they effectively market affordable products to consumers with low incomes and assess the services they provide to attract households without bank accounts.

CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. rules should require that regulators assess the activities ofADLs or Activities of Daily Living are the basic tasks of everyday life, such as eating, bathing, dressing, toileting, and transferring. IADLs or Instrumental Activities of Daily Living are activities related to independent living and include preparing meals, managing money, shopping for… bank affiliates engaged in banking, lending, and investment activities. Incentives for increasing high-quality rates and terms should be incorporated into the performance standards for financial institutions under CRA A federal law designed to encourage lending institutions to help meet the credit needs of local communities, particularly with regard to housing. It requires disclosure of loan practices and provides for rating an institution’s record of community service. regulations.