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The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, 12 U.S.C. 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

The Community Reinvestment Act of 1977 seeks to address discrimination in loans made to individuals and businesses from low and moderate-income neighborhoods. The Act mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit (in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business.^[1] The law does not list specific criteria for evaluating the performance of financial institutions. Rather, it directs that the evaluation process should accommodate the situation and context of each individual institution. Federal regulations dictate agency conduct in evaluating a bank's compliance in five performance areas, comprising twelve assessment factors. This examination culminates in a rating and a written report that becomes part of the supervisory record for that bank.^[2]

Regulations

The same Federal banking agencies that are responsible for supervising depository institutions are also the agencies that conduct examinations for CRA compliance. These agencies are the Federal Reserve System (FRB), the FDIC, the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS). In 1981, to help achieve the goals of the CRA, each of the Federal Reserve banks established a Community Affairs Office to work with banking institutions and the public in identifying credit needs within the community and ways to address those needs.^[3]

Implementation of the CRA by these financial supervisory agencies is enacted by Title 12 of the Code of Federal Regulations (CFR); Parts 25, 228, 345, and 563e with the addition of Part 203 as it relates to sections of the Home Mortgage Disclosure Act (HMDA).

Table I. - Federal Agencies and the CRA's Corresponding CFR

Federal Financial Supervisory Agency	Code of Federal Regulations	e-CFR	Notes	1995	2005
Office of the Comptroller of the Currency (OCC)	12. C.F.R. Part 25. et seq.	[4]	[5]	[6]	[7][8]
Federal Reserve System (FRB)	12. C.F.R. Part 228. et seq.	[9]	[10]	[11]	[12]
	12. C.F.R. Part 203. et seq.	[13]	[14]	[15]
Federal Deposit Insurance Corporation (FDIC)	12. C.F.R. Part 345. et seq.	[16]	[17]	[18]	[19][20]
Office of Thrift Supervision (OTS)	12. C.F.R. Part 563e. et seq.	[21]	[22]	[23]	[24][25]

In addition to the regulatory framework in place, each federal financial supervisory agency's Inspector General performs regular audits on any regulatory changes made to see if the intended goals are actually being fulfilled.

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History

The original Act was passed by the 95th United States Congress and signed into law by President Jimmy Carter on October 12, 1977 (Pub.L. 95-128, https://www.law.cornell.edu/uscode/text/12/chapter-30). The CRA was passed as a result of national pressure to address the deteriorating conditions of American cities—particularly lower-income and minority neighborhoods.

Original act

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Legislative revision history

The hidden table below lists the acts of Congress that affected the Community Reinvestment Act directly. The years in which the legislative revisions were made appear in bold text preceding the Public Laws that enacted them. The links to the codification and section notes may provide additional information about the legislative changes as well.

Housing and Community Development Act of 1977 − Title VIII
USC Title 12 − Chapter 30 − Community Reinvestment

SEC. 801.  This title may be cited as the "Community Reinvestment Act of 1977"

Codified to 12. U.S.C. § 2901 →Note←   |   *short title citation found under section notes

[Source:  Section 801 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977]

SEC. 802.  Congressional Findings and Statement of Purpose

Codified to 12 U.S.C. § 2901  |  notes

[Source:  Section 802 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977]

SEC. 803.  Definitions

Codified to 12. U.S.C. § 2902  |  notes

[Source:  Section 803 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977; as amended by section 1502 of title XV of the Act of November 10, 1978 (Pub. L. No. 95–630; 92 Stat. 3713), effective November 10, 1978; sections 744(q) of title VII and 1212(a) of title XII of the Act of August 9, 1989 (Pub. L. No. 101–73; 103 Stat. 440 and 526, respectively), effective August 9, 1989; and section 358(1) of title III of the Act of July 21, 2010, (Pub. L. No. 111–203; 124 Stat. 1548), effective July 21, 2011]

SEC. 804.  Financial Institutions; Evaluation

Codified to 12. U.S.C. § 2903  |  notes

[Source:  Section 804 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1148), effective October 12, 1977; as amended by section 909(1) of title IX of the Act of October 28, 1992 (Pub. L. No. 102–550; 106 Stat. 3874), effective October 28, 1992; section 103(b) of title I of the Act of November 12, 1999 (Pub. L. No. 106–102; 113 Stat. 1351), effective March 12, 2000; section 1031(a) of title X of the Act of August 14, 2008 (Pub. L. No. 110–315; 122 Stat. 3488), effective August 14, 2008]

SEC. 805.  Report to Congress

Codified to 12. U.S.C. § 2904  |  notes

[Source:  Section 805 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1148), effective October 12, 1977]

SEC. 806.  Regulations

Codified to 12. U.S.C. § 2905  |  notes

[Source:  Section 806 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1148), effective October 12, 1977; as amended by section 358(2) of title III of the Act of July 21, 2010, (Pub. L. No. 111–203; 124 Stat. 1548), effective July 21, 2011]

SEC. 807.  Written Evaluations

Codified to 12. U.S.C. § 2906  |  notes

[Source:  Section 807 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977, as added by section 1212(b) of title XII of the Act of August 9, 1989 (Pub. L. No. 101–73; 103 Stat. 526), effective August 9, 1989; amended by section 222 of title II of the Act of December 19, 1991 (Pub. L. No. 102–242; 105 Stat. 2306), effective December 19, 1991; section 110 of title I of the Act of September 29, 1994 (Pub. L. No. 103–328; 108 Stat. 2364), effective September 29, 1994]

SEC. 808.  Operation of Branch Facilities by Minorities and Women

Codified to 12. U.S.C. § 2907  |  notes

[Source:  Section 808 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977, as added by section 402(b) of title IV of the Act of December 12, 1991 (Pub. L. No. 102–233; 105 Stat. 1775), effective December 12, 1991; as amended by section 909(2) of title IX of the Act of October 28, 1992 (Pub. L. No. 102–550; 106 Stat. 3874), effective October 28, 1992]

SEC. 809.  Small Bank Regulatory Relief

Codified to 12. U.S.C. § 2908  |  notes

[Source:  Section 809 of title VIII of the Act of October 12, 1977 (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977, as added by section 712 of the Act of November 12, 1999 (Pub. L. No. 106–102; 113 Stat. 1469), effective November 12, 1999]

Regulatory changes 2007

This OTS rule revision aligned with that of the other agencies by:

1. eliminating the option of alternative weights for lending, investment, and service under the large, retail savings association test;
2. defining institutions with assets between $250 million and $1 billion as "intermediate small savings associations" subject to a new community development test;
3. indexing the asset threshold for "small" and "intermediate small" savings associations annually based on changes to the Consumer Price Index (CPI); and
4. clarifying the adverse impact on a savings association's CRA rating where the OTS finds evidence of discrimination or other illegal credit practices.

These four changes generally mirror the ones made by the other three federal agencies in late 2005. The agency noted that latitude would be provided for a short period of time to institutions in the context of examinations conducted after the effective date, July 1, 2007, in order to implement program changes under the new rule smoothly.

Legislative changes 2008

All the affected Federal financial supervisory agencies have one year after the date of enactment to issue rules in final form to implement the change into the Code of Federal Regulations (CFR) according to Title X, Subtitle C, Section 1031 of the Act.

CRA reform proposals

On February 13, 2008, the United States House Committee on Financial Services held a hearing on the Community Reinvestment Act's impact on the provision of loans, investments and services to under-served communities and its effectiveness. There were 15 witnesses from government and the private sector.

References

Notes

1. Bernanke, Ben S. (March 30, 2007). "The Community Reinvestment Act: Its Evolution and New Challenges". Prepared Speech by the Chairman of the Federal Reserve System before the Community Affairs Research Conference. Federal Reserve System (FRB). 

   CRA is designed as a simple test for how financial institutions are meeting obligations to serve the convenience and needs of the local market where they are located. This principle is one that federal law governing deposit insurance, bank charters, and bank mergers had embodied long before the enactment of CRA.

2. "Prepared Speech, Footnote #8, The CRA: Its Evolution and New Challenges". Ben S. Bernanke, Chairman of the Federal Reserve System. before the Community Affairs Research Conference. 2007-03-30. p. Federal Reserve System (FRB). 
3. “The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain”, February 13, 2008
   This hearing before the full House Committee on Financial Services examined the impact of CRA on the provision of loans, investments and services to under-served communities. In addition to exploring CRA's success, the hearing hoped to examine challenges that prevent the law from being more effective for the future. | Printed Hearing: 110-90(PDF)
4. "Community Reinvestment Act and Interstate Deposit Production Regulations". Code of Federal Regulations, Title 12, Chapter I, Part 25. gpoaccess.gov. Retrieved 2009-04-16. 
5. "Community Reinvestment Act (CRA) Information". Office of the Comptroller of the Currency (OCC). Retrieved 2009-04-16. 
6. "OCC Regulations (1995)". Federal Register - Vol. 60, No. 86. gpoaccess.gov. 1995-05-04. p. 22178. Retrieved 2009-04-16. 
7. "Community Reinvestment Act Regulations (2005) for OCC". Press Release. OCC. 2005-08-24. Retrieved 2009-04-26. 
8. "OCC Regulations (2005)". Federal Register - Vol. 70, No. 147. gpoaccess.gov. 2005-08-02. p. 44266. Retrieved 2009-04-26. 
9. "Community Reinvestment (Regulation BBP)". Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 228. gpoaccess.gov. Retrieved 2009-04-16. 
10. "Community Reinvestment Act". Federal Reserve Board. Retrieved 2009-04-16. 
11. "Federal Reserve Regulations (1995) pt. 1". Federal Register - Vol. 60, No. 86. gpoaccess.gov. 1995-05-04. p. 22189. Retrieved 2009-04-16. 
12. "Federal Reserve Regulations (2005)". Federal Register - Vol.70, No. 147. gpoaccess.gov. 2005-08-02. p. 44267. Retrieved 2009-04-26. 
13. "Home Mortgage Disclosure (Regulation C)". Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 203. gpoaccess.gov. Retrieved 2009-04-16. 
14. "Home Mortgage Disclosure Act (HMDA) Information". Federal Financial Institutions Examination Council (FFIEC). Retrieved 2009-04-16. 
15. "Federal Reserve Regulations (1995) pt. 2". Federal Register - Vol. 60, No. 86. gpoaccess.gov. 1995-05-04. p. 22223. Retrieved 2009-04-16. 
16. "Community Reinvestment (for the FDIC)". Code of Federal Regulations, Title 12, Chapter III, Subchapter B, Part 345. gpoaccess.gov. Retrieved 2009-04-16. 
17. "Community Reinvestment Act (CRA) Background". Federal Deposit Insurance Corporation (FDIC). Retrieved 2009-04-17. 
18. "FDIC Regulations (1995)". Federal Register - Vol. 60, No. 86. gpoaccess.gov. 1995-05-04. p. 22201. Retrieved 2009-04-16. 
19. "Community Reinvestment Act Interagency Examination Procedures". Federal Deposit Insurance Corporation. 2006-04-10. Retrieved 2009-04-26. 
20. "FDIC Regulations (2005)". Federal Register - Vol. 70, No. 147. gpoaccess.gov. 2005-08-02. p. 44269. Retrieved 2009-04-26. 
21. "Community Reinvestment (for the OTS)". Code of Federal Regulations, Title 12, Chapter V, Part 563e. GPO. Retrieved 2009-04-16. 
22. "CRA History and OTS's CRA Responsibilities". Office of Thrift Supervision (OTS). Retrieved 2009-04-16. 
23. "OTS Regulations (1995)". Federal Register - Vol. 60, No. 86. gpoaccess.gov. 1995-05-04. p. 22212. Retrieved 2009-04-16. 
24. "OTS Announces Final CRA Rule". Office of Thrift Supervision. 2005-02-28. Retrieved 2009-04-26. 
25. "OTS Regulations (2005)". Federal Register - Vol. 70, No. 40. gpoaccess.gov. 2005-03-02. p. 10023. Retrieved 2009-04-26. 

External links

• Public Law 95-128, 95th Congress, H.R. 6655: Housing and Community Development Act of 1977 [Community Reinvestment Act]
• Prepared Testimony, Member Statements & Transcripts:
  • Prepared Statement by Sandra F. Braunstein, Director of the Division of Consumer and Community Affairs, Federal Reserve Board (FRB)
  • Prepared Statement by Michael S. Barr (PDF), Professor, University of Michigan Law School
  • Statement by Congressman Marchant (PDF)

• Federal Financial Institutions Examination Council, (FFIEC), contains detailed information on the CRA and its implementing regulations, including CRA National Aggregate Reports for the years 1996 to 2009