What was one effect of the Community Reinvestment Act of 1977?
The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
Was a response to the practice of redlining and was enacted in 1977?
Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining….Community Reinvestment Act.
| Effective | October 12, 1977 |
| Citations | |
|---|---|
| Public law | 95-128 |
| Statutes at Large | 91 Stat. 1111 |
| Codification |
Why was the Community Reinvestment Act of 1977 criticized after the onset of the Great Recession?
The proposed law was the subject of heated debate. Critics were concerned the law would create distortions in credit markets and result in credit allocation by the federal bank regulators. They also noted an already heavy regulatory burden, and felt the CRA would encourage riskier lending.
Why was the Community Reinvestment passed in 1977?
The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low- and moderate-income neighborhoods. The CRA requires federal regulators to assess how well each bank fulfills its obligations to these communities.
Was the CRA successful?
The overwhelming majority of studies find that the CRA has succeeded in increasing lending in low- and moderate-income neighborhoods. Inner cities have not yet been wholly transformed by the CRA, but they have been demonstrably improved by the act’s implementa- tion.
Who enacted the CRA?
The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 195, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
Who develops a CRA strategic plan?
In lieu of one of the three primary evaluation methods, the CRA regulations provide banks the option to develop a strategic plan with the input of the community.