Berry december 23, 20, marks 100 years since passage of the federal reserve act, which created the federal reserve system. The act is intended to encourage various financial institutions to help meet the credit. Pdf the community reinvestment act of 1977 cra is the most important federal legislation designed to increase the. Quizlet is a lightning fast way to learn vocabulary. Jul 17, 2008 this report begins with a brief outline of the community reinvestment act of 1977 cra statute and the regulations. Notice of proposed rulemaking community reinvestment act. What was the purpose of the community reinvestment act of.
Community reinvestment act findings and recommendations the community reinvestment act cra of 1977 was enacted to encourage banks to meet the credit and deposit needs of communities that they serve, including low and moderateincome lmi communities, consistent with safe and sound operations. Federal deposit insurance corporation background cra enacted in 1977 to. Signed into law in 1977, the community reinvestment act directs federallyinsured depository institutions to help meet the credit needs of the local communities in which they are chartered, consistent with the safe and sound operation of such institutions. This act may be cited as the housing and community community development act of 1977. At its top level, it divides the world of legislation into fifty topicallyorganized titles, and each title is further subdivided into any number of logical subtopics. The community reinvestment act an overview by stuart c. The community reinvestment act was introduced in 1977 and revised. The purpose and design of the community reinvestment act. Community reinvestment act introduction the community reinvestment act cra is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low and moderateincome neighborhoods, consistent with safe and sound banking operations.
These include meeting the credit needs of low to moderate income neighborhoods, provided that they. We proudly support nonprofit organizations working to strengthen our communities within our community reinvestment act cra footprint and align with our charitable giving priorities, including. The two last sections of the report briefly summarize the provisions of the community reinvestment modernization act of 2007 and conclude. Community reinvestment act of 1977 federal reserve history. Congress enacted the community reinvestment act cra in 1977. Cra addresses how banks meet the credit and capital needs of the communities they serve. Congress enacted the community reinvestment act cra in 1977 to encourage banks and thrift institutions to serve the convenience and needs of the communities in which they are chartered to do business, including low and moderateincome lmi communities, and to do so in a manner consistent with the safe and sound operation of such institutions. Cra charitable giving priorities communitybank of texas is deeply committed to the health and vitalization of the communities in which we live and work. Enacted in 1977, it sought to eliminate bank redlining of poor neighborhoods. The community reinvestment act encourages bank lending to low and moderateincome neighborhoods. Background and summary the community reinvestment act cra of 1977 12 usc 2901, as amended, encourages each insured depository institution covered by the act. To amend certain federal laws pertaining to community development, housing, uct.
Npr that solicits comments concerning the federal community reinvestment act of 1977 cra. Congress in 1977 to ensure that banks and lending institutions treat all communities with dignity and fairness. The community reinvestment act cra was enacted in 1977 to prevent redlining. In enacting the community reinvestment act cra, the congress required each appropriate federal financial supervisory agency to assess an institutions record of helping to meet the credit needs of the local communities in which the institution is chartered, consistent with the safe and sound operation of the institution, and to take this. In this section of the web site, you can find out more about the regulation. The community reinvestment act was enacted by congress in 1977 to encourage banks and thrifts to help meet the needs of the communities where they operate. The cra ensures that banks meet the credit needs of all communities where they take deposits, including low and moderateincome lmi neighborhoods. Cra is implemented by regulations 12 cfr part 25,iv 228,v 345,vi and 563e. The community reinvestment act cra is a federal law that requires banks to meet the credit needs of their entire communities, including low and moderateincome lmi neighborhoods. Cra community reinvestment act rating files from ffiec the federal financial institutions examination council and hmda home mortgage disclosure act lender files. The community reinvestment act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low and moderateincome neighborhoods, consistent with safe and sound banking operations. Perspectives on the future of the community reinvestment act 1 t he community reinvestment act cra, enacted in 1977, has fostered access to financial services for low and moderateincome communities across the country. Community reinvestment act cra an act passed by congress in 1977 to encourage financial institutions to meet the credit needs of the communities in which they operate, including low and moderateincome neighborhoods. Community reinvestment act fact sheet office of the.
Did the community reinvestment act cra lead to risky lending. Cra charitable giving priorities communitybank of texas, n. Oct 25, 2019 the community reinvestment act cra is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low and moderateincome neighborhoods. Vii of the housing and community development act of 1977, and the general laws of rhode island, the westerly community credit union makes the following community reinvestment act statement available for public inspection at all offices of the credit union. The community reinvestment act cra of 1977 was enacted to. Community reinvestment act of 1977 financial definition of. A bill to encourage financial institutions to help meet the credit needs of the communities in which they are chartered.
The secretary of the treasury, in consultation with the federal banking agencies as defined in section 3z of the federal deposit insurance act 12 u. Since comptroller otting was sworn in on november 27, 2017the occ has advocated for, reforming the community reinvestment act cra. Community services targeted to lmi individualsfamilies. A new cra regulatory framework would help regulated.
Perspectives on the future of the community reinvestment act. Housing and community development act of 1977 and community. The effectiveness of the community reinvestment act every crs. The act provided that commercial banks and savings institutions have an obligation to help serve the credit needs of their entire. Enacted in 1977 in response to concerns about redlining, cra established continuing.
The community reinvestment act of 1977 cra encourages certain insured depository institutions to help meet the credit needs of the communities in which they are chartered, including low and moderateincome lmi neighborhoods, consistent with the safe and sound operation of such institutions. Designed to be broad, flexible, and responsive to changes within communities, the law established guidelines to ensure banks serve the needs of their local communities. An institution subject to the community reinvestment act, including savings institutions. Jan 14, 2020 the community reinvestment act cra is a federal law that was passed in 1977 as a way to address discrimination in lending based on race, known as redlining. Banks care about the vibrancy and vitality of their communities, and they support the goals of the community reinvestment act. As part of landmark civil rights legislation passed in the 1960s and 1970s, cra was created in response to redlining, a practice by which. Perspectives on the future of the community reinvestment act 47 t he community reinvestment act cra of 1977 responded to charges of redlining and discrimination by financial institutions.
The united states code is meant to be an organized, logical compilation of the laws passed. Congress passed the community reinvestment act of 1977 cra. In accordance with the provisions of the federal community reinvestment act of 1977 title vii of the housing and community development act of 1977, and the general laws of rhode island, the westerly community credit union makes the following community reinvestment act statement available for public inspection at all offices of the credit union. Introduced in senate 01241977 community reinvestment act states that the purpose of this act is to require each appropriate federal financial supervisory agency to use its authority, when chartering and regulating financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered. In redlining, neighborhoods were designated as not good for investment. Since its passage in 1977, the community reinvestment act. Historical perspectives on the community reinvestment act of 1977 by michael v. Housing and community development act of 1977 and community reinvestment act of 1977, also known as community reinvestment act of 1977housing and community development act of 1977an act to amend certain federal laws pertaining to community development, housing, and related programspublic law 95128, 95th congress, h. Perspectives on the future of the community reinvestment act 86 were not located there, they lacked awareness of. Approved limited purpose, strategic plan, and wholesale institutions. Community reinvestment act of 1977 cra ought to play. 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 moderateincome lmi neighborhoods. The cra statute is recorded in the housing and community development act of 1977 as title viii community reinvestment.
Historical perspectives on the community reinvestment act of. Jun 25, 2019 the community reinvestment act encourages bank lending to low and moderateincome neighborhoods. Community reinvestment act cra interagency joint public hearings. Browse 500 community reinvestment act of 1977 cra classes. It is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low and moderateincome neighborhoods. The community reinvestment act cra was enacted in 1977 to encourage depository institutions to meet the credit needs of their communities. In 2019, the community reinvestment act cra will be fortytwo years old. 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 moderateincome. Federal reserve board community reinvestment act cra. Community reinvestment act illinois state treasurer.
The effectiveness of the community reinvestment act congressional research service 1 cra background and objectives congress passed the community reinvestment act of 1977 cra. The community reinvestment act cra, enacted into law by congress in 1977, 1. The community reinvestment act cra, enacted by congress in 1977 12 u. Pdf the community reinvestment act after thirty years. A law taxing communities and giving that money to banks a law that gave money to people in lowincome areas a law that encouraged bank lending in lowincome areas a law taxing banks and lending that money to lowincome people. A new cra regulatory framework would help regulated financial institutions. It induces depository institutions to help meet the credit needs of the local communities in which they are char. Community reinvestment act financial definition of community. A public cra file which contains detailed information about the banks. Encourage financial institutions to meet the credit needs of their community. It also assesses the costs and the benefits of the 1977 act. In 2018, the office of the comptroller of the currency put out an advance notice of proposed rulemaking to gather feedback on how the cra could be modernized. Fdic law, regulations, related acts rules and regulations. The report then turns to regulatory agencies recent cra compliance rules.
The community reinvestment act cra is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low and moderateincome neighborhoods. The community reinvestment acts harmful legacy competitive. Class search community reinvestment act of 1977 cra quizlet. In 1977 redlining was outlawed by the community reinvestment act. The community reinvestment act examination procedures for small banks appear in a separate booklet, community bank consumer compliance examination procedures. The united states code is meant to be an organized, logical compilation of the laws passed by congress. The community reinvestment act of 1977 cra encourages insured depository institutions. Subprime lending and the community reinvestment act. Class search community reinvestment act of 1977 cra. Community reinvestment act cra enacted by congress in 1977, the cra encourages banks to help meet the credit needs of their communities for housing and other purposes. The effectiveness of the community reinvestment act. That had contributed to the growth of ghettos in the 1970s. The community reinvestment act cra was enacted by the u. The community reinvestment act of 1977 instructs federal financial.
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