What is the CRA?

The Community Reinvestment Act or CRA is a law passed by the U.S. Congress in 1977 that promotes the outstanding operation and activity of regulated depository institutions in relation to meeting the credit and deposit needs of the local communities where their business is located.

Purpose of the CRA

The CRA serves as the primary regulation that discourages any financial institution from discriminating against any constituent or business in regard to credit and loan applications. The Act protects individuals in moderate-to-low-income neighborhoods who are denied of credit services.

CRA Examinations

Every year, federal financial supervisory agencies are required by the Act to conduct CRA examinations of all insured financial institutions. It is the obligation of each agency to assess each lending entity's performance in attending the credit needs of the community it served. A written evaluation report is created and necessary actions are carried out against institutions that do not meet the law's requirement.

Financial Supervisory Agencies

The federal financial supervisory agencies authorized by the CRA to administer the examinations are the following:

  • the Federal Deposit Insurance Corporation
  • the Federal Reserve Board
  • the Comptroller of the Currency, and
  • the Office of Thrift Supervision