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Overview
The Community Reinvestment Act, known as the CRA, was enacted by Congress in 1977 and is implemented through regulations of the four agencies: Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and the Office of Thrift Supervision. The CRA is implemented under the Federal Reserve Board's Regulation BB.
The intention of the CRA is to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, and to be consistent with safe and sound lending practices. The Act was created in reaction to three historical trends related to banking and lending: so-called "redlining," disinvestment and housing discrimination. It was also designed as an incentive to invest in affordable housing and economic development. Under the CRA, examiners periodically evaluate an individual bank's record in helping meet a community's credit needs for a specific assessment area. Applications for future approval of bank mergers, acquisitions and branch openings are evaluated based on this record. CRA focuses on whether credit is available in a specific geographic area.
