52-472: 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
104-404: 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. The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to
156-737: A financial holding institution by the Board of Governors of the Federal Reserve System would also have to follow Community Reinvestment Act compliance guidelines before any merger or expansion could take effect. At the same time the G-L-B Act's changes to the Federal Deposit Insurance Act would now allow for bank expansions into new lines of business, non-affiliated groups entering into agreements with these bank or financial institutions would also have to be reported as outlined under
208-520: A person lives, "The only thing that ought to matter on a loan application is whether or not you can pay it back, not where you live." Bentsen said that the proposed changes would "make it easier for lenders to show how they're complying with the Community Reinvestment Act", and "cut back a lot of the paperwork and the cost on small business loans". By early 1995, the proposed CRA regulations were substantially revised to address criticisms that
260-617: 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). The Federal Financial Institutions Examination Council (FFIEC) coordinates inter-agency information about the CRA. Information about the CRA ratings of individual banking institutions from the three responsible agencies (Federal Reserve, FDIC, and OCC),
312-537: Is publicly available from the website of the FFIEC. These ratings were first made available by the Clinton administration to enable public participation and public comment on CRA performance. 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. The original Act
364-565: The Community Reinvestment Act ratings received by the out-of-state bank as a consideration when determining whether to allow interstate branches. According to Bernanke, a surge in bank merger and acquisition activities followed the passing of the act, and advocacy groups increasingly used the public comment process to protest bank applications on Community Reinvestment Act grounds. When applications were highly contested, federal agencies held public hearings to allow public comment on
416-562: The Constitution . This is the last time the Democratic Party or any political party held a 2/3 supermajority in the House. This is the last congress to at any point have no female senators (from its beginning, January 3, 1977, until the swearing-in of Muriel Humphrey (D- MN ) on January 25, 1978; and again from the departure of both Humphrey and Maryon Allen (D- AL ) on November 7, 1978, to
468-548: The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac , the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 , which repealed restrictions on interstate banking, listed
520-687: The Federal Reserve System (FRB), the FDIC, and the Office of the Comptroller of the Currency (OCC). 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. Implementation of the CRA by these financial supervisory agencies
572-602: The Home Owners' Loan Corporation (HOLC) for the FHA were used by private and public entities for years afterwards to withhold mortgage capital from neighborhoods that were deemed "unsafe". Contributory factors in the shortage of direct lending in low- and moderate-income communities were a limited secondary market for mortgages, informational problems to do with the lack of credit evaluations for lower-income borrowers, and lack of coordination among credit agencies. In Congressional debate on
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#1732845362674624-491: The U.S. Commission on Civil Rights found that African-American borrowers were often required to make higher downpayments and adopt faster repayment schedules. The commission also documented blanket refusals to lend in particular areas ( redlining ). The allegations of "redlining" certain neighborhoods originated with the Federal Housing Administration in the 1930s. The "residential security maps" created by
676-402: The savings and loan crisis of the 1980s. As part of the subsequent general reform of the banking industry, FIRREA added section 807 ( 12. U.S.C. § 2906 ) to the existing CRA statutes in an effort to improve the area concerning insured depository institution examinations. The new language now required the appropriate Federal regulatory agency to prepare a written evaluation after completing
728-546: The "Community Reinvestment Act of 1977" [ 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 [ 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 [ Source : Section 803 of title VIII of
780-974: The Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining . The Act instructs the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation ( Section 802 ). To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions ( Section 804 ). The Community Reinvestment Act of 1977 sought 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
832-487: 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 [ Source : Section 808 of title VIII of
884-469: The Act of July 21, 2010 , (Pub. L. No. 111–203; 124 Stat. 1548), effective July 21, 2011] SEC. 804 . Financial Institutions; Evaluation [ 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
936-502: 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 [ 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 [ Source : Section 806 of title VIII of
988-483: 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 [ Source : Section 809 of title VIII of
1040-406: 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] The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) was enacted by the 101st Congress and signed into law by President George H. W. Bush in the wake of
1092-438: 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
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#17328453626741144-468: 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 [ 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
1196-522: The Act to complain about law enforcement of the regulations. 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. SEC. 801 . This title may be cited as
1248-418: The Act, critics charged that the law would create unnecessary regulatory burdens. Partly in response to these concerns, Congress included little prescriptive detail and simply directs the banking regulatory agencies to ensure that banks and savings associations serve the credit needs of their local communities in a safe and sound manner. Community groups only slowly organized to take advantage of their right under
1300-627: The Assistant to the President for Economic Policy, under President Clinton, explained that this was in line with President Clinton's strategy to "deal with the problems of the inner city and distressed rural communities". Discussing the reasons for the Clinton administration's proposal to strengthen the CRA and further reduce red-lining, Lloyd Bentsen , Secretary of the Treasury at that time, affirmed his belief that availability of credit should not depend on where
1352-460: The Currency (OCC) also moved to revise its regulation structure allowing lenders subject to the CRA to claim community development loan credits for loans made to help finance the environmental cleanup or redevelopment of industrial sites when it was part of an effort to revitalize the low- and moderate-income community where the site was located. During one of the Congressional hearings addressing
1404-567: The Federal financial supervisory agencies (the OCC, FRB, FDIC, and OTS) made further clarifications relating to definition, assessment, ratings and scope; sufficiently resolving many of the issues raised in the process. The agencies jointly reported their final amended regulations for implementing the Community Reinvestment Act in the Federal Register on May 4, 1995. The final amended regulations replaced
1456-533: The ability of advocacy groups, researchers, and other analysts to "perform more-sophisticated, quantitative analyses of banks' records", thereby influencing the lending policies of banks. Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks." Around the time of the introduction of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA),
1508-432: The addition of section 808 ( 12. U.S.C. § 2907 ) to the existing CRA statutes by the Act, any depository institution which donated, sold with favorable terms (as determined by the appropriate Federal financial supervisory agency), or made available on a rent-free basis any branch of such institutions located in any predominantly minority neighborhood to any minority depository institution or women's depository institution,
1560-484: The amount of the contribution or the amount of the loss incurred in connection with such activity would go towards meeting the credit needs of the institution's community and would be taken into consideration when CRA examinations were evaluated. Although minor amendments were made directly to the Community Reinvestment Act concerning the consideration of minority and female owned institutions & partnerships during evaluations first established in 1991, other portions of
1612-497: The appropriate Federal regulatory agencies had reliably compiled enough institution examination data to warrant its inclusion in the public section of the written evaluations first established in 1989. With the passage of this Act in December 1991, section 807 ( 12. U.S.C. § 2906 ) was amended to require the inclusion of any examination data relevant in determining an institutions CRA rating as well. A week earlier that same December,
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1664-474: 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. 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
1716-502: The bank's lending record. In response many institutions established separate business units and subsidiary corporations to facilitate CRA-related lending. Local and regional public-private partnerships and multi-bank loan consortia were formed to expand and manage such CRA-related lending. In July 1993, President Bill Clinton asked regulators to reform the CRA in order to make examinations more consistent, clarify performance standards, and reduce cost and compliance burden. Robert Rubin ,
1768-455: The banking system in general. Niskanen believed that the primary long-term effect would be an artificial contraction of the banking system. Niskanen recommended Congress repeal the Act . Niskanen's, and other respondents to the proposed changes, voiced their concerns during the public comment & testimony periods in late 1993 through early 1995. In response to the aggregate concerns recorded by then,
1820-497: The basis of race, sex, or other personal characteristics. The Home Mortgage Disclosure Act requires that financial institutions publicly disclose mortgage lending and application data. In contrast with those acts, the CRA seeks to ensure the provision of credit to all parts of a community, regardless of the relative wealth or poverty of a neighborhood. Before the Act was passed, there were severe shortages of credit available to low- and moderate-income neighborhoods. In their 1961 report,
1872-562: The beginning of the first session of this Congress. Lists of committees and their party leaders for members of the House and Senate committees can be found through the Official Congressional Directory at the bottom of this article. The directory after the pages of terms of service lists committees of the Senate, House (Standing with Subcommittees, Select and Special) and Joint and, after that, House/Senate committee assignments. On
1924-456: The early swearing-in of Nancy Kassebaum (R- KS ) on December 23, 1978). [1] In this Congress, Class 2 meant their term ended with this Congress, facing re-election in 1978; Class 3 meant their term began in the last Congress, facing re-election in 1980; and Class 1 meant their term began in this Congress, facing re-election in 1982. Members of the House of Representatives elected statewide at-large , are preceded by "At-large", and
1976-418: The examination of an institution's record in meeting the credit needs of its entire community, including any low- and moderate-income neighborhoods within it. These evaluation reports were divided into separate sections - one confidential; allowing the evaluated institution to retain its proprietary and personal information integrity at the same time the beginnings of the related databases were being compiled, and
2028-743: The existing CRA regulations in their entirety. (See the notes in the "1995" column of Table I. for the specifics) In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act , also known as the Financial Services Modernization Act . This law repealed the part of the Glass–Steagall Act that had prohibited a bank from offering a full range of investment , commercial banking , and insurance services since its enactment in 1933. A similar bill
2080-684: The existing CRA statute was amended once again upon the enactment of the Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 . It allowed the Resolution Trust Corporation (RTC) to make available any branch of any savings association located in any predominantly minority neighborhoods that the RTC had been appointed the conservator or receiver of any minority depository institution or women's depository institution with favorable conditions. Upon
2132-583: The fall of 1999, Senators Dodd and Schumer prevented another impasse by securing a compromise between Sen. Gramm and the Clinton Administration by agreeing to amend the Federal Deposit Insurance Act ( 12 U.S.C. ch. 16 ) to allow banks to merge or expand into other types of financial institutions. The FDIC related provisions of the new Gramm-Leach-Bliley Act , along with the addition of sub-section § 2903(c) directly to Title 12, insured any bank holding institution wishing to be re-designated as
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2184-445: The institution. An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA. The same banking agencies that are responsible for supervising depository institutions are also the agencies that conduct examinations for CRA compliance. These agencies are
2236-424: The names of those elected from districts, are preceded by their district numbers. Many of the congressional district numbers are linked to articles describing the district itself. Since the boundaries of the districts have changed often and substantially, the linked article may only describe the district as it exists today, and not as it was at the time of this Congress. The count below reflects changes from
2288-650: The national fight to pass, and later to enforce the Act. Several legislative and regulatory revisions have since been enacted. The CRA followed similar laws passed to reduce discrimination in the credit and housing markets including the Fair Housing Act of 1968, the Equal Credit Opportunity Act of 1974 and the Home Mortgage Disclosure Act of 1975 (HMDA). The Fair Housing Act and the Equal Credit Opportunity Act prohibit discrimination on
2340-626: The newly added section to Title 12, § 1831y (CRA Sunshine Requirements) , to satisfy Gramm's concerns. Title 12 of the United States Code Title 12 of the United States Code outlines the role of Banks and Banking in the United States Code . This United States federal legislation article is a stub . You can help Misplaced Pages by expanding it . 95th United States Congress The 95th United States Congress
2392-520: The other made public; intended to increase access and oversight of the CRS examination process. The public section introduced a four-tiered CRA examination rating system with performance levels of 'Outstanding', 'Satisfactory', 'Needs to Improve', or 'Substantial Noncompliance', each supplemented with a written synopsis of the agencies' evaluation reasoning using any available facts to support their conclusions. According to Ben Bernanke , this law greatly increased
2444-458: The proposed changes in 1995, William A. Niskanen , chair of the Cato Institute , criticized both the 1993 and 1994 sets of proposals for political favoritism in allocating credit, for micromanagement by regulators and for the lack of assurances that banks would not be expected to operate at a loss to achieve CRA compliance. He predicted the proposed changes would be very costly to the economy and
2496-466: The regulations, and the agency's implementation of them through the examination process to date, were too process-oriented, burdensome, and not sufficiently focused on actual results. The CRA examination process itself was reformed to incorporate the pending changes. Information about banking institutions' CRA ratings was made available via web page for public review as well. The Office of the Comptroller of
2548-648: Was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives . It met in Washington, D.C. , from January 3, 1977, to January 3, 1979, during the final weeks of Gerald Ford 's presidency and the first two years of Jimmy Carter 's presidency . The apportionment of seats in this House of Representatives
2600-497: Was based on the 1970 United States census . Both chambers maintained a Democratic supermajority , and with Jimmy Carter being sworn in as president on January 20, 1977, this gave the Democrats an overall federal government trifecta for the first time since the 90th Congress ending in 1969. As of 2022 , this was the most recent Congress to approve an amendment (the unratified District of Columbia Voting Rights Amendment ) to
2652-533: Was introduced in 1998 by Senator Phil Gramm but it was unable to complete the legislative process into law. Resistance to enacting the 1998 bill, as well as the subsequent 1999 bill, centered around the legislation's language which would expand the types of banking institutions of the time into other areas of service but would not be subject to CRA compliance in order to do so. The Senator also demanded full disclosure of any financial "deals" which community groups had with banks, accusing such groups of "extortion". In
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#17328453626742704-468: Was passed by the 95th United States Congress and signed into law by President Jimmy Carter on October 12, 1977 ( Pub.L. 95-128 , 12 U.S.C. ch. 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. Community activists, such as Gale Cincotta of National People's Action in Chicago, led
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