Originally enacted in 1977, the Community Reinvestment Act (CRA) fostered access to financial services for low- and moderate-income communities across the country and ensured that banks meet the credit needs of their entire communities. Together with other antidiscrimination, consumer protection, and disclosure laws, the CRA remains today a key element of the regulatory framework.
The Federal Reserve Banks of Boston and San Francisco recently announced the publication of a collection of research papers and essays on the Community Reinvestment Act (CRA). This publication, Revisiting the CRA: Perspectives on the Future of the Community Reinvestment Act, provides perspective on how the Community Reinvestment Act (CRA) has evolved over the years and engages authors to consider what role it should play in the future. With the current financial crisis providing strong impetus for regulatory reform, a re-examination of the CRA seems both appropriate and likely.
Revisiting the CRA includes contributions from academic researchers, representatives of financial institutions and trade groups, current and former regulators, community development professionals, and consumer advocates who share a common desire to improve the regulatory system to ensure access to financial services for all in a safe and sound way. A follow up event entitled, Revisiting CRA: A Policy Discussion was held in Washington, DC on Feburary 24, 2008 to encourage and help frame an informed debate about the future of the CRA.
Regulation BB implements the Community Reinvestment Act of 1977 (CRA), which requires that the federal regulators of banks and thrifts encourage those institutions to help meet the credit needs of the local communities in which they are chartered. The CRA directs the regulatory agencies to assess each institution's record in meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations. The CRA also directs the agencies to take these records into account in evaluating the institutions' applications for deposit facilities, such as a merger with another bank.
Regulation BB implements these requirements and addresses a variety of related matters, including the collection, maintenance, and reporting of data about an institution's performance in meeting the credit needs of its community and the institution's public disclosure of materials evaluating or commenting on its performance. The other three federal bank and thrift regulatory agencies have promulgated regulations substantially identical to Regulation BB.