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 moderate-income (LMI) communities, and to do so in a manner “consistent with the safe and sound …
Was the Community Reinvestment Act successful?
Other studies find that the CRA has been effective in encouraging financial institutions to lend to redlined neighborhoods. Several analyses conclude that the CRA had a positive influence in encouraging lending to low- and moderate-income borrowers and in low- and moderate-income neighborhoods.
Why is the Community Reinvestment Act of 1977 important?
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 moderate-income (LMI) neighborhoods.
What did the Community Reinvestment Act of 1977 succeeded in?
Which measures did President Carter propose to help the US economy in the late 1970s? … Iran’s government was replaced by one that was hostile to the United States. The Community Reinvestment Act of 1977 succeeded in. reducing discrimination against borrowers.
Why was the Community Reinvestment Act established?
The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low- and moderate-income neighborhoods. The CRA requires federal regulators to assess how well each bank fulfills its obligations to these communities.
Who started the Community Reinvestment Act?
[1] Congress enacted the CRA in 1977 as a community development initiative that sought to leverage the financial resources of private sector institutions. Senator William Proxmire of Wisconsin was the primary architect of the CRA.
How did the Community Reinvestment Act affect the US economy?
The Community Reinvestment Act encourages bank lending to low- and moderate-income neighborhoods. Enacted in 1977, it sought to eliminate bank “redlining” of poor neighborhoods. That had contributed to the growth of ghettos in the 1970s. In redlining, neighborhoods were designated as not good for investment.
What was the Community Reinvestment Act of 1977 quizlet?
The Community Reinvestment Act (CRA), enacted by Congress in 1977 and implemented by Regulations 12 CFR parts 25, 228, 345, and 195, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
What was the purpose of the Community Reinvestment Act quizlet?
What’s The Community Reinvestment Act ” CRA’s Purpose? The Community Reinvestment Act ” CRA requires lenders to meet the needs of their communities by investing in development and rehabilitation efforts, especially those that enable low- and moderate-income individuals and families to afford a home.
What is the Community Reinvestment Act Why do banks complain so much about it?
Under the Community Reinvestment Act, or CRA, regulators periodically examine banks’ lending practices for low- and moderate-income borrowers. … Banks have complained that they are judged too subjectively and don’t often know what types of activities would qualify for credit under the law.
How did the Community Reinvestment Act affect the US economy quizlet?
How did the Community Reinvestment Act affect the U.S. economy? It enabled low-income citizens to become homeowners. … President Carter allowed the Shah of Iran to seek medical treatment in the United States.
What was the outcome of the Iran hostage rescue attempt quizlet?
What was the outcome of the Iran hostage rescue attempt? The hostages were successfully rescued by military force.
What is the CRA Act of 1970?
The Community Reinvestment Act (CRA) is a law intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound banking operations.
Are credit unions subject to Community Reinvestment Act?
Sen. The bill would not require credit unions to comply with the Community Reinvestment Act (CRA), but codifies existing community outreach, input, and oversight polices already present in NCUA regulations. … “We thank Sen.
What makes a loan CRA eligible?
Generally, loans to small businesses with gross annual revenues $1 million or less that create or retain jobs for low- or moderate-income individuals or in low- or moderate-income geographies, or that otherwise meet the economic development “size” and “purpose” tests, qualify as community development loans.
What qualifies for community reinvestment credit?
For CRA, community development is: affordable housing (including multifamily rental housing) for low- and moderate-income individuals; community services targeted to low- and moderate-income individuals; activities that promote economic development by financing small businesses or small farms (gross annual revenues of …