The Community Reinvestment Act is intended to encourage
depository institutions to help meet the credit needs of the communities
in which they operate, including low- and moderate-income neighborhoods.
It was enacted by the Congress in 1977 and was revised in May 1995.
Evaluation of CRA performance
The CRA requires that each depository institution's record
in helping meet the credit needs of its entire community be evaluated
periodically. That record is taken into account in considering an institution's
application for deposit facilities.
Neither the CRA nor its implementing regulation gives specific criteria
for rating the performance of depository institutions. Rather, the law
indicates that the evaluation process should accommodate an institution's
individual circumstances. Nor does the law require institutions to make
high-risk loans that jeopardize their safety. To the contrary, the law
makes it clear that an institution's CRA activities should be undertaken
in a safe and sound manner.
CRA examinations are conducted by the federal agencies that are responsible
for supervising depository institutions: the Federal Reserve System,
the Federal Deposit Insurance Corp., the Office of the Comptroller of
the Currency and the Office of Thrift Supervision. Interagency information
about CRA is available from the Federal Financial Institutions Examination
At the end of the CRA examination process, depository institutions receive
one of the following ratings of performance: Outstanding, Satisfactory,
Needs to Improve, or Substantial Noncompliance.
Reinvestment Act, The Fed's Board of Governors Web site.
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