History of the CRA
The Community Reinvestment Act (12 USC 2901 (PDF)) was enacted in 1977, against a backdrop of urban decay and a lack of investment in communities. Congress found that banks have a continuing and affirmative obligation to help meet the credit needs of their local communities, including low- and moderate-income (LMI) neighborhoods where they are chartered, consistent with the safe and sound operations of the institutions. This finding was based on preexisting chartering laws that require banks to demonstrate that their deposit taking facilities serve the convenience and needs of their communities, which include credit and deposit services.
Since 1977, Congress has amended the CRA several times, including:
- The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), which required public disclosures of a bank's CRA written evaluation and rating.
- The Federal Deposit Insurance Corporation Improvement Act of 1991, which required the inclusion of a bank's CRA examination data in the determination of its CRA rating.
- The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which (1) required an agency to consider an out-of-state national bank's or state bank's CRA rating when determining whether to allow interstate branches and (2) required separate state and multistate MSA ratings be assigned if a bank has branches in these areas, and prescribed certain requirements for the contents of the written CRA evaluation for banks with interstate branches.
- The Gramm-Leach-Bliley Act (GLBA), which among other things provided regulatory relief for smaller banks by reducing the frequency of their CRA examinations.
In 1978, in response to their statutory directive, the federal banking agencies (the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) established the first CRA regulations. Since then, they have updated these regulations, most significantly in:
- 1995 to focus on a bank's performance rather than process
- 2005 to raise the small bank asset-size threshold, add an intermediate small bank category, and expand the community development definition
In addition, the agencies have periodically published interpretations of the CRA regulations in the form of Interagency Questions and Answers Regarding Community Reinvestment (Q&A guidance) (PDF). The most recent update to the Q&As was published in 2016.
1. Congressional changes made to existing laws. Return to text
2. Congress writes the law and designates specific agencies to write rules that implement the law. These rules are called regulations and may be updated over time. Return to text