Editing Community Reinvestment Act

{{Short description|US federal law}}
{{CS1 config|mode=cs1}}
{{Hatnote|Not to be confused with a [[redevelopment agency|community redevelopment agency]], also called by the acronym "CRA".}}
{{Infobox U.S. legislation
| shorttitle        = Community Reinvestment Act
| othershorttitles  = Indian and Alaska Native Community Development Act
| longtitle         = An Act to amend certain Federal laws pertaining to community development, housing, and related programs.
| colloquialacronym = 
| nickname          = Housing and Community Development Act of 1977
| enacted by        = 95th
| effective date    = October 12, 1977
| public law url    = http://www.gpo.gov/fdsys/pkg/STATUTE-91/pdf/STATUTE-91-Pg1111.pdf
| cite public law   = 95-128
| cite statutes at large = {{usstat|91|1111}}
| acts amended    = 
| acts repealed   = 
| title amended   = [[Title 42 of the United States Code|42 U.S.C.: Public Health and Social Welfare]]
| sections created =
| sections amended = {{Usc-title-chap|42|69}} § 5301
| leghisturl      = http://thomas.loc.gov/cgi-bin/bdquery/z?d095:HR06655:@@@R
| introducedin    = House
| introducedbill  = {{USBill|95|H.R.|6655}}
| introducedby    = [[Henry S. Reuss]] ([[Democratic Party (United States)|D]]–[[Wisconsin|WI]])
| introduceddate  = April 26, 1977
| committees      = [[United States Senate Committee on Banking, Housing, and Urban Affairs|House Banking, Finance, and Urban Affairs]], [[United States Senate Committee on Banking, Housing, and Urban Affairs|Senate Banking, Housing, and Urban Affairs]]
| passedbody1     = House
| passeddate1     = May 11, 1977
| passedvote1     = [http://www.govtrack.us/congress/votes/95-1977/h203 369-20]
| passedbody2     = Senate
| passedas2       = <!-- used if the second body changes the name of the legislation -->
| passeddate2     = June 7, 1977
| passedvote2     = [http://www.govtrack.us/congress/votes/95-1977/s177 79-7], in lieu of {{USBill|95|S.|1523}}
| conferencedate  = September 26, 1977
| passedbody3     = Senate
| passeddate3     = October 1, 1977
| passedvote3     = [http://www.govtrack.us/congress/votes/95-1977/s513 54-19]
| agreedbody3     = <!-- used when the other body agrees without going into committee -->
| agreeddate3     = <!-- used when the other body agrees without going into committee -->
| agreedvote3     = <!-- used when the other body agrees without going into committee -->
| agreedbody4     = <!-- used if agreedbody3 further amends legislation -->
| agreeddate4     = <!-- used if agreedbody3 further amends legislation -->
| agreedvote4     = <!-- used if agreedbody3 further amends legislation -->
| passedbody4     = House
| passeddate4     = October 4, 1977
| passedvote4     = [http://www.govtrack.us/congress/votes/95-1977/h577 384-26]
| signedpresident = [[Jimmy Carter]]
| signeddate      = October 12, 1977
| unsignedpresident = <!-- used when passed without presidential signing -->
| unsigneddate    = <!-- used when passed without presidential signing -->
| vetoedpresident = <!-- used when passed by overriding presidential veto -->
| vetoeddate      = <!-- used when passed by overriding presidential veto -->
| overriddenbody1 = <!-- used when passed by overriding presidential veto -->
| overriddendate1 = <!-- used when passed by overriding presidential veto -->
| overriddenvote1 = <!-- used when passed by overriding presidential veto -->
| overriddenbody2 = <!-- used when passed by overriding presidential veto -->
| overriddendate2 = <!-- used when passed by overriding presidential veto -->
| overriddenvote2 = <!-- used when passed by overriding presidential veto -->
| amendments      = 
| SCOTUS cases    = 
}}
The '''Community Reinvestment Act''' ('''CRA''', P.L. 95-128, 91 Stat. 1147, title VIII of the '''Housing and Community Development Act of 1977''', {{USC|12|2901}} ''et seq.'') is a [[United States federal law]] designed to encourage commercial [[bank]]s and [[savings and loan association|savings associations]] to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.<ref name="fdic.gov">[http://www.fdic.gov/regulations/laws/rules/6500-2515.html#6500hcda1977 Text of Housing and Community Development Act of 1977 — Title VIII (Community Reinvestment)] {{webarchive|url=https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html |date=2008-09-16 }}</ref><ref name="ABC">{{cite web|url=http://www.clevelandfed.org/research/Commentary/2000/1100.htm|title=The Performance and Profitability of CRA-Related Lending|last1=Avery|first1=Robert B.|last2=Bostic|first2=Raphael W.|last3=Canner|first3=Glenn B.|date=2000-11-01|work=Economic Commentary|publisher=Federal Reserve Bank of Cleveland|access-date=2008-10-05|url-status=dead|archive-url=https://web.archive.org/web/20081007045205/http://www.clevelandfed.org/research/commentary/2000/1100.htm|archive-date=2008-10-07}}</ref><ref name="Federal Reserve">{{cite web|url=http://www.federalreserve.gov/dcca/cra|title=Community Reinvestment Act|publisher=Federal Reserve Board (FRB)|access-date=2008-10-05 }}</ref> Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as [[redlining]].<ref name="Bernanke">{{cite web|first=Ben S.|last=Bernanke|title=The Community Reinvestment Act: Its Evolution and New Challenges|url=http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm|work=Prepared Speech by the Chairman of the Federal Reserve System before the Community Affairs Research Conference|publisher=Federal Reserve System (FRB)|date=March 30, 2007}}<blockquote>CRA is designed as a simple test for how financial institutions are meeting obligations to serve the convenience and needs of the local market where they are located. This principle is one that federal law governing deposit insurance, bank charters, and bank mergers had embodied long before the enactment of CRA.</blockquote></ref><ref name="30years">[http://financialservices.house.gov/hearing110/ht021308.shtml "The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain"] {{Webarchive|url=https://web.archive.org/web/20090430023055/http://financialservices.house.gov/hearing110/ht021308.shtml |date=2009-04-30 }},  February 13, 2008<br />
This hearing before the full House Committee on Financial Services examined the impact of CRA on the provision of loans, investments and services to under-served communities. In addition to exploring CRA's success, the hearing hoped to examine challenges that prevent the law from being more effective for the future. '''|'''  [http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_house_hearings&docid=f:41181.pdf Printed Hearing: 110-90](PDF)</ref>

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 ([[s:Community Reinvestment Act of 1977#Sec. 802.|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 [[Branch (banking)|bank branches]] or for [[Mergers and acquisitions|mergers or acquisitions]] ([[s:Community Reinvestment Act of 1977#Sec. 804.|Section 804]]).<ref name="St. Louis Fed">{{cite web|url=http://www.stlouisfed.org/community_development/cra.cfm#main|title=The Community Reinvestment Act|publisher=Federal Reserve Bank of St. Louis|access-date=2008-10-06|archive-date=2010-06-15|archive-url=https://web.archive.org/web/20100615005155/http://stlouisfed.org/community_development/cra.cfm#main|url-status=dead}}</ref>
[[File:Holc redlining 1937.jpeg|thumb|right|300px|The CRA was passed to discourage [[redlining]], a practice originally based on [[Home Owners' Loan Corporation]] "residential security maps", like this 1937 security map of Philadelphia.]]

==Enforcement==
The Community Reinvestment Act of 1977 sought to address [[discrimination]] in loans made to individuals and businesses from low and moderate-income neighborhoods.<ref name="Ardalan">Kavous Ardalan, [http://findarticles.com/p/articles/mi_qa5537/is_200601/ai_n21406758/pg_1?tag=artBody;col1bnet Community Reinvestment Act: Review of Empirical Evidence], Academy of Banking Studies Journal, 2006.</ref>  The Act mandates that all banking institutions that receive [[Federal Deposit Insurance Corporation]] (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit in a manner consistent with safe and sound operation (as per [[s:Community Reinvestment Act of 1977#Sec. 802.|Section&nbsp;802(b)]] and [[s:Community Reinvestment Act of 1977#Sec. 804.|Section&nbsp;804(1)]]) in all communities in which they are chartered to do business.<ref name="Federal Reserve"/> 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 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.<ref name="Bernanke8">{{cite web |title=Prepared Speech, Footnote #8, The CRA: Its Evolution and New Challenges |url=http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm#fn8 |work=Ben S. Bernanke, Chairman of the Federal Reserve System |page=Federal Reserve System (FRB)|publisher=before the Community Affairs Research Conference|date=2007-03-30}}</ref>

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 the institution.<ref name="Federal Reserve"/><ref name="Bernanke"/> 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.<ref name="St. Louis Fed"/><ref name="FFIEC">{{cite web|url=http://www.ffiec.gov/cra/history.htm|title=Community Reinvestment Act: Background & Purpose|publisher=FFIEC|access-date=2008-10-06}}</ref>

===Regulations===
The same banking agencies that are responsible for supervising depository institutions are also the agencies that conduct examinations for CRA compliance.<ref name="FBAdefinition">[https://www.law.cornell.edu/uscode/text/12/1813-#z The Federal Banking Agency as defined under 12 U.S.C. 1813(z)]</ref> These agencies are 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.<ref name="St. Louis Fed"/>

Implementation of the CRA by these financial supervisory agencies 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).<ref name="FFIECregs">[http://www.ffiec.gov/cra/regulation.htm FFIEC Links to Federal Agency's CRA Regulations]</ref>

{| class="wikitable" style="font-size:98%; margin: 1em auto; background:white; id:Table I"
|+ Table I. - Federal Agencies and the CRA's Corresponding CFR
! Federal Financial Supervisory Agency || Code of Federal Regulations || [[Code of Federal Regulations|''e''-CFR]] || Notes || [[#Regulatory changes 1995|1995]] || [[#Regulatory changes 2005|2005]]
|-
| Office of the Comptroller of the Currency (OCC)
| 12. C.F.R. Part 25. ''et seq''.
| <ref name="12CFR25">{{cite web|url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title12/12cfr25_main_02.tpl|title=Community Reinvestment Act and Interstate Deposit Production Regulations|work=Code of Federal Regulations, Title 12, Chapter I, Part 25|publisher=gpoaccess.gov|access-date=2009-04-16|archive-url=https://web.archive.org/web/20080605080140/http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=cd214ac86b0ac3af703925df92c035d0&tpl=%2Fecfrbrowse%2FTitle12%2F12cfr25_main_02.tpl|archive-date=2008-06-05|url-status=dead}}</ref>
| <ref name="OCC-CRA">{{cite web|url=http://www.occ.treas.gov/crainfo.htm|title=Community Reinvestment Act (CRA) Information|publisher=Office of the Comptroller of the Currency (OCC) |access-date=2009-04-16}}</ref>
| <ref name="FR22178">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=1995&federalRegister.page=22178&publication=FR|title=OCC Regulations (1995)|work=Federal Register - Vol. 60, No. 86|page=22178|date=1995-05-04|publisher=gpoaccess.gov|access-date=2009-04-16}}</ref>
| <ref name="OCC_2005-28">{{cite web|url=http://www.occ.gov/ftp/bulletin/2005-28.txt |title=Community Reinvestment Act Regulations (2005) for OCC|work=Press Release|date=2005-08-24 |publisher=OCC |access-date=2009-04-26}}</ref><ref name="FR44266">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=2005&federalRegister.page=44266&publication=FR|title=OCC Regulations (2005)|work=Federal Register - Vol. 70, No. 147|page=44266|date=2005-08-02|publisher=gpoaccess.gov|access-date=2009-04-26}}</ref>
|-
| rowspan=2 valign="top" | Federal Reserve System (FRB)
| 12. C.F.R. Part 228. ''et seq''.
| <ref name="12CFR228">{{cite web|url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title12/12cfr228_main_02.tpl|title=Community Reinvestment (Regulation BBP)|work=Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 228|publisher=gpoaccess.gov|access-date=2009-04-16|archive-url=https://web.archive.org/web/20090202173422/http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=635f26c4af3e2fe4327fd25ef4cb5638&tpl=%2Fecfrbrowse%2FTitle12%2F12cfr228_main_02.tpl|archive-date=2009-02-02|url-status=dead}}</ref>
| <ref name="FRB-CRA">{{cite web|url=http://www.federalreserve.gov/dcca/cra|title=Community Reinvestment Act|publisher=Federal Reserve Board|access-date=2009-04-16}}</ref>
| <ref name="FR22189">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=1995&federalRegister.page=22189&publication=FR|title=Federal Reserve Regulations (1995) pt. 1|work=Federal Register - Vol. 60, No. 86|page=22189|date=1995-05-04|publisher=gpoaccess.gov|access-date=2009-04-16}}</ref>
| <ref name="FR44267">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=2005&federalRegister.page=44267&publication=FR|title=Federal Reserve Regulations (2005)|work=Federal Register - Vol.70, No. 147|page=44267|date=2005-08-02 |publisher=gpoaccess.gov|access-date=2009-04-26}}</ref>
|-
| 12. C.F.R. Part 203. ''et seq''.
| <ref name="12CFR203">{{cite web|url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title12/12cfr203_main_02.tpl|title=Home Mortgage Disclosure (Regulation C)|work=Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 203|publisher=gpoaccess.gov|access-date=2009-04-16|archive-url=https://web.archive.org/web/20090202174002/http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=635f26c4af3e2fe4327fd25ef4cb5638&tpl=%2Fecfrbrowse%2FTitle12%2F12cfr203_main_02.tpl|archive-date=2009-02-02|url-status=dead}}</ref>
| <ref name="FRB-HMDA">{{cite web|url=http://www.ffiec.gov/hmda/history.htm|title=Home Mortgage Disclosure Act (HMDA) Information|publisher=Federal Financial Institutions Examination Council (FFIEC)|access-date=2009-04-16}}</ref>
| <ref name="FR22223">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=1995&federalRegister.page=22223&publication=FR|title=Federal Reserve Regulations (1995) pt. 2|work=Federal Register - Vol. 60, No. 86|page=22223|date=1995-05-04|publisher=gpoaccess.gov|access-date=2009-04-16}}</ref>
| 
|-
| Federal Deposit Insurance Corporation (FDIC)
| 12. C.F.R. Part 345. ''et seq''.
| <ref name="12CFR345">{{cite web|url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title12/12cfr345_main_02.tpl|title=Community Reinvestment ''(for the FDIC)''|work=Code of Federal Regulations, Title 12, Chapter III, Subchapter B, Part 345|publisher=gpoaccess.gov|access-date=2009-04-16|archive-url=https://web.archive.org/web/20100609173011/http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=074a9f4b779a90aa76481e4fe00fedbf&tpl=%2Fecfrbrowse%2FTitle12%2F12cfr345_main_02.tpl|archive-date=2010-06-09|url-status=dead}}</ref>
| <ref name="FDIC-CRA">{{cite web|url=http://www.fdic.gov/regulations/community/performance/index.html|title=Community Reinvestment Act (CRA) Background|publisher=Federal Deposit Insurance Corporation (FDIC)|access-date=2009-04-17}}</ref>
| <ref name="FR22201">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=1995&federalRegister.page=22201&publication=FR|title=FDIC Regulations (1995)|work=Federal Register - Vol. 60, No. 86|page=22201|date=1995-05-04|publisher=gpoaccess.gov|access-date=2009-04-16}}</ref>
| <ref name="FDIC_FIL-33-2006">{{cite web|url=http://www.fdic.gov/news/news/financial/2006/fil06033.html|title=Community Reinvestment Act Interagency Examination Procedures|publisher=Federal Deposit Insurance Corporation|date=2006-04-10|access-date=2009-04-26|archive-date=2009-05-13|archive-url=https://web.archive.org/web/20090513020057/http://www.fdic.gov/news/news/financial/2006/fil06033.html|url-status=dead}}</ref><ref name="FR44269">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=2005&federalRegister.page=44269&publication=FR|title=FDIC Regulations (2005)|work=Federal Register - Vol. 70, No. 147|page=44269|date=2005-08-02|publisher=gpoaccess.gov|access-date=2009-04-26}}</ref>
|}

The [[Federal Financial Institutions Examination Council]] (FFIEC) coordinates inter-agency information about the CRA.<ref name="FFIECregs"/><ref name="FFIECreporter">[http://www.ffiec.gov/cra/reporter.htm Federal financial supervisory agencies reporting CRA data to the FFIEC]</ref> Information about the CRA ratings of individual banking institutions from the three responsible agencies (Federal Reserve, FDIC, and OCC), is publicly available from the website of the FFIEC.<ref>[http://www.ffiec.gov/craratings/default.aspx FFIEC Interagency CRA Rating Search]</ref> These ratings were first made available by the Clinton administration to enable public participation and public comment on CRA performance.<ref name="PressBrief">{{cite web|title=White House Press Briefing on Community Reinvestment Act Reform Progress|url=http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html|date=1993-12-08|publisher=National Archives and Records Administration|work=Clinton Presidential Materials Project, White House Virtual Library|access-date=2009-04-17|archive-url=https://web.archive.org/web/20161219181923/https://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html|archive-date=2016-12-19|url-status=dead}}</ref>

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.<ref name="OIG_FDIC-2005">{{cite web|title=FDIC's Implementation of the 2005 Amendments to the Community Reinvestment Act Regulations|url=http://www.fdicig.gov/reports07/07-008-508.shtml|date=2007-04-23|publisher=FDIC Inspector General|work=Office of the Inspector General|access-date=2009-05-07|archive-url=https://web.archive.org/web/20090813110515/http://fdicig.gov/reports07/07-008-508.shtml|archive-date=2009-08-13|url-status=dead}}</ref>

==History==
{{Wikisource|Community Reinvestment Act of 1977}}
The original Act was passed by the [[95th United States Congress]] and signed into law by President [[Jimmy Carter]] on October 12, 1977 ({{USBill|95|H.R.|6655|pipe=Pub.L. 95-128}}, {{usctc|12|30}}).<ref>[http://thomas.loc.gov/cgi-bin/bdquery/z?d095:HR06655:@@@R H.R.6655: Housing and Community Development Act] {{Webarchive|url=https://web.archive.org/web/20200224060200/https://www.congress.gov/bill/95th-congress/house-bill/06655/actions |date=2020-02-24 }}, ''All Major Congressional Actions'', [[Library of Congress]], 1977-10-12</ref> The CRA was passed as a result of national pressure to address the deteriorating conditions of American cities—particularly lower-income and minority neighborhoods.<ref name="Bernanke"/>

Community activists, such as [[Gale Cincotta]] of [[National People's Action]] in Chicago, led the national fight to pass, and later to enforce the Act.<ref name="NYT:Cincotta">{{cite news|url=https://www.nytimes.com/2001/08/17/us/gale-cincotta-72-opponent-of-biased-banking-policies.html|title=Gale Cincotta, 72, Opponent Of Biased Banking Policies|last=Martin|first=Douglas|work=The New York Times|date=2001-08-17|access-date=2009-02-07}}</ref> Several legislative and regulatory revisions have since been enacted. {{Clarify|date=October 2014}}

===Original act===
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 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.<ref name="Braunstein"/><ref name="SandraThompson">[http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spfeb1308.html Prepared Testimony of Ms. Sandra L. Thompson], Director, Division of Supervision and Consumer Protection, FDIC, ''before the Committee on Financial Services'', ''U.S. House of Representatives'', February 13, 2008.</ref>

Before the Act was passed, there were severe shortages of credit available to low- and moderate-income neighborhoods. In their 1961 report, the [[U.S. Commission on Civil Rights]] found that African-American borrowers were often required to make higher [[downpayment]]s and adopt faster repayment schedules. The commission also documented blanket refusals to lend in particular areas ([[redlining]]).<ref name="civil-1961">
{{cite book|title= Report by the U.S. Commission on Civil Rights|publisher=United States Commission on Civil Rights|year=1961|url=http://www.law.umaryland.edu/marshall/usccr/documents/cr11961bk4.pdf|access-date=2008-10-06|volume=4}}</ref>

The allegations of "redlining" certain neighborhoods originated with the [[Federal Housing Administration]] in the 1930s. The "residential security maps" created by 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".<ref name="jackson">{{cite crabgrass}}</ref> 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.<ref name="Carter1978">{{cite web|url=http://www.presidency.ucsb.edu/ws/print.php?pid=30567|title=Role of Private Financial Institutions|work=National Urban Policy Message to Congress|publisher=The American Presidency Project, U. of C.|date=1978-03-27|page=President Carter|access-date=2009-04-19|archive-date=2016-03-03|archive-url=https://web.archive.org/web/20160303221748/http://www.presidency.ucsb.edu/ws/print.php?pid=30567|url-status=dead}}<blockquote>An effective urban strategy must involve private financial institutions. I am asking the independent financial regulatory agencies to develop appropriate actions, consistent with safe, sound and prudent lending practices, to encourage financial institutions to play a greater role in meeting the credit needs of their communities. First, I am requesting that financial regulatory agencies determine what further actions are necessary to halt the practice of redlining—the refusal to extend credit without a sound economic justification. I will encourage those agencies to develop strong, consistent and effective regulations to implement the Community Reinvestment Act</blockquote></ref><ref name="Braunstein"/><ref name="SandraThompson"/>

In Congressional debate on 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.<ref name="Bernanke"/><ref name="Braunstein"/> Community groups only slowly organized to take advantage of their right under the Act to complain about law enforcement of the regulations.<ref name="Schwartz">Schwartz, A., [http://www.innovations.harvard.edu/showdoc.html?id=3275 From confrontation to collaboration?] {{Webarchive|url=https://web.archive.org/web/20081206015637/http://www.innovations.harvard.edu/showdoc.html?id=3275 |date=2008-12-06 }}, ''Banks, community groups, and the implementation of community reinvestment agreements'', Fannie Mae Foundation, 3, pp. 631-662 (1998).</ref>

===Legislative revision history===
The hidden table below lists the [[Act of Congress|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.
{| class='wikitable collapsible collapsed' align="center" style="margin: 1em auto 1em auto; width:98%"
! [https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hcda1977 Housing and Community Development Act of 1977 &minus;&nbsp;Title&nbsp;VIII]<br/>[https://www.law.cornell.edu/uscode/html/uscode12/usc_sup_01_12_10_30.html USC Title 12 &minus; Chapter 30 &minus; Community&nbsp;Reinvestment]
|-
| <br/>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac801 SEC. 801].&nbsp;&nbsp;This title may be cited as the "Community Reinvestment Act of 1977"
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2901- 12. U.S.C. §&nbsp;2901&nbsp;→Note←&nbsp;]&nbsp;&nbsp;|&nbsp;&nbsp; *''short title citation found under section notes''
<blockquote>
[''Source'':&nbsp;&nbsp;Section 801 of title VIII of the Act of October 12, '''1977''' (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac802 SEC. 802].&nbsp;&nbsp;Congressional Findings and Statement of Purpose
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2901- 12 U.S.C. §&nbsp;2901]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2901- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 802 of title VIII of the Act of October 12, '''1977''' (Pub. L. No. 95–128; 91 Stat. 1147), effective October 12, 1977]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac803 SEC. 803].&nbsp;&nbsp;Definitions
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2902- 12. U.S.C. §&nbsp;2902]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2902- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 803 of title VIII of 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 the Act of July 21, '''2010''', (Pub. L. No. 111–203; 124 Stat. 1548), effective July 21, 2011]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac804 SEC. 804].&nbsp;&nbsp;Financial Institutions; Evaluation
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2903- 12. U.S.C. §&nbsp;2903]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2903- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;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 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]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac805 SEC. 805].&nbsp;&nbsp;Report to Congress
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2904- 12. U.S.C. §&nbsp;2904]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2904- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 805 of title VIII of the Act of October 12, '''1977''' (Pub. L. No. 95–128; 91 Stat. 1148), effective October 12, 1977]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac806 SEC. 806].&nbsp;&nbsp;Regulations
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2905- 12. U.S.C. §&nbsp;2905]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2905- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 806 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 358(2) of title III of the Act of July 21, '''2010''', (Pub. L. No. 111–203; 124 Stat. 1548), effective July 21, 2011]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac807 SEC. 807].&nbsp;&nbsp;Written Evaluations
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2906- 12. U.S.C. §&nbsp;2906]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2906- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;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 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]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac808 SEC. 808].&nbsp;&nbsp;Operation of Branch Facilities by Minorities and Women
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2907- 12. U.S.C. §&nbsp;2907]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2907- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 808 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 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]</blockquote>
[https://web.archive.org/web/20080916032800/http://www.fdic.gov/regulations/laws/rules/6500-2515.html#fdic6500hac809 SEC. 809].&nbsp;&nbsp;Small Bank Regulatory Relief
: ''Codified to'' [https://www.law.cornell.edu/uscode/text/12/2908- 12. U.S.C. §&nbsp;2908]&nbsp;&nbsp;|&nbsp;&nbsp;[https://www.law.cornell.edu/uscode/text/12/2908- notes]
<blockquote>
[''Source'':&nbsp;&nbsp;Section 809 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 712 of the Act of November 12, '''1999''' (Pub. L. No. 106–102; 113 Stat. 1469), effective November 12, 1999]</blockquote><br />
|-
|}

===Legislative changes 1989===
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 the [[savings and loan crisis]] of the 1980s. As part of the subsequent general reform of the banking industry, FIRREA added section 807 ([https://www.law.cornell.edu/uscode/text/12/2906- 12. U.S.C. §&nbsp;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 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 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.<ref name="Braunstein"/><ref name="Sec. 1212">{{USBill|101|H.R.|1278}} Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Title XII, Section 1212, [[101st Congress]].</ref>

According to [[Ben Bernanke]], this law greatly increased 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."<ref name="Bernanke"/>

===Legislative changes 1991===
Around the time of the introduction of the [[Federal Deposit Insurance Corporation Improvement Act of 1991]] (FDICIA), 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 ([https://www.law.cornell.edu/uscode/text/12/2906- 12. U.S.C. §&nbsp;2906]) was amended to require the inclusion of any examination data relevant in determining an institutions CRA rating as well.<ref name="Bernanke"/><ref name="Sec. 222">{{USBill|102|S.|543}}, Federal Deposit Insurance Corporation Improvement Act of 1991, Title II, Subtitle B, Section 222, [[102nd Congress]].</ref>

A week earlier that same December, 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 the addition of section 808 ([https://www.law.cornell.edu/uscode/text/12/2907- 12. U.S.C. §&nbsp;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, 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.<ref name="Sec. 402">{{USBill|102|H.R.|3435}}, Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991, Title IV, Section 402, [[102nd Congress]].</ref>

===Legislative changes 1992===
Although minor amendments were made directly to the Community Reinvestment Act concerning the [[s:Housing and Community Development Act of 1992/Title IX/Subtitle A#Sec. 909.|consideration of minority and female owned institutions & partnerships]] during evaluations first established in 1991, other portions of 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 enterprise]]s that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing.<ref name="Bernanke"/>

===Legislative changes 1994===
The [[Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994]], which repealed restrictions on interstate banking, listed the ''Community Reinvestment Act'' ratings received by the out-of-state bank as a consideration when determining whether to allow interstate branches.<ref name="FDIC-1994">[http://www.fdic.gov/regulations/laws/rules/6500-3500.html#6500rni109 FDIC page on Riegle-neal Interstate Banking and Branching Efficiency Act of 1994, SEC. 109.(c)(2)(D)]</ref><ref name="12USC1835a">{{cite web|url=https://www.law.cornell.edu/uscode/12/1835a.html#c_2_D|title=Prohibition against deposit production offices |work=US Code, Title 12, Chapter 16, § 1835a(c)(2)(D)|publisher=Legal Information Institute (LII), Cornell University Law School|access-date=2009-04-16}}</ref>

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 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.<ref name="Bernanke"/>

===Regulatory changes 1995===
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.<ref name="1993annoucement">{{cite press release|publisher=National Archives and Records Administration|url=http://clinton6.nara.gov/1993/07/1993-07-15-presidents-remarks-on-community-development.html|title=President's Remarks on Community Development|date=1993-07-15|work=Clinton Presidential Materials Project, White House Virtual Library|access-date=2009-04-17|archive-url=https://web.archive.org/web/20110608074710/http://clinton6.nara.gov/1993/07/1993-07-15-presidents-remarks-on-community-development.html|archive-date=2011-06-08|url-status=dead}}</ref>

[[Robert Rubin]], 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 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".<ref name="PressBrief"/>

By early 1995, the proposed CRA regulations were substantially revised to address criticisms that 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.<ref name="Clinton1995">{{cite web|title=President's Statement on Reform of Regulations Implementing the Community Reinvestment Act|url=http://www.gpo.gov/fdsys/granule/WCPD-1995-04-24/WCPD-1995-04-24-Pg662-2/content-detail.html|work=Weekly Compilation of Presidential Documents|pages=662–663|publisher=gpoaccess.gov|date=April 19, 1995}}</ref> The CRA examination process itself was reformed to incorporate the pending changes.<ref name="Braunstein"/> Information about banking institutions' CRA ratings was made available via web page for public review as well.<ref name="PressBrief"/> The Office of the [[Comptroller of 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.<ref name="EPA">{{cite web|url=http://www.epa.gov/brownfields/laws/other_bf_related_laws.htm#cra|title=Community Reinvestment Act (CRA) Fact Sheet|publisher=EPA|access-date=2008-10-06}}</ref>

During one of the Congressional hearings addressing 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 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''.<ref>William A. Niskanen, [http://www.cato.org/testimony/ct-ni3-8.html Repeal the Community Reinvestment Act], Testimony of William A. Niskanen, Chairman Cato Institute before the Subcommittee on Financial Institutions and Consumer Credit, Committee on Banking and Financial Services United States Senate, March 8, 1995.</ref>

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, 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 the existing CRA regulations in their entirety.<ref name="FR22156">{{cite web|url=http://www.gpo.gov/fdsys/search/citation.result.FR.action?federalRegister.volume=1995&federalRegister.page=22156&publication=FR |title=Community Reinvestment Act Regulations (1995)|work=Federal Register - Vol. 60, No. 86|pages=22155–22226|date=1995-05-04|publisher=GPO.gov|access-date=2009-04-16}}</ref> (See the notes in the "1995" column of [[#Regulations|Table I.]] for the specifics)

===Legislative changes 1999===
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 bank|investment]], [[commercial bank]]ing, and [[insurance]] services since its enactment in 1933. A similar bill was introduced in 1998 by [[United States Senate|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".<ref name="NHI-CRA">[https://web.archive.org/web/20010119073300/http://www.nhi.org/online/issues/108/cincotta.html The War on CRA: Opportunity in Next Wave of Mergers], nhi.org (1999); accessed October 18, 2014.</ref>

In the fall of 1999, Senators [[Christopher Dodd|Dodd]] and [[Charles E. Schumer|Schumer]] prevented another [[impasse]] by securing a compromise between Sen. Gramm and the Clinton Administration by agreeing to amend the ''Federal Deposit Insurance Act'' ({{usctc|12|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 [https://www.law.cornell.edu/uscode/text/12/2903-#c § 2903(c)] directly to Title 12, insured any bank holding institution wishing to be re-designated as 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.<ref>Stephen Labaton, [http://partners.nytimes.com/library/financial/102399banks-congress.html Issue in Depth: Leading Up to the Decision on Banking Reform], ''The Washington Post'', October 23, 1999.</ref>

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 the newly added section to Title 12, [https://www.law.cornell.edu/uscode/text/12/1831y- § 1831y (CRA Sunshine Requirements)], to satisfy Gramm's concerns.<ref>[http://banking.senate.gov/conf/craamd.htm Financial Services Modernization Act, Community Reinvestment Act Amendments in the Gramm-Leach Act] {{Webarchive|url=https://web.archive.org/web/20110728105131/http://banking.senate.gov/conf/craamd.htm |date=2011-07-28 }}, [[United States Senate Committee on Banking, Housing, and Urban Affairs]], 1999.</ref><ref>[http://www.federalreserve.gov/boarddocs/press/boardacts/2000/200012214/default.htm Supervisory Agencies Adopt Rule On Disclosure And Reporting Of CRA-Related Agreements], Federal Reserve System Joint Press Release, December 21, 2000.</ref>

In conjunction with the Gramm-Leach-Bliley Act changes, smaller banks would be reviewed less frequently for CRA compliance by the addition of [https://www.law.cornell.edu/uscode/text/12/2908-#a §2908. (Small Bank Regulatory Relief)] directly to {{usctc|12|30|pipe=Chapter 30}}, (the existing CRA laws), itself. The 1999 Act also mandated two studies to be conducted in connection with the "''Community Reinvestment Act''":<ref>[http://library.findlaw.com/1999/Nov/15/126633.html Gramm-Leach-Bliley Act Provisions Relating to CRA and Community Development], Findlaw.com, 1999-11-15</ref>
:* the first report by the Federal Reserve, to be delivered to Congress by March 15, 2000, is a comprehensive study of CRA to focus on default and delinquency rates, and the profitability of loans made in connection with CRA;<ref>[http://www.federalreserve.gov/boarddocs/surveys/craloansurvey/ Survey of the Performance and Profitability of CRA-Related Lending], September 19, 2002, FRB</ref>
:* the second report to be conducted by the Treasury Department over the next two years, is intended to determine the impact of the Act on the provision of services to low- and moderate-income neighborhoods and people, as intended by CRA.<ref>[http://www.treas.gov/press/releases/report3067.htm The Community Reinvestment Act After Financial Modernization: A Final Report] {{Webarchive|url=https://web.archive.org/web/20090426185447/http://www.treas.gov/press/releases/report3067.htm |date=2009-04-26 }}, January 15, 2001, Department of the Treasury website.</ref>

On signing the Gramm-Leach-Bliley Act, President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act".<ref name="statement">{{cite press release|first=Bill|last=Clinton|url=http://www.treasury.gov/press-center/press-releases/Pages/ls241.aspx|title=Statement by President Bill Clinton at the Signing of the Financial Modernization Bill|date=November 12, 1999|work=U.S. Treasury Department Office of Public Affairs|publisher=treasury.gov}}</ref>

===Regulatory changes 2005===
In 2002 there was an inter-agency review of the effectiveness of the 1995 regulatory changes to the Community Reinvestment Act and new proposals were considered.<ref name="Braunstein"/> In 2003, researchers at the Federal Reserve Bank of New York noted that dramatic changes in the financial services landscape had weakened the CRA, and that in 2003 less than 30 percent of all home purchase loans were subject to intensive review under the CRA.<ref name="Apgar">{{cite journal|first1=William C.|last1=Apgar|first2=Mark|last2=Duda|year=2003|title=The Twenty-Fifth Anniversary of the Community Reinvestment Act: Past Accomplishments and Future Regulatory Challenges|journal=FRBNY Economic Policy Review|publisher=Federal Reserve Bank of New York|issue=June 2003|url=http://www.newyorkfed.org/research/epr/03v09n2/0306apga.pdf}}</ref>

In early 2005, the [[Office of Thrift Supervision]] (OTS) implemented new rules that – among other changes – allowed thrifts with over $1 billion in assets to tweak the long-standing 50-25-25 CRA ratings thresholds by continuing to meet 50 percent of their overall CRA rating through lending activity as always but the other 50 percent could be any combination of lending, investment, and services that the thrift wanted. The obligations to adhere to 25 percent for services and 25 percent for investments became optional and the means to securing a satisfactory CRA rating was left to the discretion of the qualifying thrifts instead (See the notes in the "2005" column of [[#Regulations|Table I.]] for the specifics).{{clarify|date=September 2022}}<ref name="OTS_05-07">{{cite web|url=http://www.ots.treas.gov/index.cfm?p=PressReleases&ContentRecord_id=8ce21e92-1ae1-4895-8672-685d4e52a2ff&ContentType_id=4c12f337-b5b6-4c87-b45c-838958422bf3&Label_id=|title=OTS Announces Final CRA Rule|date=2005-02-28|publisher=Office of Thrift Supervision|access-date=2009-04-26}}</ref>

In April 2005, a contingent of Democratic [[Congressmen]] led by Representative [[Barney Frank]] issued a letter protesting these changes, saying they undercut the ability of the CRA to "meet the needs of low and moderate-income persons and communities".<ref name="CongressDemocrats">[http://financialservices.house.gov/pr04132005.html Press release and letter released by a contingent of "House Democrats"] {{webarchive|url=https://web.archive.org/web/20081211054306/http://financialservices.house.gov/pr04132005.html |date=2008-12-11 }}, April 13, 2005.</ref> The changes were also opposed by community groups concerned that it would weaken the CRA.<ref>[http://www.csrwire.com/PressRelease.php?id=3877 Saving CRA] {{Webarchive|url=https://web.archive.org/web/20081206042323/http://www.csrwire.com/PressRelease.php?id=3877 |date=2008-12-06 }}: ''Last-Minute Push Launched to Oppose FED, FDIC, and OCC Plans to Water Down Community Reinvestment Act Rules for 1,500 Banks'', [http://www.csrwire.com Corporate Social Responsibility News], May 5, 2005.</ref>

After enacting a technical regulatory amendment in the interim incorporating a different formula for stratifying both metropolitan and rural zones to better align with an expanded definition of them under the CRA in the process,<ref>[https://georgewbush-whitehouse.archives.gov/omb/bulletins/fy04/b04-03.html "Update of Statistical Area Definitions and Additional Guidance on Their Uses"] {{webarchive|url=https://web.archive.org/web/20111020223800/http://georgewbush-whitehouse.archives.gov/omb/bulletins/fy04/b04-03.html |date=2011-10-20 }}, OMB, March 17, 2004.</ref><ref name="FR15570">{{cite web|url=http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=15570&dbname=2005_register|title=Community Reinvestment Act Regulations (2005), Technical Amendment|work=Federal Register - Vol. 70, No. 58|pages=15570–15574|date=2005-03-28|publisher=GPO|access-date=2009-04-26}}</ref> the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) also put a new set of regulations into effect in September 2005 - mirroring much of what the OTS had already initiated earlier in the year (See the notes in the "2005" column of [[#Regulations|Table I]] for specifics).<ref name="FR44256">{{cite web|url=http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=44256&dbname=2005_register|title=Community Reinvestment Act Regulations (2005) for OCC, FRB & FDIC|work=Federal Register - Vol. 70, No. 147|pages=44256–44270|date=2005-08-02|publisher=GPO|access-date=2009-04-26}}</ref> These regulations also included less restrictive definitions of "small" and "intermediate small" banks.<ref name="OCC_2005-28"/> "Intermediate small banks" were defined as banks with assets of less than $1 billion but more than $250 million, which allowed these banks to opt for examination as either as a small bank or a large bank.<ref name="FDIC_FIL-33-2006"/> Currently banks with assets greater than $1.061 billion have their CRA performance evaluated according to lending, investment and service tests. The agencies use the Consumer Price Index to adjust the asset size thresholds for small and large institutions annually.<ref name="Braunstein"/>

===Regulatory changes 2007===
The Office of Thrift Supervision (OTS) proposed revising and started to solicit public comment regarding the complete alignment of its CRA rule with the CRA rules of the other three federal banking agencies in November 2006. The agency referenced several factors for the proposed realignment, in particular, that a consistent CRA standard applied to both the banking and the thrift industries would facilitate objective evaluations of CRA performance; ensure accurate assessments of banks and thrifts that operated in the same markets; and permit the public to make reasonable comparisons of bank and thrift CRA performance.<ref name="OTS_06-054">{{cite web|url=http://www.ots.treas.gov/index.cfm?p=PressReleases&ContentRecord_id=faaeee65-5320-4e4b-981e-cf105dbe88ba&ContentType_id=4c12f337-b5b6-4c87-b45c-838958422bf3&MonthDisplay=11&YearDisplay=2006|title=OTS Proposes CRA Alignment Rule|publisher=Office of Thrift Supervision|date=2006-11-24|access-date=2009-04-27}}</ref>

OTS Director at the time, John Reich announced the final decision to go ahead and implement the proposed revisions in four main areas of its existing ''Community Reinvestment Act'' (CRA) regulations to reestablish uniformity between its rules and those of the other federal banking agencies. Reaffirming the basis for the revised rules as first proposed, Reich stated, "OTS is making these revisions to promote consistency and facilitate objective evaluations of CRA performance across the banking and thrift industries. Consistent standards will allow the public to make more effective comparisons of bank and thrift CRA performance." He noted the changes reinforce CRA objectives consistent with thrifts' performance in meeting the financial services needs of their communities.<ref name="OTS_07-016">{{cite web|url=http://www.ots.treas.gov/index.cfm?p=PressReleases&ContentRecord_id=62be0663-52f9-4a3c-b5eb-c217780c00a0&ContentType_id=4c12f337-b5b6-4c87-b45c-838958422bf3&MonthDisplay=3&YearDisplay=2007|title=OTS Announces Final CRA Alignment Rule|publisher=Office of Thrift Supervision|date=2007-03-19|access-date=2009-04-27}}</ref>

This OTS rule revision aligned with that of the other agencies by:<ref name="FR13429">
{{cite web|url=http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=13429&dbname=2007_register|title=OTS Regulations (2007)|work=Federal Register - Vol. 72, No. 55|pages=13429–36|date=2007-03-22|publisher=gpoaccess.gov|access-date=2009-04-27}}</ref>
# eliminating the option of alternative weights for lending, investment, and service under the large, retail savings association test;
# defining institutions with assets between $250 million and $1 billion as "intermediate small savings associations" subject to a new community development test;
# indexing the asset threshold for "small" and "intermediate small" savings associations annually based on changes to the Consumer Price Index (CPI); and
# clarifying the adverse impact on a savings association's CRA rating where the OTS finds evidence of discrimination or other illegal credit practices.

These four changes generally mirror the ones made by the other three federal agencies in late [[#Regulatory changes 2005|2005]].{{citation needed|date=September 2015}} The agency noted that latitude would be provided for a short period of time to institutions in the context of examinations conducted after the effective date, July 1, 2007, in order to implement program changes under the new rule smoothly.{{citation needed|date=September 2015}}

===Legislative changes 2008===
With the passage of the [[Higher Education Opportunity Act]] into law, {{USPL|110|315}}, on August 14, 2008, each appropriate Federal financial supervisory agency shall now consider, as a factor in assessing and taking into account the record of a financial institution's CRA compliance, any & all low-cost education loans provided by the financial institution to low-income borrowers. All the affected Federal financial supervisory agencies have one year after the date of enactment to issue rules in final form to implement the change into the [[Code of Federal Regulations]] (CFR) according to [http://www.govtrack.us/congress/billtext.xpd?bill=h110-4137&version=enr&nid=t0%3Aenr%3A244 Title X, Subtitle C, Section 1031] of the Act.

===CRA reform proposals===
In 2007, [[Ben Bernanke]] suggested further increasing the presence of Fannie Mae and Freddie Mac in the affordable housing market to help banks fulfill their CRA obligations by providing them with more opportunities to securitize CRA-related loans.<ref>{{cite web|first=Ben S.|last=Bernanke|url=http://www.federalreserve.gov/newsevents/speech/Bernanke20070306a.htm|title=GSE Portfolios, Systemic Risk, and Affordable Housing; Speech before the Independent Community Bankers of America's Annual Convention and Techworld, Honolulu, Hawaii (via satellite)|date=March 6, 2007}}</ref>

On February 13, 2008, the [[United States House Committee on Financial Services]] held a hearing on the Community Reinvestment Act's impact on the provision of loans, investments and services to under-served communities and its effectiveness. There were 15 witnesses from government and the private sector.<ref name="30years"/>

On April 15, 2008, an FDIC official told the same committee that the FDIC was exploring offering incentives for banks to offer low-cost alternatives to [[payday loan]]s. Doing so would allow them favorable consideration under their Community Reinvestment Act responsibilities.  It had recently begun a two-year pilot project with an initial group of 31 banks.<ref>[http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spapr1508.html Prepared Statement of Robert W. Mooney], Deputy Director, Division of Supervision and Consumer Protection, FDIC; Federal Deposit Insurance Corporation on Financial Literacy and Education: The Effectiveness of Governmental and Private Sector Initiatives before the United States House Committee on Financial Services, April 15, 2008.</ref>

Congresswoman [[Eddie Bernice Johnson]] introduced new legislation, the {{USBill|111|H.R.|1479|pipe=''Community Reinvestment Modernization Act of 2009''}}, on March 12, 2009, to expand the scope of CRA to include [[non-bank financial institution]]s, such as [[credit union]]s.<ref name="CRA_2009">{{cite web|title=H.R. 1479: Community Reinvestment Modernization Act of 2009|url=http://www.govtrack.us/congress/bill.xpd?bill=h111-1479|work=111th Congress - First Session|publisher=GovTrack.us|date=2009-03-12}}</ref><ref>{{cite news|first=David|last=Michaels|url=http://www.dallasnews.com/sharedcontent/dws/bus/stories/031309dnbuscra.398777b.html|title=U.S. Rep. Eddie Bernice Johnson wants CRA expanded to non-banks|newspaper=Dallas Morning News|date=March 12, 2009}}</ref> There were other attempts to legislatively "modernize" the Community Reinvestment Act in previous sessions of Congress, such as in {{USBill|106|H.R.|4893|pipe=2000}} '''/''' {{USBill|107|H.R.|865|pipe=2001}} and {{USBill|110|H.R.|1289|pipe=2007}}, among others. The [[United States House Committee on Financial Services]] held hearings on September 16, 2009 on "Proposals to Modernize the Community Reinvestment Act" with 10 witnesses, including Johnson.<ref>{{cite conference|url=http://www.gpo.gov/fdsys/granule/CHRG-111hhrg54865/CHRG-111hhrg54865/content-detail.html|title=Proposals to Modernize the Community Reinvestment Act|date=September 16, 2009|publisher=GPO|work=U.S. House Committee on Financial Services|id=Serial No. 111-74}}</ref>  Another hearing was held on April 15, 2010 on "Perspectives and Proposals on the Community Reinvestment Act" with eight witnesses.<ref>{{cite conference|url=http://www.gpo.gov/fdsys/granule/CHRG-111hhrg57741/CHRG-111hhrg57741/content-detail.html|title=Perspectives and Proposals on the Community Reinvestment Act|date=April 15, 2010|publisher=GPO|work=U.S. House Committee on Financial Services|id=Serial No. 111-123}}</ref>

On June 24, 2010, the [[Office of the Comptroller of the Currency]] (OCC), [[Federal Reserve System]], [[Federal Deposit Insurance Corporation]] (FDIC), and the [[Office of Thrift Supervision]] (OTS) jointly published proposed revisions to the rules implementing the Community Reinvestment Act.<ref>{{cite web|url=http://www.fdic.gov/regulations/laws/federal/2010/10comAD60.html|title=Proposed Rule: Community Reinvestment Act Regulation Hearings|date=June 23, 2010|publisher=GPO|work=FDIC|id=12 CFR Part 345, RIN 3064-AD60}}</ref> These agencies, with the [[National Credit Union Administration]] (NCUA), make up the [[Federal Financial Institutions Examination Council]] (FFIEC), which coordinates regulation of financial institutions, including implementation of the Community Reinvestment Act. The proposed revisions to CRA rules are intended to revise the term "community development" to "include loans, investments and services that support, enable or facilitate projects or activities" that meet the criteria described in the [[Housing and Economic Recovery Act of 2008]] (HERA) and are conducted in designated target areas identified under the Neighborhood Stabilization Program established by HERA and the [[American Recovery and Reinvestment Act of 2009]] (ARRA). Among other things, this would expand the range of persons served to include middle-income households. {{citation needed|date=October 2014}}

In 2009, The Federal Reserve Banks of Boston and San Francisco published ''Revisiting the CRA: Perspectives on the Future of the Community Reinvestment Act'', which assembles views from a wide range of academic researchers, regulators, community development practitioners and financial service industry representatives on how to improve the CRA going forward. <ref>{{cite web|url=http://www.frbsf.org/community-development/publications/community-development-investment-review/2009/february/future-cra-community-reinvestment-act/|title=Revisiting the CRA: Perspectives on the Future of the Community Reinvestment Act - Volume 4, Issue 1|date=February 2009|work=Federal Reserve Banks of Boston and San Francisco}}</ref>

The Obama administration has increased scrutiny of the provision of credit to poor and African American neighborhoods. Lenders have come under investigation for not operating in such areas, whether they have halted service there or have never operated in them before.<ref>{{cite web|first=Clea|last=Benson|url=http://www.businessweek.com/magazine/content/11_20/b4228031594062.htm|archive-url=https://web.archive.org/web/20110513033308/http://www.businessweek.com/magazine/content/11_20/b4228031594062.htm|url-status=dead|archive-date=May 13, 2011|title=A Renewed Crackdown on Redlining|date=May 5, 2011|work=Business Week Magazine|publisher=Bloomberg.com}}</ref> Former ''[[The Atlantic|Atlantic]]'' associate editor Daniel Indiviglio attributes increasing noncompliance with the CRA to the tightening of lending requirements.<ref>{{cite web|first=David|last=Indiviglio|url=https://www.theatlantic.com/business/archive/2011/05/is-the-obama-administration-pressuring-banks-to-make-more-subprime-loans/238759|title=Is the Obama Administration Pressuring Banks to Make More Subprime Loans?|date=May 5, 2011|work=The Atlantic|publisher=Atlantic.com}}</ref>

In 2020, the OCC proposed a final rule<ref>{{Cite web |last=NCRC |date=2020-06-15 |title=Analysis of the OCC's Final CRA Rule » NCRC |url=https://ncrc.org/analysis-of-the-occs-final-cra-rule/ |access-date=2022-03-10 |language=en-US}}</ref> for CRA that was billed as an attempt to modernize the act to keep with changes in the financial sector, particularly the growth of digital banking. It did this unilaterally without support from the FDIC and the Federal Reserve.<ref>{{Cite web |last=NCRC |date=2020-05-20 |title=OCC Announces Final CRA Rule Changes, Moves Alone, Without FDIC or Federal Reserve » NCRC |url=https://ncrc.org/occ-announces-final-cra-rule-changes-moves-alone-without-fdic-or-federal-reserve/ |access-date=2022-03-10 |language=en-US}}</ref>

Community groups were also opposed to the 2020 proposal. Led by the National Community Reinvestment Coalition (NCRC),<ref>{{Cite web |last=NCRC |date=2020-04-09 |title=NCRC Submits Comment Letters on Proposed Changes to CRA » NCRC |url=https://ncrc.org/ncrc-submits-comment-letters-on-proposed-changes-to-cra/ |access-date=2022-03-10 |language=en-US}}</ref> 1,594 or 83% of the 1,922 unique comments submitted disagreed with the OCC’s rule; 674 of those comments cited NCRC or used some of the organization’s suggested language. An additional 10,000 comments from individuals, submitted through an online petition campaign, also supported NCRC’s point of view. 

Despite this opposition, the OCC published the final rule in 2020. Immediately after, NCRC and the California Reinvestment Coalition (CRC), represented by Democracy Forward and Farella Braun + Martel, filed a lawsuit seeking to vacate the OCC’s CRA rule,<ref>{{Cite web |last=NCRC |date=2020-06-25 |title=Community Reinvestment Groups Sue Trump Administration For Unlawfully Gutting Anti-Redlining Rules » NCRC |url=https://ncrc.org/community-reinvestment-groups-sue-trump-administration-for-unlawfully-gutting-anti-redlining-rules/ |access-date=2022-03-10 |language=en-US}}</ref> claiming that it violated the Administrative Procedure Act and was finalized without sufficient data to support the revisions. In February 2020, a federal judge rejected the OCC’s attempt to dismiss the lawsuit, a key hurdle in moving the claim forward.<ref>{{Cite web |last=NCRC |date=2021-02-01 |title=RULING: Federal Court Rejects Trump Admin's Effort to Evade Accountability for Unlawfully Gutting Anti-Redlining Protections » NCRC |url=https://ncrc.org/ruling-federal-court-rejects-trump-admins-effort-to-evade-accountability-for-unlawfully-gutting-anti-redlining-protections/ |access-date=2022-03-10 |language=en-US}}</ref> 

In January 2021, with the inauguration of President Joe Biden, the OCC went under new leadership, and on December 14, 2021, the OCC fully rescinded its 2020 CRA rule.<ref>{{Cite web |last=NCRC |date=2021-12-14 |title=NCRC Welcomes OCC Final Rule to Rescind its Disastrous 2020 CRA Rule » NCRC |url=https://ncrc.org/ncrc-welcomes-occ-final-rule-to-rescind-its-disastrous-2020-cra-rule/ |access-date=2022-03-10 |language=en-US}}</ref> 

Community groups submitted a position paper<ref>{{Cite web |date=2022-03-01 |title=Position Paper on CRA Reform » NCRC |url=https://www.ncrc.org/position-paper-on-cra-reform/ |access-date=2022-03-10 |language=en-US}}</ref> on March 1, 2022, to the OCC, FDIC and Federal Reserve about the key reforms they wanted to see. These included a consideration of race on CRA exams, more objective measures of performance that reduce ratings inflation, and expanded CRA assessment areas that include not only where banks have branches but also areas with significant amounts of bank lending and/or deposit activity. 

The groups also recommended that CRA be expanded to apply throughout the financial sector, beyond banks.<ref>{{Cite web |last=Silver |first=Josh |date=2020-08-17 |title=Why the Community Reinvestment Act should be expanded broadly across the financial industry » NCRC |url=https://www.ncrc.org/why-the-community-reinvestment-act-should-be-expanded-broadly-across-the-financial-industry/ |access-date=2022-03-10 |language=en-US}}</ref> This would require Congressional legislation, but there were precedents in state CRA laws<ref>{{Cite web |last=NCRC |date=2021-07-27 |title=Massachusetts CRA for Mortgage Companies: A Good Starting Point for Federal Policy » NCRC |url=https://ncrc.org/massachusetts-cra-for-mortgage-companies-a-good-starting-point-for-federal-policy/ |access-date=2022-03-10 |language=en-US}}</ref> that apply to mortgage companies and credit unions, not just banks.

New regulations with the support of consumer advocates were proposed in October 2023, that would count online loans to target demographics regardless of geographic location. These were the subject of a lawsuit by the American Bankers Association.<ref>{{cite news |url=https://www.npr.org/2024/02/15/1197961870/the-indicator-from-planet-money-anti-redlining-rule-lawsuit-02-15-2024 |title=Why banks are fighting changes to an anti-redlining program |date=February 15, 2024 |author1=Adrian Ma |author2=Darian Woods |author3=Corey Bridges |author4=Paddy Hirsch |author5=Kate Concannon |publisher=[[NPR]]}}</ref>

==Criticisms==
===Effectiveness===
The first major research study of CRA was the 1993 book ''Community Reinvestment Performance'' (1993, Probus Publishing) by Kenneth H. Thomas, Ph.D., a Finance Lecturer at The Wharton School of the University of Pennsylvania.  The main conclusion of the book, which was based on an analysis of the results of 6,706 CRA exams, was that the law was needed and it works but it must be improved, mainly through better and more objective enforcement to avoid "CRA Grade Inflation".  Many of the recommendations in that book were included in the 1995 CRA reform.  ''The CRA Handbook'' (1998, McGraw Hill) carefully examined over 1,500 CRA exams under the 1995 reforms and identified further CRA Grade Inflation and made specific recommendations to improve the law's effectiveness, primarily through more objective and quantifiable standards.

Some economists have questioned if the CRA was – or at least had become – irrelevant, because it was not needed to encourage banks to make profitable loans to a variety of borrowers.<ref>Jeffrey W. Gunther, [http://www.cato.org/pubs/regulation/regv23n3/gunther.pdf Should CRA Stand for "Community Redundancy Act"?] {{Webarchive|url=https://web.archive.org/web/20080913155406/https://www.cato.org/pubs/regulation/regv23n3/gunther.pdf |date=2008-09-13 }}, [[Cato Institute]]'s "Regulation Magazine", Fall 2000.</ref><ref>Jeffrey W. Gunther, Kelly Klemme, and Kenneth J. Robinson, [http://dallasfed.org/research/swe/1999/swe9903.html "Redlining or Red Herring?"] {{webarchive|url=https://web.archive.org/web/20081007072023/http://www.dallasfed.org/research/swe/1999/swe9903.html |date=2008-10-07 }}, [[Federal Reserve Bank of Dallas]], "Southwest Economy, May/June 1999, p. 8.</ref> In a 2003 research paper, economists at the Federal Reserve could not find clear evidence that the CRA increased lending and home ownership more in low income neighborhoods than in higher income ones.<ref name="Avery">Robert B. Avery, Paul S. Calem, Glenn B. Canner, [http://www.federalreserve.gov/communityaffairs/national/CA_Conf_SusCommDev/pdf/cannerglen.pdf The Effects of the Community Reinvestment Act on Local Communities], Division of Research and Statistics, Board of Governors of the Federal Reserve System, March 20, 2003.</ref> A 2008 [[Competitive Enterprise Institute]] study resulted in a similar finding.<ref name="Minton">Michelle Minton, [http://cei.org/studies-point/community-reinvestment-act%E2%80%99s-harmful-legacy The Community Reinvestment Act’s Harmful Legacy, How It Hampers Access to Credit], [[Competitive Enterprise Institute]], No. 132, March 20, 2008.</ref>

Former Federal Reserve chair [[Ben Bernanke]] has stated that an underlying assumption of the CRA – that more lending equals better outcomes for local communities – may not always be true, pointing to "recent problems in mortgage markets". However, he notes that at least in some instances, "the CRA has served as a catalyst, inducing banks to enter under-served markets that they might otherwise have ignored".<ref name="Bernanke"/>

The Woodstock Institute, a Chicago-based policy and advocacy nonprofit, found in an analysis of 1996 Chicago-area survey data that low income areas still lagged behind in access to commercial loans. Most small business loans made by CRA regulated banks went to higher income areas; 16.6% in low-income areas, 18.4% in low- and moderate-income tracts; 21.8% in middle-income areas and 23.1% in upper-income areas.<ref name="Woodstock">{{cite journal|last1=Immergluck|first1=Daniel|last2=Mullen|first2=Erin|date=1997-10-11|title=New Small Business Data Show Loans Going To Higher-Income Neighborhoods in Chicago Area|journal=Reinvestment Alert|publisher=Woodstock Institute|issue=11|url=http://www.woodstockinst.org/publications/download/reinvestment-alert-%2311%3a-new-small-business-data-show-loans-going-to-higher%11income-neighborhoods-in-chicago-area|access-date=2008-10-01|archive-url=https://web.archive.org/web/20081205173206/http://www.woodstockinst.org/publications/download/reinvestment-alert-%2311%3A-new-small-business-data-show-loans-going-to-higher%11income-neighborhoods-in-chicago-area/|archive-date=2008-12-05|url-status=dead}}</ref>

In a 1998 paper, Alex Schwartz of the Fannie Mae Foundation found that CRA agreements were "consistently successful in meeting their goals for mortgages, investments in low-income housing tax credits, grant giving to community-based organizations, and in opening (and keeping open) inner-city bank branches."<ref name="Schwartz"/> In a 2000 report for the US Treasury, several economists concluded that the CRA had the intended impact of improving access to credit for minority and low-to-moderate-income consumers.<ref name="Litan">{{cite web|url=http://www.treas.gov/press/releases/docs/crareport.pdf|title=The Community Reinvestment Act After Financial Modernization: A Baseline Report|first1=Robert E.|last1=Litan|first2=Nicolas P.|last2=Retsinas|first3=Eric S.|last3=Belsky|first4=Susan White|last4=Haag|year=2000|publisher=US Treasury|access-date=2008-10-12|archive-url=https://web.archive.org/web/20081015234647/http://www.treas.gov/press/releases/docs/crareport.pdf|archive-date=2008-10-15|url-status=dead}}</ref>

In a 2005 paper for the ''[[New York University Law Review]]'', [[Michael S. Barr]], professor at the [[University of Michigan Law School]], presented evidence to demonstrate that the CRA had overcome [[market failure]]s to increase access to credit for low-income, moderate-income, and minority borrowers at relatively low cost. He contends that the CRA is justified, has resulted in progress, and should be continued.<ref name="BarrNYU">{{cite journal|first=Michael S.|last=Barr|year=2005|title=Credit Where it Counts: The Community Reinvestment Act and Its Critics|journal=New York University Law Review|volume=80|page=513|ssrn=721661}}</ref>

Speaking to the February 2008 [[United States House Committee on Financial Services|Congressional Committee on Financial Services]] hearing on the CRA, Sandra L. Thompson, Director of the Division of Supervision and Consumer Protection at the FDIC, lauded the positive impact of CRA, noting that, "studies have pointed to increases in lending to low- and moderate-income customers and minorities in the decades since the CRA's passage." She cited a study by the Joint Center for Housing Studies at Harvard University, that found that "data for 1993 through 2000 show home purchase lending to low- and moderate-income people living in low- and moderate-income neighborhoods grew by 94 percent – more than in any of the other income categories".<ref name="SandraThompson"/>

In his statement before the same hearing, [[New York University]] economics professor Larry White stated that regulator efforts to "lean on" banks in vague and subjective ways to make loans is an "inappropriate instrument for achieving those goals". In a world of national banking enterprises, these policies are more likely to drive institutions out of neighborhoods. He stated that better ways to accomplish the goals would be vigorous enforcement of anti-discrimination laws, of antitrust laws to promote competition, and federal funding of worthy projects directly through an "on-budget and transparent process" like the [[Community Development Financial Institutions Fund]].<ref name="White02-13-08">{{cite web|first=Lawrence J.|last=White|url=http://www.gpo.gov/fdsys/granule/CHRG-110hhrg41181/CHRG-110hhrg41181/content-detail.html|title=Prepared Testimony of Lawrence J. White, Professor of Economics, New York University – Stern School of Business; Serial 110-90, Hearing on The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain|date=February 13, 2008|work=[[United States House Committee on Financial Services]]|publisher=GPO|at=pp. 35–37 in PDF; see also pp. 238–246}}</ref>

According to a 2012 study "credit markets enabled a substantial fraction of Hispanic families to live in neighbourhoods with fewer black families, even though a substantial fraction of black families were moving to more racially integrated areas. The net effect is that credit markets increased racial segregation".<ref>Amine Ouazad, Romain Rancière, [http://www.voxeu.org/index.php?q=node/7729 Did the mortgage credit boom contribute to the decline in US racial segregation?], VoxEU.org (2012); accessed September 22, 2015.</ref>

Politico has reported that the Community Reinvestment Act may sometimes push poor people out of their own neighborhoods by facilitating investment by outsiders.<ref>Diego Zuluaga, [https://www.politico.com/agenda/story/2019/07/24/gentrification-credit-discrimination-000937/ How a 40-year-old federal law is speeding gentrification], Politico (2019); accessed July 24, 2019.</ref>

===Sound practices and profitability===
According to a 2000 [[United States Department of the Treasury]] study of lending trends in 305 U.S. cities between 1993 and 1998, $467 billion in mortgage credit flowed from CRA-covered lenders to low- and medium-income borrowers and areas. In that period, the total number of loans to poorer Americans by CRA-eligible institutions rose by 39% while loans to wealthier individuals by CRA-covered institutions rose by 17%. The share of total US lending to low and medium income borrowers rose from 25% in 1993 to 28% in 1998 as a consequence.<ref name="baseline16-17">{{cite web|url=http://www.treas.gov/press/releases/docs/crareport.pdf|title=The Community Reinvestment Act After Financial Modernization: A Baseline Report|first1=Robert E.|last1=Litan|first2=Nicolas P.|last2=Retsinas|first3=Eric S.|last3=Belsky|first4=Susan White|last4=Haag|date=2000-04-19|publisher=U.S. Department of the Treasury|access-date=2008-10-12|pages=16–17|archive-url=https://web.archive.org/web/20081015234647/http://www.treas.gov/press/releases/docs/crareport.pdf|archive-date=2008-10-15|url-status=dead}}</ref>

Responding to concerns that the CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".<ref name="Canner">{{cite journal|first1=Glenn|last1=Canner|first2=Wayne|last2=Passmore|date=May 19, 1997|title=The CRA and the Profitability of Mortgage-Oriented Banks|journal=Finance and Economics Discussion Series|publisher=Board of Governors of the Federal Reserve System|issue=1997–7|url=http://econpapers.repec.org/paper/fipfedgfe/1997-7.htm|access-date=2008-10-01|id=RePEc:fip:fedgfe:1997-7|volume=19|page=496}}</ref>

Concerns at the time over the 1995 regulatory change causing an increase in the inability of financial institutions to expand through mergers or acquisition due to regulatory denial based on poor CRA compliance were unfounded. Over the 1993-97 period, one regulatory agency, the Federal Reserve Board, actually approved more applications than the average percentages of those without a detailed CRA review taking place. Of the 1,100 merger or acquisition cases the FRB reviewed on average per year where the relevant institutions were subject to CRA, only 70 instances on average were identified with potential CRA problems regardless of public opposition or internal reporting raising the concern. On average, 22 of these were ultimately identified as CRA compliance being the primary reason for both application withdrawal or FRB denial.<ref name="Gramlich1998">{{cite web|first=Edward M.|last=Gramlich|title=Examining Community Reinvestment; Prepared Speech, Governor|url=http://www.federalreserve.gov/boarddocs/speeches/1998/19981106.htm|publisher=Federal Reserve Board|date=1998-11-06}}</ref>

In October 1997, First Union Capital Markets and Bear, Stearns & Co launched the first publicly available [[Security (finance)|securitization]] of Community Reinvestment Act loans, issuing $384.6 million of such securities. The securities were guaranteed by Freddie Mac and had an implied "AAA" rating.<ref name="ABA">[http://findarticles.com/p/articles/mi_hb6632/is_200011/ai_n26424963?tag=rel.res1 Fannie Mae increases CRA options], [[American Bankers Association]] Banking Journal, November, 2000.</ref><ref>{{cite web|title=First Union Capital Markets Corp., Bear, Stearns & Co. Price Securities Offering Backed By Affordable Mortgages|url=http://sites.wachovia.com/corp_inst/page/printer/0,,14_981_1044%5E306,00.html|archive-url=https://archive.today/20120905001242/http://sites.wachovia.com/corp_inst/page/printer/0,,14_981_1044%5E306,00.html|url-status=dead|archive-date=2012-09-05|work=Press Releases|publisher=First Union Corporation (Wachovia)|date=1997-10-20}}</ref> The public offering was several times oversubscribed, predominantly by money managers and insurance companies who were not buying them for CRA credit.<ref name="Westhoff">{{cite journal|last=Westhoff|first=Dale|date=1998-05-01|title=Packaging CRA loans into securities|journal=Mortgage Banking|issue=May 1998|url=http://www.allbusiness.com/personal-finance/real-estate-mortgage-loans/677967-1.html }}</ref>

In October 2000, to expand the [[secondary market]] for affordable community-based mortgages and to increase liquidity for CRA-eligible loans, Fannie Mae committed to purchase and securitize $2 billion of "MyCommunityMortgage" loans.<ref name="CSRwire">[http://www.csrwire.com/PressRelease.php?id=482 Fannie Mae Announces Pilot to Purchase $2 Billion of ''MyCommunityMortgage'' Loans] {{webarchive|url=https://web.archive.org/web/20080930012225/http://www.csrwire.com/PressRelease.php?id=482 |date=2008-09-30 }}; ''Pilot Lenders to Customize Affordable Products For Low- and Moderate-Income Borrowers'', Corporate Social Responsibility Newswire, October 30, 2000.</ref><ref name="mcm-Fannie">[https://www.efanniemae.com/sf/mortgageproducts/mcm/index.jsp Fannie Mae ''MyCommunityMortgage'' homepage]</ref> In November 2000 Fannie Mae announced that the [[Department of Housing and Urban Development]] ("HUD") would soon require it to dedicate 50% of its business to low- and moderate-income families." It stated that since 1997 Fannie Mae had done nearly $7 billion in CRA business with depository institutions, but its goal was $20 billion.<ref name="ABA"/> In 2001 Fannie Mae announced that it had acquired $10 billion in specially-targeted Community Reinvestment Act (CRA) loans more than one and a half years ahead of schedule, and announced its goal to finance over $500 billion in CRA business by 2010, about one third of loans anticipated to be financed by Fannie Mae during that period.<ref>[http://findarticles.com/p/articles/mi_m0EIN/is_2001_May_7/ai_74223918/pg_1?tag=artBody;col1 Fannie Mae's Targeted Community Reinvestment Act Loan Volume Passes $10 Billion Mark]; "Expanded Purchasing Efforts Help Lenders Meet Both Market Needs and CRA Goals", ''Business Wire'', May 7, 2001.</ref>

Speaking in 2007, the 30th anniversary of the CRA, [[Ben Bernanke]], Chair of the [[Federal Reserve System]] since 2006, stated that the high costs of gathering information, "may have created a 'first-mover' problem, in which each financial institution has an incentive to let one of its competitors be the first to enter an underserved market". Bernanke notes that at least in some instances, "the CRA has served as a catalyst, inducing banks to enter underserved markets that they might otherwise have ignored". In the same 2007 speech, Bernanke also noted that, "managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable" and that the loans "usually did not involve disproportionately higher levels of default".<ref name="Bernanke"/>

===Housing advocacy groups===
CRA regulations give community groups the right to comment on or protest banks' purported non-compliance with CRA.<ref name="Ardalan"/> Such comments could help or hinder banks' planned expansions. Groups at first only slowly took advantage of these rights.<ref name="Schwartz"/> Regulatory changes during the [[Bill Clinton|Clinton]] administration allowed these community groups better access to CRA information and enabled them to increase their activities.<ref name="Bernanke"/><ref name="Braunstein">{{cite web|first=Sandra F.|last=Braunstein|url=http://www.federalreserve.gov/newsevents/testimony/braunstein20080213a.htm|title=Prepared Testimony of Ms. Sandra F. Braunstein, Director, Division of Consumer and Community Affairs, FRB; Serial 110-90, Hearing on The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain|date=February 13, 2008|work=[[United States House Committee on Financial Services]]|publisher=FRB}}</ref><ref name="Seidman">{{cite web|first=Ellen|last=Seidman|url=http://www.gpo.gov/fdsys/granule/CHRG-110hhrg41181/CHRG-110hhrg41181/content-detail.html|title=Prepared Testimony of Ms. Ellen Seidman, Director, Financial Services and Education Project, New America Foundation; Serial 110-90, Hearing on The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain|date=February 13, 2008|work=[[United States House Committee on Financial Services]]|publisher=GPO|at=pp. 29–31 in PDF; see also pp. 167–178}}</ref>

In an article for the ''[[New York Post]]'', economist Stan Liebowitz wrote that community activists' intervention at yearly bank reviews resulted in their obtaining large amounts of money from banks, since poor reviews could lead to frustrated merger plans and even legal challenges by the Justice Department.<ref name="Liebowitz">Stan Liebowtiz, [https://nypost.com/2008/02/05/the-real-scandal "The Real Scandal - How feds invited the mortgage mess"], ''[[New York Post]]'', February 5, 2008.</ref> Michelle Minton noted that [[Chase (bank)|Chase Manhattan]] and [[J.P. Morgan]] donated hundreds of thousands of dollars to [[Association of Community Organizations for Reform Now|ACORN]] around the same time they were to apply for permission to merge and needed to comply with CRA regulations.<ref name="Minton"/>

According to ''The New York Times'', some of these housing advocacy groups provided early warnings about the potential impact of lowered credit standards and the resulting unsupportable increase in real estate values they were causing in low to moderate income communities. Ballooning mortgages on rental properties threatened to require large rent increases from low and moderate income tenants that could ill afford them.<ref name="sickness">[https://www.nytimes.com/2008/10/04/nyregion/04about.html?em "A Sickness on Wall St., Played Out in the Bronx"], ''[[The New York Times]]'', October 3, 2008.</ref>

According to ''Inner City Press'', "Bronx-based Fair ''Finance Watch'' commented to the Federal Reserve about the practices of now-defunct non-bank subprime lender [[New Century]], when [[U.S. Bancorp]] bought warrants for 24% of New Century's stock. The Fed, rather than take any action on New Century, merely waited until U.S. Bancorp sold off some of the warrants, and then said the issue was moot." However, subprime loans were so profitable, that they were aggressively marketed in low-and moderate-income communities, even over the objections and warnings of housing advocacy groups like ACORN.<ref name="greed">[http://www.innercitypress.com/cra1bailout092808.html Subprime Stoked By Deregulation and Bipartisan Greed, not Community Reinvestment Act], ''Inner City Press'', September 28, 2008.</ref>

===Predatory lending===
In a 2002 study exploring the relationship between the CRA and lending looked at as predatory, Kathleen C. Engel and Patricia A. McCoy noted that banks could receive CRA credit by lending or brokering loans in lower-income areas that would be considered a risk for ordinary lending practices. CRA regulated banks may also inadvertently facilitate these lending practices by financing lenders. They noted that CRA regulations, as then administered and carried out by Fannie Mae and Freddie MAC, did not penalize banks that engaged in these lending practices. They recommended that the federal agencies use the CRA to sanction behavior that either directly or indirectly increased predatory lending practices by lowering the CRA rating of any bank that facilitated in these lending practices.<ref>Kathleen C. Engel and Patricia A. McCoy, [http://lsr.nellco.org/cgi/viewcontent.cgi?article=1029&context=uconn/ucwps The CRA Implications of Predatory Lending], Fordham Urban Law Journal, [http://law.fordham.edu/ihtml/page3g_nob.ihtml?imac=1264&pubID=400&articleid=1374 Volume XXIX, April 2002] {{Webarchive|url=https://web.archive.org/web/20081205232844/http://law.fordham.edu/ihtml/page3g_nob.ihtml?imac=1264&pubID=400&articleid=1374 |date=2008-12-05 }}.</ref>

The FDIC has tried to address this issue by "stopping abusive practices through the examination process and supervisory actions; encouraging banks to serve all members and areas of their communities fairly; and providing information and financial education to help consumers make informed choices". FDIC policy currently states that "predatory lending can have a negative effect on a bank's CRA performance."<ref>[http://www.fdic.gov/news/news/financial/2007/fil07006a.html Financial Institution Letters, FDIC's Supervisory Policy on Predatory Lending]; accessed September 23, 2014.</ref>

Competition also played a part in lending practices. In order to gain market share lenders lowered their standards.<ref>A Summary of the Primary Causes of the Housing Bubble and the Resulting Credit Crisis by Jeff Holt: https://www.uvu.edu/woodbury/docs/summaryoftheprimarycauseofthehousingbubble.pdf {{Webarchive|url=https://web.archive.org/web/20160818191341/http://www.uvu.edu/woodbury/docs/summaryoftheprimarycauseofthehousingbubble.pdf |date=2016-08-18 }}</ref>

===Relationship to the 2008 financial crisis===
{{See also|Subprime mortgage crisis|2008 financial crisis}}
Economist Stan Liebowitz wrote in the ''New York Post'' that a strengthening of the CRA in the 1990s encouraged a loosening of lending standards throughout the banking industry. He charged the Federal Reserve with ignoring the negative impact of the CRA.<ref name="Liebowitz"/>  According to [[Manhattan Institute for Policy Research|Manhattan Institute]] scholar Howard Husock, the CEO of a midsize bank reported that 20% of his institution's CRA-related mortgages were delinquent in their first year and probably 7% would end in foreclosure.<ref name="HusockIll">{{Cite web|first=Howard|last=Husock|url=http://www.city-journal.org/html/10_1_the_trillion_dollar.html|title=The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities|date=October 2009|work=City Journal.org|publisher=The Manhattan Institute|access-date=2012-12-26|archive-date=2012-05-27|archive-url=https://web.archive.org/web/20120527162907/http://www.city-journal.org/html/10_1_the_trillion_dollar.html|url-status=dead}}</ref>  In a commentary for [[CNN]], Congressman [[Ron Paul]], who serves on the [[United States House Committee on Financial Services]], charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks."<ref>{{cite news|url=http://www.cnn.com/2008/POLITICS/09/23/paul.bailout/index.html|title=Commentary: Bailouts will lead to rough economic ride|first=Ron|last=Paul|author-link=Ron Paul|work=CNN|date=September 23, 2008|access-date=2008-09-23}}</ref>  In a ''[[The Wall Street Journal]]'' opinion piece, economist [[Russell Roberts (economist)|Russell Roberts]] wrote that the CRA subsidized low-income housing by pressuring banks to serve poor borrowers and poor regions of the country.<ref>{{cite news|first=Russell|last=Roberts|author-link=Russell Roberts (economist)|url=https://www.wsj.com/articles/SB122298982558700341 |title=How Government Stoked the Mania|date=October 3, 2008|newspaper=[[The Wall Street Journal]]|access-date=March 3, 2015}}</ref>

Other economists have examined the issue and concluded that the CRA did not contribute to the [[2008 financial crisis]], notably economist [[Paul Krugman]],<ref name="krugman.blogs.nytimes.com">{{cite news|url=https://krugman.blogs.nytimes.com/2009/11/10/armey-of-ignorance|title=Armey of Ignorance|first=Paul|last=Krugman|author-link=Paul Krugman|work=The New York Times|date=November 10, 2009|access-date=2010-02-17}}</ref> Tim Westrich of the [[Center for American Progress]],<ref>{{cite web|first=Tim|last=Westrich|url=http://www.americanprogress.org/issues/2008/09/cra.html|title=Setting the Record Straight: Blame Conservatives, not CRA, for subprime mortgage mess|date=September 30, 2008|work=Center for American Progress|publisher=americanprogress.org|access-date=2008-10-14}}</ref> Robert Gordon of the [[American Prospect]],<ref>{{cite web|first=Robert|last=Gordon|url=http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis|title=Did Liberals Cause the Sub-Prime Crisis?|date=April 7, 2008|work=The American Prospect|publisher=prospect.org|access-date=2008-10-14|archive-url=https://web.archive.org/web/20120620034645/http://prospect.org/article/did-liberals-cause-sub-prime-crisis|archive-date=June 20, 2012|url-status=dead}}</ref> Ellen Seidman of the [[New America Foundation]],<ref>{{cite web|first=Ellen|last=Seidman|url=http://www.prospect.org/cs/articles?article=dont_blame_the_community_reinvestment_act|title=Don't Blame the Community Reinvestment Act|date=June 26, 2009|work=The American Prospect|publisher=prospect.org|access-date=2009-08-12|archive-url=https://web.archive.org/web/20100612172242/http://www.prospect.org/cs/articles?article=dont_blame_the_community_reinvestment_act|archive-date=June 12, 2010|url-status=dead}}</ref> [[Daniel Gross (journalist)|Daniel Gross]] of ''[[Slate (magazine)|Slate]]'',<ref>{{cite web|first=Daniel|last=Gross|url=http://www.slate.com/id/2201641/pagenum/all/%23page_start|title=Subprime Suspects|date=October 7, 2008|publisher=Slate.com}}</ref> [[Dean Baker]] of The [[Center for Economic and Policy Research|Center For Economic and Policy Research]],<ref>{{Cite news|url=http://cepr.net/blogs/beat-the-press/the-blame-the-community-reinvestment-act-industry|title=The Blame the Community Reinvestment Act Industry|last=Baker|first=Dean|date=6 Jan 2013|access-date=2018-02-15|language=en-US}}</ref> and Aaron Pressman from ''[[BusinessWeek]]''.<ref>{{cite web|first=Aaron|last=Pressman|url=http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html|archive-url=https://web.archive.org/web/20080930205133/http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html|url-status=dead|archive-date=September 30, 2008|title=Community Reinvestment Act had nothing to do with subprime crisis|date=September 29, 2008|work=BusinessWeek|publisher=www.businessweek.com|access-date=2008-10-14}}</ref> Law professor [[Michael Barr (Treasury official)|Michael S. Barr]], a Treasury Department official under President Clinton,<ref name="statement"/><ref>[http://www.brookings.edu/experts/b/barrm.aspx Description of Michael S. Barr, Nonresident Senior Fellow], [[Brookings Institution]]</ref> stated that approximately 50% of subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".<ref name="Barr">{{cite web|first=Michael S.|last=Barr|author-link=Michael Barr (Treasury official)|url=http://www.gpo.gov/fdsys/granule/CHRG-110hhrg41181/CHRG-110hhrg41181/content-detail.html|title=Prepared Testimony, Serial 110-90, Hearing on The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain|date=February 13, 2008|work=[[United States House Committee on Financial Services]]|publisher=GPO|at=pp. 37–39 in PDF; see also pp. 77–87}}</ref>

According to [[American Enterprise Institute]] fellow Edward Pinto, [[Bank of America]] reported in 2008 that its CRA portfolio, which constituted 7% of its owned residential mortgages, was responsible for 29 percent of its losses. He charged that "approximately 50 percent of CRA loans for single-family residences ... [had] characteristics that indicated high credit risk", yet, per the standards used by the various government agencies to evaluate CRA performance at the time, were not counted as "subprime" because borrower credit worthiness was not considered.<ref name="PintoToxic">{{Cite web|first=Edward|last=Pinto|url=http://www.city-journal.org/2009/19_4_snd-cra.html|title=Yes, the CRA is Toxic|date=August 2009|work=City Journal.org|publisher=The Manhattan Institute}}</ref><ref>{{cite book|first=Joseph|last=Fried|url=https://books.google.com/books?id=7fyWh8xYCyMC|title=Who Really Drove the Economy Into the Ditch?|chapter=Chapter 8|chapter-url=https://books.google.com/books?id=7fyWh8xYCyMC&pg=PA149|publisher=Algora Publishing|location=New York|year=2012|pages=149–150|isbn=9780875869421}}</ref><ref name="defchange1">{{cite web|url=http://www.fdic.gov/news/news/press/2001/pr0901a.html|title=Expanded Guidance for Subprime Lending Programs|date=January 31, 2001|work=Federal Deposit Insurance Corporation|publisher=FDIC.gov|access-date=December 18, 2013}}</ref><ref name="defchange2">{{cite web|url=http://www.fdic.gov/about/comein/background.html|title=Advisory Committee on Economic Inclusion (ComE-IN) Background Definitions|date=July 13, 2007|work=Federal Deposit Insurance Corporation|publisher=FDIC.gov|access-date=December 18, 2013}}<blockquote>Additionally, this guidance will generally not apply to: ... . and community development loans as defined in the CRA regulations that may have some higher risk characteristics, but are otherwise mitigated by guarantees from government programs, private credit enhancements, or other appropriate risk mitigation techniques.</blockquote></ref> Krugman argues that Pinto's category of "other high-risk mortgages" incorrectly includes loans that were not high-risk, that instead were like traditional conforming mortgages.<ref>{{cite news|url=https://krugman.blogs.nytimes.com/2011/05/21/origins-of-the-crisis-fake-and-real|title=Origins of the Crisis, Fake and Real|first=Paul|last=Krugman|author-link=Paul Krugman|work=The New York Times|date=May 21, 2011|access-date=2013-12-23}}</ref> Gene Epstein of [[Barron's (newspaper)|Barron's]] disputed Krugman's claims and those of the article he cited as erroneous and misleading.<ref>{{Cite web|url=http://www.barrons.com/articles/SB50001424053111904443004576349282596431872|title=Mortgage Debate: Why Labeling Matters}}</ref> Another CRA critic, Joseph Fried, concedes that "some of this CRA subprime lending might have taken place, even in the absence of CRA. For that reason, the direct impact of CRA on the volume of subprime lending is not certain."<ref>{{cite book|first=Joseph|last=Fried|url=https://books.google.com/books?id=7fyWh8xYCyMC|title=Who Really Drove the Economy Into the Ditch?|chapter=Chapter 8|chapter-url=https://books.google.com/books?id=7fyWh8xYCyMC&pg=PA150|publisher=Algora Publishing|location=New York|year=2012|page=150|isbn=9780875869421}}</ref> A study by the economists, Agarwal, Benmelich, and Bergman, found that banks undergoing CRA-related regulatory exams took additional mortgage lending risk.<ref>[https://www.nber.org/digest/may13/w18609.html NBER-Agarwal, Benmelich, Bergman, Seru-"Did the Community Reinvestment Act Lead to Risky Lending?"], nber.org; accessed September 22, 2014.</ref>

The [[Financial Crisis Inquiry Commission]] formed by the US Congress in 2009 to investigate the causes of the [[2008 financial crisis]], concluded "the CRA was not a significant factor in subprime lending or the crisis".<ref>{{cite web|url=http://www.gpo.gov/fdsys/pkg/GPO-FCIC/content-detail.html|title=The Financial Crisis Inquiry Report|date=February 25, 2011|work=National Commission on the Causes of the Financial and Economic Crisis in the United States|publisher=GPO|access-date=November 23, 2013}}</ref> [[Ben Bernanke]], then Chairman of the [[Federal Reserve]], wrote that experience and research contradict "the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties."<ref>{{cite web|first=Ben S.|last=Bernanke|author-link=Ben Bernanke|url=http://www.menendez.senate.gov/newsroom/press/fed-chairman-bernanke-confirms-to-menendez-that-community-reinvestment-act-is-not-to-blame-for-foreclosure-crisis|title=Fed Chairman Bernanke Confirms To Menendez That Community Reinvestment Act Is Not To Blame For Foreclosure Crisis|date=December 2, 2008|access-date=25 November 2013}}<blockquote>Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties.</blockquote></ref> Government economists and officials, including [[Janet Yellen]], then President and CEO of the Federal Reserve Bank of San Francisco,<ref name="Yellen3-31-08">{{cite web|first=Janet L.|last=Yellen|author-link=Janet Yellen|url=http://www.frbsf.org/our-district/press/presidents-speeches/yellen-speeches/2008/march/yellen-opening-remarks-national-interagency-community-reinvestment-conference-2008|title=Opening Remarks, 2008 National Interagency Community Reinvestment Conference|date=March 31, 2008|publisher=Federal Reserve Bank of San Francisco|access-date=October 28, 2013}}<blockquote>There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households.</blockquote></ref> FDIC Chair [[Sheila Bair]],<ref name="bair1208">{{cite web|first=Sheila|last=Bair|author-link=Sheila Bair|title=Prepared Remarks: ''Did Low-income Homeownership Go Too Far?'', FDIC Chairman|url=http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spdec1708.html|date=December 17, 2008|work=Conference before the New America Foundation|publisher=FDIC}}</ref> Comptroller of the Currency [[John C. Dugan]],<ref>{{cite web|first=John C.|last=Dugan|author-link=John C. Dugan|url=http://www.occ.gov/news-issuances/news-releases/2008/nr-occ-2008-136.html|title=Comptroller Dugan Says CRA Not Responsible for Subprime Lending Abuses|date=November 19, 2008|work=Remarks Before the Enterprise Annual Network Conference|publisher=Office of the Comptroller of the Currency}}</ref> and Federal Reserve Governor [[Randall Kroszner]],<ref>{{cite web|first=Randall|last=Kroszner|author-link=Randall Kroszner|url=http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm|title=The Community Reinvestment Act and the Recent Mortgage Crisis|date=December 3, 2008|work=Board of Governors of the Federal Reserve System|publisher=FRB}}</ref> also hold that the CRA did not significantly contribute to the subprime crisis. According to Yellen, former Chair of the Federal Reserve, independent mortgage companies made risky "higher-priced" loans at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the "higher-priced" loans that have contributed to the current crisis.<ref name="Yellen3-31-08"/><ref name="HDMA2006">{{cite journal|first1=Robert B.|last1=Avery|first2=Kenneth P.|last2=Brevoort|first3=Glenn B.|last3=Canner|url=http://www.federalreserve.gov/pubs/bulletin/2007/articles/hmda/default.htm#nl4|title=The 2006 HMDA Data|date=2007|journal=Federal Reserve Bulletin  |volume=93|issue=12|doi=10.17016/bulletin.2007.93-12|at=p. A89, Table 9.|access-date=February 5, 2009|doi-access=free}}<blockquote>According to the 2006 HMDA data, 19 percent of the conventional first lien mortgage loans originated by depository institutions were higher-priced, compared to 23 percent by bank subsidiaries, 38 percent by other bank affiliates, and more than 40 percent by independent mortgage companies.</blockquote></ref><ref name="CRA25th">{{cite journal|url=http://www.jchs.harvard.edu/research/publications/25th-anniversary-community-reinvestment-act-access-capital-evolving-financial|title=The 25th Anniversary of the Community Reinvestment Act: Access to Capital in an Evolving Financial Services System|date=March 1, 2002|journal=Joint Center for Housing Studies|publisher=Harvard University|location=Cambridge, MA|at=pp. iv–v (PDF)|access-date=November 5, 2008}}</ref> During a 2008 [[United States House Committee on Oversight and Government Reform|House Committee on Oversight and Government Reform]] hearing on the role of Fannie Mae and Freddie Mac in the [[2008 financial crisis]], including in relation to the Community Reinvestment Act, when asked if the CRA provided the "fuel" for increasing subprime loans, former Fannie Mae CEO [[Franklin Raines]] said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA.<ref name="Raines2008">{{cite web|first=Franklin D.|author-link=Franklin Raines|last=Raines|url=http://www.gpo.gov/fdsys/granule/CHRG-110hhrg50808/CHRG-110hhrg50808/content-detail.html|title=Prepared Testimony, Serial No. 110-180, Hearing on the Role of Fannie Mae and Freddie Mac in the Financial Crisis [of 2008]|date=December 9, 2012|work=[[United States House Committee on Oversight and Government Reform]]|publisher=GPO|at=p. 57 in PDF; see also pp. 102–103}}</ref>

In 2015, Federal Reserve Board economists Neil Bhutta and Daniel Ringo published a summary of available studies on the issue. They concluded that "CRA-related loans were a small fraction of the subprime market during the mortgage boom", and hence it was not a significant contributor to the [[2008 financial crisis]].<ref>{{Cite web|url=https://www.federalreserve.gov/econresdata/notes/feds-notes/2015/assessing-the-community-reinvestment-acts-role-in-the-financial-crisis-20150526.html|title=FRB: FEDS Notes: Assessing the Community Reinvestment Act's Role in the Financial Crisis|website=www.federalreserve.gov|access-date=2018-09-24}}</ref>

==See also==
* [[Fannie Mae]]
* [[Freddie Mac]] 
* [[Federal Housing Administration]]
* [[Housing and Community Development Act of 1987]]
* [[Housing and Community Development Act of 1992]]

==References==
'''Notes'''
{{Reflist|30em}}

==External links==
* [https://www.govinfo.gov/content/pkg/COMPS-258/uslm/COMPS-258.xml Community Reinvestment Act of 1977] as amended ([https://www.govinfo.gov/content/pkg/COMPS-258/pdf/COMPS-258.pdf PDF]/[https://www.govinfo.gov/app/details/COMPS-258/ details]) in the [[United States Government Publishing Office|GPO]] [https://www.govinfo.gov/help/comps Statute Compilations collection]
* [https://fraser.stlouisfed.org/title/housing-community-development-act-1977-community-reinvestment-act-1977-1027 Public Law 95-128, 95th Congress, H.R. 6655: Housing and Community Development Act of 1977 &#91;Community Reinvestment Act&#93;]
* [https://www.frbsf.org/community-development/publications/community-development-investment-review/2009/february/future-cra-community-reinvestment-act/ Revisiting the CRA: Perspectives & Policy Discussion on the Community Reinvestment Act], a joint publication by the Federal Reserve Banks of Boston and San Francisco, Federal Reserve System. Researchers, regulators, bankers, nonprofit practitioners, and community advocates contributing. Published: February 2009.
* [https://web.archive.org/web/20090430023055/http://financialservices.house.gov/hearing110/ht021308.shtml "The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain"], February 13, 2008. This hearing before the full House Committee on Financial Services examined the impact of CRA on the provision of loans, investments and services to under-served communities.  In addition to exploring CRA's success, the hearing hoped to examine challenges that prevent the law from being more effective for the future. '''|'''  [http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_house_hearings&docid=f:41181.pdf Printed Hearing: 110-90] (PDF).
* '''<u>Prepared Testimony, Member Statements & Transcripts</u>'''
** [https://www.federalreserve.gov/newsevents/testimony/braunstein20080213a.htm Prepared Statement by Sandra F. Braunstein], Director of the Division of Consumer and Community Affairs, Federal Reserve Board (FRB)
** [https://web.archive.org/web/20080507072313/http://www.occ.treas.gov/ftp/release/2008-15.htm Prepared Statement by Ann F. Jaedicke],{{Dead link|date=May 2022}} Deputy Comptroller for Compliance Policy, Office of the Comptroller of the Currency (OCC)
** [https://web.archive.org/web/20090117211039/http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spfeb1308.html Prepared Statement by Sandra L. Thompson],{{Dead link|date=May 2022}} Director of the Division of Supervision and Consumer Protection, Federal Deposit Insurance Corporation (FDIC)
** [https://web.archive.org/web/20090425063437/http://www.ots.treas.gov/index.cfm?p=Testimony&ContentType_id=c672eda0-239a-416b-8486-1b6fb2b73ba8&MonthDisplay=2&YearDisplay=2008 Prepared Statement by Montrice Godard Yakimov],{{Dead link|date=May 2022}} Managing Director of Compliance and Consumer Protection, Office of Thrift Supervision (OTS)
** [https://web.archive.org/web/20090502045115/http://financialservices.house.gov/hearing110/seidman021308.pdf Prepared Statement by Ellen Seidman] (PDF), Director of the Financial Services and Education Project, New America Foundation
** [https://web.archive.org/web/20090502044929/http://financialservices.house.gov/hearing110/white021308.pdf Prepared Statement of Lawrence J. White] (PDF), Professor of Economics, New York University – Stern School of Business
** [https://web.archive.org/web/20110203121215/http://financialservices.house.gov/hearing110/barr021308.pdf Prepared Statement by Michael S. Barr] (PDF), Professor, University of Michigan Law School
** [https://web.archive.org/web/20090502044923/http://financialservices.house.gov/hearing110/marchant021308.pdf Statement by Congressman Marchant] (PDF)
:
* [https://www.ffiec.gov/cra/craproducts.htm Federal Financial Institutions Examination Council] (FFIEC),  contains detailed information on the CRA and its implementing regulations, including CRA National Aggregate Reports for the years 1996 to 2009
* [https://web.archive.org/web/20000815202946/http://www.federalreserve.gov/boarddocs/surveys/craloansurvey/ Survey of the Performance and Profitability of CRA-Related Lending],{{Dead link|date=May 2022}} September 19, 2002. Section 713 of the ''Gramm-Leach-Bliley Act of 1999'' (Public Law 106-102) directs the Board of Governors of the Federal Reserve System to study and report to the Congress on the default rates, delinquency rates, and profitability of lending activities undertaken in conformance with the ''Community Reinvestment Act of 1977'' (CRA). The Board asked the 500 largest retail banking organizations to voluntarily complete a comprehensive survey focusing on their CRA-related lending activities and prepared a report summarizing survey responses. The Board was directed to make the report and supporting data available to the public (linked above).
* [https://www.govinfo.gov/content/pkg/FR-2004-08-18/pdf/04-18863.pdf Overview of the Community Reinvestment Act from the Federal Register].
* [https://www.govinfo.gov/content/pkg/PLAW-104publ29/pdf/PLAW-104publ29.pdf Truth in Lending Acts Amendments of 1995].
* George Benston, [https://www.cato.org/policy-analysis/community-reinvestment-act-looking-discrimination-isnt-there# The Community Reinvestment Act: Looking for Discrimination That Isn't There], [[Cato Institute]] Policy Analysis No. 354, October 6, 1999.
* Seidman, E., [https://www.thefreelibrary.com/CRA+in+the+21st+Century.-a063825220 "CRA in the 21st century"], originally published in ''Mortgage banking'', Washington, D.C., October 1, 1999.
* Steven A. Holmes, [https://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html Fannie Mae Eases Credit To Aid Mortgage Lending], ''[[The New York Times]]'', September 30, 1999.
* Luci Ellis, [https://www.bis.org/publ/work259.htm The housing meltdown: Why did it happen in the United States?] Working paper No. 259 for the [[Bank for International Settlements]], September 2008
* Traiger & Hinckley, LLP., [http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf  The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis], January 7, 2008
* [http://www.dollarsandsense.org/archives/1997/1197campen.html The Community Reinvestment Act] by economist Jim Campen, [[Dollars & Sense]], Nov/Dec 1997.
* [https://web.archive.org/web/20120627032943/http://www.newamerica.net/blog/asset-building/2008/no-larry-cra-didn-t-cause-sub-prime-mess-3210 CRA Didn’t Cause the Sub-Prime Mess]
* [https://web.archive.org/web/20081003075433/http://www.newamerica.net/blog/asset-building/2008/its-still-not-cra-7222 It's Still Not CRA], newamerica.net; accessed September 23, 2014.
* [https://www.wsj.com/articles/BL-REB-2405 "Fed's Kroszner: Don't Blame CRA"], wsj.com; accessed September 23, 2014.
* [https://www.democracynow.org/2010/8/12/gaming_the_system_study_details_how "Study Details How Big Banks Are Avoiding Lending Obligations Under Community Reinvestment Act"], video report by ''[[Democracy Now!]]'', August 12, 2010; accessed September 23, 2014.
* [https://sgp.fas.org/crs/misc/R43661.pdf "The Effectiveness of the Community Reinvestment Act"], fas.org; accessed September 23, 2014.

{{Federal Reserve System}}
{{Presidency of Jimmy Carter}}
{{Bank regulation in the United States}}
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[[Category:1977 in American law]]
[[Category:United States federal banking legislation]]
[[Category:United States housing bubble]]
[[Category:Mortgage industry of the United States]]
[[Category:Community development]]
[[Category:Urban economics]]
[[Category:Urban politics in the United States]]
[[Category:Anti-discrimination law in the United States]]
[[Category:United States federal housing legislation]]
[[Category:Redlining]]