Why is the Community Reinvestment Act important? The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
What was the Community Reinvestment Act and why was it important? In 1977, Congress enacted the Community Reinvestment Act (CRA), which required federal financial regulatory agencies to encourage regulated financial institutions to help meet the credit needs of their local communities, including low- to moderate-income neighborhoods.
Why was the Community Reinvestment Act established? The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low- and moderate-income neighborhoods.
The CRA requires federal regulators to assess how well each bank fulfills its obligations to these communities.
How did the Community Reinvestment Act affect the US economy? The Community Reinvestment Act encourages bank lending to low- and moderate-income neighborhoods.
Enacted in 1977, it sought to eliminate bank “redlining” of poor neighborhoods.
That had contributed to the growth of ghettos in the 1970s.
In redlining, neighborhoods were designated as not good for investment.
Why is the Community Reinvestment Act important? – Related Questions
Is the Community Reinvestment Act effective?
Other studies find that the CRA has been effective in encouraging financial institutions to lend to redlined neighborhoods.
Several analyses conclude that the CRA had a positive influence in encouraging lending to low- and moderate-income borrowers and in low- and moderate-income neighborhoods.
What was the purpose of the Community Reinvestment Act quizlet?
Is intended to ENCOURAGE depository institutions to help meet the credit needs of the communities in which they operate, including LOW- and MODERATE-INCOME NEIGHBORHOODS, consistent with safe and sound banking operations.
Why do banks complain about the Community Reinvestment Act?
Under the Community Reinvestment Act, or CRA, regulators periodically examine banks’ lending practices for low- and moderate-income borrowers.
Banks have complained that they are judged too subjectively and don’t often know what types of activities would qualify for credit under the law.
Who started the Community Reinvestment Act?
President Jimmy Carter
The original Act was passed by the 95th United States Congress and signed into law by President Jimmy Carter on (Pub.
L.
95-128, 12 U.
S.
C.
ch.
Why was the Community Reinvestment Act of 1977 initially considered successful?
What is federal Community Reinvestment Act?
The Community Reinvestment Act (CRA) was.
enacted in 1977 to prevent redlining.
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and to.
encourage banks and savings associations (collectively, banks) to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods and individuals.
What has been the lasting impact of the Community Reinvestment Act?
What types of loans are CRA reportable?
What are CRA ratings?
Upon completion of a CRA examination, an overall CRA Rating is assigned using a four-tiered rating system.
These ratings are: Outstanding, Satisfactory, Needs to Improve, and Substantial Noncompliance.
What are the four C’s of credit?
Credit History. Capacity. Capital.
What was the purpose of the Community Reinvestment Act of 1977?
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations.
It was enacted by the Congress in 1977 (12 U.
S.
C.
Are credit unions subject to Community Reinvestment Act?
The CRA is intended to encourage for-profit banks to meet the needs of borrowers in their communities, including in low- and moderate-income neighborhoods.
Credit unions’ consumer-focused model is self-regulating, and that is why credit unions are not covered by CRA.
What type of information is found in the CRA Public File?
The contents of the public file for covered financial institutions include both point-in-time (CRA evaluations) and ongoing information to help the public understand the bank’s capacity and ability to serve assessment area communities through its lending and, as applicable, community development activities.
Who develops a CRA strategic plan?
In lieu of one of the three primary evaluation methods, the CRA regulations provide banks the option to develop a strategic plan with the input of the community. Strategic plans allow banks to tailor their performance goals to the needs of their community by working directly with the community to develop the goals.
What was the Iran hostage crisis quizlet?
Iranian militants (citizens with guns) stormed the U.S. Embassy in tehran and took approximately 70 Americans captive. This was a terrorist act which triggered the most serious crisis of the Carter Presidency and began a struggle/problem for Jimmy Carter and the American people that lasted 444 days.
How often do federal examiners perform CRA evaluations?
every 48 months
Institutions with aggregate assets of $250 million or less and a “Satisfactory” CRA rating are subject to a CRA examination no more than once every 48 months.
Why do bankers probably have more favorable attitudes toward the Truth in Lending Act than the Community Reinvestment Act?
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