what is cra

The Community Reinvestment Act (CRA) is a federal law enacted in 1977 that 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. The CRA provides a framework for financial institutions, state and local governments, and community organizations to rebuild and revitalize communities through sound lending and good business judgment that benefits the banks and the communities. The CRA requires federal banking agencies to assess how well each institution fulfills its obligations to these communities, and the agencies must consider these performance ratings when evaluating applications for future approval of bank mergers, charters, acquisitions, branch openings, and deposit facilities. The three federal banking agencies responsible for the CRA are the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board (FRB), and the Office of the Comptroller of the Currency (OCC) .