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The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.
The Community Reinvestment Act was passed in 1977. Legislative intent behind the CRA was to incentivize the redevelopment of Brownfield properties. The Act was intended to force lenders to provide capital to the low and middle-income borrowers who lived proximally to Brownfield properties.
The goal was the return to a balance between the benefits of a state bank charter versus a federal bank charter. Among other notable changes, the Act stipulated that a federally chartered bank wishing to expand must first undergo a review of its Community Reinvestment Act compliance. [3] Congress approved the bill by September 14, 1994.
One study, by a legal firm which counsels financial services entities on Community Reinvestment Act compliance, found that CRA-covered institutions were less likely to make subprime loans (only 20–25% of all subprime loans), and when they did the interest rates were lower. The banks were half as likely to resell the loans to other parties. [114]
October: "Financial Services Modernization Act" killed in Senate because of no restrictions on Community Reinvestment Act-related community groups written into law [60] 1998–2008: Credit default swaps boom along with the products they insure; mortgage securities and CDO tranches. By November 2008, there are between $33 and $47 trillion CDS ...
The severe lacking in civil rights laws in combination with the economic impact led to the passing of the Community Reinvestment Act in 1977. Racial and economic redlining set the people who live in these communities up for failure from the start, so much so that banks would often deny people who came from these areas bank loans or offered them ...
“It’s a 50% penalty on that tax lien plus 15% annually,” he explained. “It’s a stiff penalty, and it’s designed to be such.” He added that the tax lien is now at more than $70,000.
Equal Credit Opportunity Act (1974) - Prohibited discrimination by creditors against applicants on the basis of race with respect to any aspect of a credit transaction; Community Reinvestment Act (1977) - limited redlining; Civil Rights Act of 1982 - Established uniform procedures for the enforcement by the Federal Government of civil rights ...