Ad
related to: community reinvestment act penalties for federal
Search results
Results From The WOW.Com Content Network
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 Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s. It established the Resolution Trust Corporation to close hundreds of insolvent thrifts and provided funds to pay out insurance to their depositors.
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.
1981: Each of the 12 Federal Reserve banks establishes a Community Affairs Office to offer public and private guidance in accordance with the Community Reinvestment Act. [18] [19] 1981: Salomon Brothers transitions from a private partnership to a public corporation, the first of the Wall St. investment banks to do so. This shifts the risk of ...
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]
Regarding the Community Reinvestment Act (CRA), 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 also charged the Federal Reserve with ignoring the negative impact of the CRA. [28]
“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.
The Community Reinvestment Act of 1977 requires insured depository institutions to reinvest in the communities they serve. There should be an emphasis on low-income and moderate-income (LMI) census tracts and individuals.