What is the Community Reinvestment Act?

The Community Reinvestment Act (CRA) is a federal law passed in 1977 that requires financial institutions to meet the credit needs of the communities where they operate. The purpose of the law is to reduce financial discrimination in lending, particularly in low-income and minority communities. In Oklahoma, financial institutions must demonstrate that they are meeting the credit needs of all communities in their lending areas. This includes rural communities, low-income and minority communities, and other areas that may have been historically underserved. Financial institutions must comply with the CRA by developing lending and investment activities in their communities. This could include offering financial products and services at competitive rates, providing financial education and counseling, and engaging in community development activities. In addition, financial institutions must report their CRA activity to the Federal Financial Institutions Examination Council (FFIEC). The FFIEC then reviews the CRA reports and assesses the institution’s compliance with the law. The CRA has been successful in encouraging financial institutions to invest in their communities and reduce banking inequality. To further ensure the law’s effectiveness, Congress passed the Community Reinvestment Modernization Act of 2020, which has strengthened the CRA’s criteria and reporting requirements. This Act is designed to ensure financial institutions continue to invest in the communities they serve.

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What is the Community Reinvestment Act?

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