What is the Community Reinvestment Modernization Act?

The Community Reinvestment Modernization Act (CRMA) is a law passed in California which is designed to encourage banks and other financial institutions to serve the banking needs of all communities, regardless of their income levels. This law was enacted in response to the dramatic increase of predatory lending practices that disproportionately impacted low-income and minority communities. The CRMA requires that financial institutions lend to creditworthy borrowers in their physical communities, including rural and low-income areas, by establishing a uniform fair lending policy. It also requires financial institutions to provide loan and deposit services to all communities, regardless of where they are located. The CRMA encourages financial institutions to invest in their communities by investing in local businesses, providing support for housing development and public service projects, and by offering low-cost deposit services, such as savings accounts for those without access to mainstream banking products. The CRMA also encourages banks and other financial institutions to extend credit to those in need, by providing loan products that are tailored to those who have difficulty in accessing traditional banking products. This includes providing incentives for banks to offer credit products to people with little or no credit history, as well as those who have difficulty in obtaining loans due to their lower income. By doing so, the CRMA helps foster a more equitable access to credit and banking services.

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What is the Community Reinvestment Modernization Act?

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