What is the Community Reinvestment Modernization Act?

The Community Reinvestment Modernization Act (CRMA) is a piece of banking legislation that was passed in Texas in 2019. It is intended to help promote economic development and reduce poverty in the state by providing financial services to traditionally underserved areas. The act aims to encourage banks to meet the needs of all communities in Texas, including those with lower-income households and those living in rural or underserved areas. It requires banks to provide services such as lending, credit, and investment in these areas. It also encourages banks to create opportunities to (1) build quality relationships with customers, (2) provide education about financial literacy and consumer protection, (3) reduce the burden of fees, and (4) promote innovation to create diversified products that can meet the needs of different customers. The CRMA also provides incentives for banks to invest in the development of these underserved markets. Through grants and tax credits, the act encourages banks to invest in real estate development, job training, and business assistance in these areas. In addition, the act establishes criteria for banks to follow in order to receive a “satisfactory” or “outstanding” rating for their level of community investment. These criteria include the amount of lending, investment, and other services they provide to low-income areas, as well as the magnitude of their investments in general. Overall, the Community Reinvestment Modernization Act helps to ensure that banks are providing services and investments to all communities in Texas, including those traditionally underserved. It also provides incentives to help reduce poverty and promote economic development in the state.

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What is the Community Reinvestment Modernization Act?

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