Regulators Drop the Ball on CRA's Original Purpose

American Banker
3 minute read | December.28.2011

Federal regulators seem to be of two minds about the Community Reinvestment Act, a law with an explicit and limited congressional purpose of requiring each banking regulator "to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.

On the one hand, even though its congressional purpose makes no mention of proscribing lending discrimination based on race, ethnicity, sex, or other prohibited factors, the CRA has become an important tool for enforcing laws that do, like the Fair Housing and Equal Credit Opportunity Acts.

Published by American Banker.