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 "residential security maps" created by the Home Owners' Loan Corporation (HOLC) for the FHA were used by private and public entities for years afterwards to withhold mortgage capital from neighborhoods that were deemed "unsafe".

1469), effective November 12, 1999]The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) was enacted by the 101st Congress and signed into law by President George H. W. Bush in the wake of the savings and loan crisis of the 1980s.

The new language now required the appropriate Federal regulatory agency to prepare a written evaluation after completing the examination of an institution's record in meeting the credit needs of its entire community, including any low- and moderate-income neighborhoods within it.

The public section introduced a four-tiered CRA examination rating system with performance levels of 'Outstanding', 'Satisfactory', 'Needs to Improve', or 'Substantial Noncompliance', each supplemented with a written synopsis of the agencies' evaluation reasoning using any available facts to support their conclusions.

[43] Although minor amendments were made directly to the Community Reinvestment Act concerning the consideration of minority and female owned institutions & partnerships during evaluations first established in 1991, other portions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac, the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing.

[4] In July 1993, President Bill Clinton asked regulators to reform the CRA in order to make examinations more consistent, clarify performance standards, and reduce cost and compliance burden.

Bentsen said that the proposed changes would "make it easier for lenders to show how they're complying with the Community Reinvestment Act", and "cut back a lot of the paperwork and the cost on small business loans".

In response to the aggregate concerns recorded by then, the Federal financial supervisory agencies (the OCC, FRB, FDIC, and OTS) made further clarifications relating to definition, assessment, ratings and scope; sufficiently resolving many of the issues raised in the process.

[51] In the fall of 1999, Senators Dodd and Schumer prevented another impasse by securing a compromise between Sen. Gramm and the Clinton Administration by agreeing to amend the Federal Deposit Insurance Act (12 U.S.C.

[62] After enacting a technical regulatory amendment in the interim incorporating a different formula for stratifying both metropolitan and rural zones to better align with an expanded definition of them under the CRA in the process,[63][64] the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) also put a new set of regulations into effect in September 2005 - mirroring much of what the OTS had already initiated earlier in the year (See the notes in the "2005" column of Table I for specifics).

[66] OTS Director at the time, John Reich announced the final decision to go ahead and implement the proposed revisions in four main areas of its existing Community Reinvestment Act (CRA) regulations to reestablish uniformity between its rules and those of the other federal banking agencies.

[citation needed] The agency noted that latitude would be provided for a short period of time to institutions in the context of examinations conducted after the effective date, July 1, 2007, in order to implement program changes under the new rule smoothly.

In 2007, Ben Bernanke suggested further increasing the presence of Fannie Mae and Freddie Mac in the affordable housing market to help banks fulfill their CRA obligations by providing them with more opportunities to securitize CRA-related loans.

[70] Congresswoman Eddie Bernice Johnson introduced new legislation, the Community Reinvestment Modernization Act of 2009, on March 12, 2009, to expand the scope of CRA to include non-bank financial institutions, such as credit unions.

The United States House Committee on Financial Services held hearings on September 16, 2009 on "Proposals to Modernize the Community Reinvestment Act" with 10 witnesses, including Johnson.

The proposed revisions to CRA rules are intended to revise the term "community development" to "include loans, investments and services that support, enable or facilitate projects or activities" that meet the criteria described in the Housing and Economic Recovery Act of 2008 (HERA) and are conducted in designated target areas identified under the Neighborhood Stabilization Program established by HERA and the American Recovery and Reinvestment Act of 2009 (ARRA).

Immediately after, NCRC and the California Reinvestment Coalition (CRC), represented by Democracy Forward and Farella Braun + Martel, filed a lawsuit seeking to vacate the OCC’s CRA rule,[82] claiming that it violated the Administrative Procedure Act and was finalized without sufficient data to support the revisions.

[88] The first major research study of CRA was the 1993 book Community Reinvestment Performance (1993, Probus Publishing) by Kenneth H. Thomas, Ph.D., a Finance Lecturer at The Wharton School of the University of Pennsylvania.

[92] Former Federal Reserve chair Ben Bernanke has stated that an underlying assumption of the CRA – that more lending equals better outcomes for local communities – may not always be true, pointing to "recent problems in mortgage markets".

[4] The Woodstock Institute, a Chicago-based policy and advocacy nonprofit, found in an analysis of 1996 Chicago-area survey data that low income areas still lagged behind in access to commercial loans.

[36] In his statement before the same hearing, New York University economics professor Larry White stated that regulator efforts to "lean on" banks in vague and subjective ways to make loans is an "inappropriate instrument for achieving those goals".

[98] According to a 2000 United States Department of the Treasury study of lending trends in 305 U.S. cities between 1993 and 1998, $467 billion in mortgage credit flowed from CRA-covered lenders to low- and medium-income borrowers and areas.

[101] In October 1997, First Union Capital Markets and Bear, Stearns & Co launched the first publicly available securitization of Community Reinvestment Act loans, issuing $384.6 million of such securities.

[107] Speaking in 2007, the 30th anniversary of the CRA, Ben Bernanke, Chair of the Federal Reserve System since 2006, stated that the high costs of gathering information, "may have created a 'first-mover' problem, in which each financial institution has an incentive to let one of its competitors be the first to enter an underserved market".

[109] Michelle Minton noted that Chase Manhattan and J.P. Morgan donated hundreds of thousands of dollars to ACORN around the same time they were to apply for permission to merge and needed to comply with CRA regulations.

[92] According to The New York Times, some of these housing advocacy groups provided early warnings about the potential impact of lowered credit standards and the resulting unsupportable increase in real estate values they were causing in low to moderate income communities.

[115] In a commentary for CNN, Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks.

[126] According to American Enterprise Institute fellow Edward Pinto, Bank of America reported in 2008 that its CRA portfolio, which constituted 7% of its owned residential mortgages, was responsible for 29 percent of its losses.

[135] Ben Bernanke, then Chairman of the Federal Reserve, wrote that experience and research contradict "the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties.