Law Commons^™

The Community Reinvestment Act: Guilty, But Not As Charged, Raymond H. Brescia

Raymond H Brescia

Since its passage in 1977, the Community Reinvestment Act (CRA) has charged federal bank regulators with "encourag[ing]" certain financial institutions "to help meet the credit needs of the local communities in which they are chartered consistent with [] safe and sound” banking practices. Even before the CRA became law—and ever since—it has become a flashpoint. Depending on your perspective, this simple and somewhat soft directive has led some to charge that it imposes unfair burdens on financial institutions and helped to fuel the subprime mortgage crisis of 2007 and the financial crisis that followed. According to this argument, the CRA …