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Community Reinvestment Act

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The original purpose and intent of the Community Reinvestment Act, to assess an institution's record of helping to meet the credit needs of the local communities in which it is chartered, is often lost. Furthermore, this statutory obligation has been limited to banks even though competing depository institutions and non-bank financial institutions compete with banks without being required to meet similar expectations for serving their communities.

ABA Position

ABA will continue to work with Congress and regulators so that the original purpose and intent of the Community Reinvestment Act (CRA) is not lost in its implementation. ABA also will continue to urge regulators to review CRA rules to place performance over process, promote consistency in evaluations, provide flexibility in the examination process, and eliminate unnecessary burdens. At the same time, regulatory expectations must be clear and consistent. Overall, greater rationality is needed to ensure the CRA can meet the goals Congress set forth when the statute was adopted nearly 40 years ago. 

ABA believes that the following areas should be emphasized:

  • Incentives and encouragement for all institutions to achieve higher ratings are needed;
  • Better training for examiners to ensure rigid application of requirements do not defeat the purpose of CRA;
  • Greater clarity on acceptable community development activities is needed;
  • Unnecessary and burdensome recordkeeping requirements for all institutions should be eliminated;
  • Alternative delivery systems and the role of technology in the fulfillment of CRA must be recognized;
  • Greater emphasis and favorable consideration for optional out-of-assessment-area financial services is needed; and
  • Provision should be made for banks facing difficulty obtaining necessary CRA credit as a result of abnormal competition for CRA credits in their assessment areas.

Credit unions, which receive significant government benefits to serve low- and moderate-income people, should be required to demonstrate through measurable standards that they are meeting their service obligations.


ABA members are committed to making credit available to the communities in which they operate. It is hard to imagine a bank succeeding unless it serves its local community. However, in striving to meet regulatory tests and processes to achieve this goal, new technologies, delivery systems, and methods of operation continue to present challenges for institutions and regulators alike. ABA believes that the regulatory requirements should be clear, straightforward and easily applied. ABA also believes the agencies have placed too much emphasis on services just in low- and moderate-income (LMI) neighborhoods or just to LMI residents rather than looking at the services to the entire community as required by the actual text of the statute. One improvement would be providing CRA credit for financial education for the whole community, not just the LMI segment of the community.




Contact for further information: Rob Rowe (202) 663-5029.