What was the impact of the Community Reinvestment Act on Fannie Mae?
What was the impact of the Community Reinvestment Act on Fannie Mae?
In a 1998 paper, Alex Schwartz of the Fannie Mae Foundation found that CRA agreements were “consistently successful in meeting their goals for mortgages, investments in low-income housing tax credits, grant giving to community-based organizations, and in opening (and keeping open) inner-city bank branches.” In a 2000 …
What is the significance of the Community Reinvestment Act of 1977?
The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
What regulation is the Community Reinvestment Act?
The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 195, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
What happens if regulatory find that a state chartered bank is not in compliance with the CRA?
When the regulators deem that a bank fails to comply with the CRA, they can give the institution a less-than-Satisfactory grade on its exam or even delay or deny its application. The broad discretion granted the regulators has meant they must often accommodate conflicting demands.
Did the Community Reinvestment Act cause the financial crisis?
If the CRA did contribute to the financial crisis, it was small. An MIT study found that banks increased their risky lending by about 5 percent in the quarters leading up to the CRA inspections. These loans defaulted 15 percent more frequently. This was more likely to happen in the “greenlined” areas.
Who regulates CRA requirements?
Three federal regulators—the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve System—share an oversight role with respect to the CRA.
What regulation serves the needs of the community?
Congress enacted the Community Reinvestment Act (CRA) in 1977 to encourage banks and thrift institutions to “serve the convenience and needs of the communities in which they are chartered to do business,” including low- and moderate-income (LMI) communities, and to do so in a manner “consistent with the safe and sound …
Does the Community Reinvestment Act work?
Other studies find that the CRA has been effective in encouraging financial institutions to lend to redlined neighborhoods. Several analyses conclude that the CRA had a positive influence in encouraging lending to low- and moderate-income borrowers and in low- and moderate-income neighborhoods.
How do you get money from CRA?
The only way to get your benefits and credits, including the one-time additional GST/HST credit payment, is by filing your 2018 tax return.
What is the purpose of the Community Reinvestment Act?
Community Reinvestment Act. The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It was enacted by the Congress in 1977 (12 U.S.C.
What is Community Reinvestment Act?
The Community Reinvestment Act of 1977 (CRA) provides a framework for financial institutions, state and local governments, and community organizations to jointly promote banking services to all members of a community. In a nutshell, the CRA.
Why was the Community Reinvestment Act established?
The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low- and moderate-income neighborhoods . The CRA requires federal regulators to assess how well each bank fulfills its obligations to these communities.
What is a regulation BB?
What is ‘Regulation BB’. Regulation BB is a regulation that requires banks to provide certain information to the public. Regulation BB mandates that banks must disclose to the public which communities they will serve and the type of credit that they are willing to extend there.
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