The Community Reinvestment Act (CRA) was enacted in 1977 to prevent redlining and to encourage banks and savings associations (collectively, banks) to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods and individuals.  Today, CRA and its implementing regulations require federal banking regulators to assess the record of each bank in fulfilling its obligation to the community and to consider that record in evaluating and approving applications for charters, bank mergers, acquisitions, and branch openings.

The Trump Administration has yet to unveil its proposed changes to the CRA.  Nonetheless, the Comptroller of the Currency Joseph Otting has already floated the idea of expanding activities to be taken into account for purposes of determining the meaning of a community development loan (e.g., taking into account small business loans, infrastructure lending and other forms of lending  that help revitalize struggling communities).  According to Secretary of the Treasury Steven Mnuchin, the purpose of such changes are “to make sure [CRA compliance] is absolutely going to help communities and isn’t just a check the box to satisfy regulators.”

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