The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, 12 U.S.C. § 2901 et seq.) 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. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
The Act instructs the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.)
This summary is from Wikipedia.
The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.
9/26/1977--Conference report filed in House.
(Conference report filed in House, H. Rept. 95-634) Housing and Community Development Act - =Title I: Community Development= - Amends the Housing and Community Development Act for 1974 to include the alleviation of physical and economic distress through private investment and community revitalization among the objectives of such Act. Defines additional terms including "age of housing" and "extent of growth lag." Authorizes funds to be appropriated for the purpose of making grants to States and units of local governments to help finance community development programs, not to exceed: $3,500,000,000 for fiscal year 1978; $3,650,000,000 for fiscal year 1979; and $3,800,000,000 for fiscal year 1980. Authorizes funds not to exceed $100,000,000 to be appropriated for each of the fiscal years 1978, 1979, and 1980 for the purpose of making grants for the financial settlement and completion of projects under the categorical programs. Authorizes funds not to exceed $400,000,000 to be appropriated for each of fiscal years 1978, 1979, and 1980 for the purpose of funding the Urban Development Action Grant Program. Revises specified application and review requirements for such grants. Requires an application for block grant funds to describe a program to improve conditions for low- and moderate-income persons residing in the community. Directs the Secretary of Housing and Urban Development Government to permit recipients to establish with allocated funds a revolving loan fund to finance rehabilitation activities that are a part of the recipients' community development program. Requires housing assistance plans to include: (1) an identification of the housing stock in a deteriorated condition; (2) provision for low- and moderate-income families to receive a preponderance of the subsidized rehabilitated housing; and (3) requirements that in indicating the location of proposed housing for lower income persons additional objectives should be the reclamation of the housing stock where feasible. Makes economic development an eligible activity when carried out by public or private nonprofit entities or by minority enterprise small business investment companies. States that Community Development Block Grant funds cannot be used by recipients for fire, police, and sanitation services if such services were financed by local revenues during the preceding year. Sets forth the formula which the Secretary of Housing and Urban Development must follow in order to determine the amount to be allocated to each metropolitan city and urban county and the distribution of remaining funds. Extends, by three years, the period during which funds will be reserved for use by the Secretary to make grants at his discretion. Increases, by one percent, the amount of funds to be reserved from the total amount appropriated for Community Development Programs. Permits the Secretary to guarantee loans for acquisition of property with respect to grants to States and units of local government to help finance Community Development Programs. Authorizes the Secretary to make urban development action grants to severely distressed cities to help alleviate physical and economic deterioration through community revitalization in areas of population out-migration or stagnating of declining tax base. Reserves urban development action grants only to those cities that have demonstrated results in providing housing for persons of low- and moderate-income and in providing equal opportunity in housing and employment for low- and moderate-income persons and members of minority groups. Lists information to be included in applications for such grants, including a description of a concentrated urban development action program. Directs the Secretary to establish criteria to be followed in selecting cities to be recipients of such grants. Requires annual reviews and audits of grant recipients. Stipulates that at least 25 percent of the funds available for grants under the urban development action grant program be used for certain cities of less than 50,000 population. Amends the Housing Act of 1964 to extend the rehabilitation loan program through fiscal year 1979. Authorizes $60,000,000 to be appropriated for fiscal year 1978. Authorizes $75,000,000 to be appropriated for fiscal year 1978 for comprehensive planning under the Housing Act of 1954. =Title II: Housing Assistance and Related Programs= - Provides $1,159,995,000 in additional annual contributions contract authority under the United States Housing Act of 1937 for fiscal year 1978. Requires not less than $42,500,000 of such contract authority be available for modernization of traditional public housing projects. Directs the Secretary to conduct a study of payments in lieu of taxes with respect to housing projects under the United States Housing Act of 1937 and to report to Congress on the adequacy of such payments. Authorizes appropriations for research and development activities under the Housing and Urban Development Act of 1970 of an amount not to exceed $65,000,000 for fiscal year 1978. Permits assistance payments made pursuant to the National Housing Act to be used in cooperative housing developments financed with a mortgage insured under such Act. Authorizes the Secretary to make to the extent of the moneys in the reserve fund established under such Act an additional monthly assistance payments to the project owner up to the amount by which the sum of the cost of utilities and local property taxes exceeds the initial expense level. Directs the Secretary to assure that availability funds for specified local housing assistance plans be allocated or reserved in accordance with goals described in local, state, or other approved housing plans. Extends through September 30, 1978, the Secretary's authority to make special assistance grants to private new community developers and State land development agencies. Amends the Federal Reserve Act to extend until October 1, 1977, the Treasury Department's draw authority on the Federal Reserve Banks, and to extend until September 30, 1977, the authority of the Federal Reserve Banks to purchase United States obligations directly from the Treasury. =Title III: Federal Housing Administration Mortgage Insurance and Related Programs= - Extends the authority of the Secretary to insure mortgages, under the National Housing act, through September 30, 1978. Increases the maximum mortgage amounts for the Federal Housing Administration's single and multi-family units. Changes the eligibility requirements for mortgage insurance under such Act by decreasing the downpayment requirements. Increases the maximum term of maturity for loans other than mobile home loans under such Act from 12 years and 32 days to 15 years and 32 days. Authorizes the Secretary to increase by regulation mobile home loan ceilings by not to exceed 40 percent in Alaska, Guam, or Hawaii. Authorizes the Secretary to insure mortgages in communities where widespread foreclosures or distress sales are likely to result due to Indian land claims which are experted to be settled by court action or otherwise. Authorizes the Secretary to insure a mortgage covering property located near military installations where conditions prevent mortgage insurance eligibility requirements from being met. Limits the principal obligation of a graduated payment mortgage insured under the National Housing Act to 97 percent of appraised value. =Title IV: Lending Powers of Federal Savings and Loan Associations; Secondary Market Authorities= - Amends the Home Owners Loan Act of 1933 to extend the lending authority of Federal Savings and Loan Associations for the following: (1) construction loans; (2) single family dwelling loans; (3) property improvement loans; (4) multifamily dwelling loans. Makes conforming amendments to the Federal Home Loan Bank Act. Authorizes the Secretary to direct the Government National Mortgage Association (GNMA) to purchase mortgages to promote opportunities for low and-moderate income families. Authorizes GNMA to purchase mortgages in the case of properties located in high cost areas. =Title V: Rural Housing Authorizations= - Authorizes appropriations for specified rural housing programs. Amends the Housing Act of 1949 to make changes in the guaranteed housing loan program. Authorizes prepayment of taxes and insurance by Farmers Home Administration borrowers without requiring that such funds are held in escrow. Authorizes the Secretary of Agriculture to make expenditures from the Rural Housing Insurance Fund in order to correct construction defects or to pay claims of the owner of property arising from such defects. Redefines the term "domestic farm labor" for purposes of farm housing loans and grants to include specified laborers in Puerto Rico and the Virgin Islands. Sets forth eligibility requirements for farm housing assistance for elderly or handicapped persons or families. Extends the program for rural housing loans for elderly and handicapped families to include congregate housing facilities for families who require some supervision and central services. Requires that at least 60 percent of insured rural housing loans shall benefit persons of low income. Authorizes the Farmers Home Administration to undertake rural housing research with any public or private body. Makes it mandatory for the Secretary of Agriculture to provide rural rental assistance. Provides that foreclosed property held by the Secretary of Agriculture be subject to legitimate state and local taxes. =Title VI: National Urban Policy= - Amends the Urban Growth and New Community Development Act of 1970 to change the short title to the "National Urban Policy and New Community Development Act of 1970. Revises the statement of purpose of such Act to include as purposes the development of a national urban policy, the encouragement of the conservation of energy and the support of development to assure good housing. Makes changes in the contents of the President's national urban policy report. =Title VII: Flood and Riot Insurance= - Amends the National Flood Insurance Act of 1968 to extend the national flood insurance program until September 30, 1978. Amends the National Flood Insurance Act of 1968 to authorize funds not to exceed $108,000,000 for fiscal year 1978. Requires lending institutions to notify prospective purchasers in a HUD designated hazard area of the availability of Federal disaster relief for a disaster caused by flood. Amends the National Flood Insurance Act to: (1) increase the ceilings on flood insurance coverage for residential and small business properties; (2) revise the negotiated purchase section of the Act; (3) provide low interest loans to facilitate floodway reconstruction in compliance with Federal standards; and (4) provide Federal reimbursement for costs of appeals of wrongful inclusion in a floodway. =Title VIII: Community Reinvestment= - Community Reinvestment Act - States that the purpose of this Act is to require each appropriate Federal financial supervisory agency to use its authority, when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered. Directs each Federal financial supervisory agency in examining financial institutions: (1) to assess the institution's record of meeting the financial needs of its entire community; and (2) to take such record into account in evaluating the institution's application for a deposit facility. Direct such supervisory agencies to report the results of such evaluations to Congress annually. =Title IX: Miscellaneous= - Establishes, within the Department of HUD, a Special Assistant for Indian and Alaska Native Programs, who shall be responsible for coordinating all programs of the Department relating to Indian and Alaska Native housing and community development. Exempts from coverage under the National Mobile Home Construction and Safety Standards Act of 1974 structures certified by the manufacturer to be designed only for installation and a site-built permanent foundation and manufactured to comply with a nationally recognized model building code. Expands the homeownership counseling program for prospective homeowners under any FHA program. Directs the Secretary to publish annually prototype housing costs for one to four family dwelling units for each housing market area in the United States.