What is CRA?
The federal Community Reinvestment Act (CRA) is a 1977 law that spells out the responsibilities of banking institutions to their local communities. CRA directs the four federal banking agencies with supervisory authority over depository lenders. It requires that banks and savings institutions take affirmative steps to help meet the credit needs of the entire community they are chartered to serve, including low and moderate income areas. Banks that fail to do so can be denied permission by federal regulators to buy other banks, engage in interstate banking, and open or close branches.
CRA does not direct banks to make specific loans. Instead, it gives them a broad, affirmative obligation to serve the needs of the community in which they're located.