Changes

The '''Community Reinvestment Act''' (or '''CRA''', (Public Law 95-128), title VIII, (US Statute 91:1147), (US Code 12:2901) ''et seq.'') is a [[United States federal law]] that requires [[bank]]s and [[savings and loan association|thrift]]s to offer [[Credit (finance)|credit]] throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "[[redlining]]." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.

The '''Community Reinvestment Act''' (or '''CRA''', (Public Law 95-128), title VIII, (US Statute 91:1147), (US Code 12:2901) ''et seq.'') is a [[United States]] federal law that requires [[bank]]s and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "[[redlining]]." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.

The CRA was passed into law by the U.S. Congress in 1977 by a [[liberal]] [[Congress]] under President [[Jimmy Carter]] to encourage those earning low incomes to obtain mortgages." Only one banker, [[Ron Grzywinski]] from [[ShoreBank]] in [[Chicago]], testified in favor of the act.  [http://www.fdic.gov/regulations/laws/rules/6500-2515.html]

The CRA was passed into law by the U.S. Congress in 1977 by a [[liberal]] [[Congress]] under President [[Jimmy Carter]] to encourage those earning low incomes to obtain mortgages." Only one banker, [[Ron Grzywinski]] from [[ShoreBank]] in [[Chicago]], testified in favor of the act.  [http://www.fdic.gov/regulations/laws/rules/6500-2515.html]

[[Thomas J. DiLorenzo]] said, "The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various 'neighborhood organizations,' as they like to call themselves, such as the [[Association of Community Organizations for Reform Now (ACORN)]]." <ref>[http://www.lewrockwell.com/dilorenzo/dilorenzo125.html The Government-Created Subprime Mortgage Meltdown], Thomas J. DiLorenzo, ''LewRockwell.com''</ref>

Thomas J. DiLorenzo said, "The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various 'neighborhood organizations,' as they like to call themselves, such as the [[Association of Community Organizations for Reform Now (ACORN)]]." <ref>[http://www.lewrockwell.com/dilorenzo/dilorenzo125.html The Government-Created Subprime Mortgage Meltdown], Thomas J. DiLorenzo, ''LewRockwell.com''</ref>

The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the [[United States Federal government|federal government]] considers an institution's application for deposit facilities, including mergers and acquisitions.  The CRA is enforced by the financial regulators ([[FDIC]], [[Office of the Comptroller of the Currency|OCC]], [[Office of Thrift Supervision|OTS]], and [[Federal Reserve System|FRB]]).  In 1995, as a result of interest from President Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.  These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for five years.  Thus in 2002, the regulators opened up the regulation for review and potential revision.

The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions.  The CRA is enforced by the financial regulators ([[FDIC]], [[Office of the Comptroller of the Currency|OCC]], [[Office of Thrift Supervision|OTS]], and [[Federal Reserve System|FRB]]).  In 1995, as a result of interest from President Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.  These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for five years.  Thus in 2002, the regulators opened up the regulation for review and potential revision.

==Clinton Administration's Changes of 1995==

==Clinton Administration's Changes of 1995==

The [[Clinton]] Administration's regulatory revisions <ref>{{cite web

The [[Clinton Administration]]'s regulatory revisions <ref>{{cite web

|title=Clinton Administration Further Liberalizes the Community Reinvestment Act   

|title=Clinton Administration Further Liberalizes the Community Reinvestment Act   

|url=http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html

|url=http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html

"'To avoid the possibility of a denied or delayed application,' advises the NCRC in its deadpan tone, 'lending institutions have an incentive to make formal agreements with community organizations.' By intervening, even just threatening to intervene, in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers. A radical group called ACORN Housing has a $760 million commitment from the Bank of New York; the Boston-based Neighborhood Assistance Corporation of America has a $3-billion agreement with the Bank of America; a coalition of groups headed by New Jersey Citizen Action has a five-year, $13-billion agreement with First Union Corporation. Similar deals operate in almost every major U.S. city. Observes Tom Callahan, executive director of the Massachusetts Affordable Housing Alliance, which has $220 million in bank mortgage money to parcel out, "CRA is the backbone of everything we do." <ref>[http://www.city-journal.org/html/10_1_the_trillion_dollar.html The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities], Howard Husock, ''City Journal'', Winter 2000</ref>  

"'To avoid the possibility of a denied or delayed application,' advises the NCRC in its deadpan tone, 'lending institutions have an incentive to make formal agreements with community organizations.' By intervening, even just threatening to intervene, in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers. A radical group called ACORN Housing has a $760 million commitment from the Bank of New York; the Boston-based Neighborhood Assistance Corporation of America has a $3-billion agreement with the Bank of America; a coalition of groups headed by New Jersey Citizen Action has a five-year, $13-billion agreement with First Union Corporation. Similar deals operate in almost every major U.S. city. Observes Tom Callahan, executive director of the Massachusetts Affordable Housing Alliance, which has $220 million in bank mortgage money to parcel out, "CRA is the backbone of everything we do." <ref>[http://www.city-journal.org/html/10_1_the_trillion_dollar.html The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities], Howard Husock, ''City Journal'', Winter 2000</ref>  

==George W. Bush Administration's Proposed Changes of 2003==

==George W. Bush administration's proposed changes of 2003==

In 2003, the [[George W. Bush|Bush]] Administration recommended what the [[The New York Times|NY Times]] called "the most significant regulatory overhaul in the housing finance industry since the [[savings and loan crisis]] a decade ago."  <ref>{{cite web

In 2003, the [[George W. Bush|Bush]] Administration recommended what the [[The New York Times|NY Times]] called "the most significant regulatory overhaul in the housing finance industry since the [[savings and loan crisis]] a decade ago."  <ref>{{cite web

|title=Bush Administration Attempts to tighten lending regulation|url=http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

|title=Bush Administration Attempts to tighten lending regulation|url=http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

[[Category:Finance]]

[[Category:Finance]]

[[Category:United States Law]]

[[Category:United States Law]]