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Economic Commentary

The Community Reinvestment Act: Early Experience and Problems

The Community Reinvestment Act of 1977 (CRA), effective November 6, 1978, requires financial institutions to “ … demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business.” The CRA directs four regulatory agencies- the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Home Loan Bank Board (FHLBB), and the Federal Deposit Insurance Corporation (FDIC)-to encourage each institution under their jurisdiction to help meet the credit needs of the local community. The four regulatory agencies also are required to assessan institution’s record of meeting the credit needs of its community, including low-to-moderate income neighborhoods, consistent with the safe and sound operation of the institution. These assessments are to be taken into account when the regulatory agencies evaluate various applications by institutions.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Buynak, Thomas M. 1981. “The Community Reinvestment Act: Early Experience and Problems.” Federal Reserve Bank of Cleveland, Economic Commentary 4/20/1981.