Which U.S. law, enacted in 1977, requires federally regulated banks to help meet the credit needs of their local communities?

The Community Reinvestment Act is the U.S. law enacted in 1977 that requires federally regulated banks to help meet the credit needs of their local communities.

Congress passed the law in response to concerns that banks were refusing or limiting credit in parts of cities, particularly low- and moderate-income neighborhoods. The statute directs federal banking regulators to assess how institutions serve the areas where they maintain branches and accept deposits.

CRA examinations can consider lending, investment, and service activities. A bank’s record may be reviewed when regulators consider applications for actions such as opening branches, merging, or acquiring another institution.

The CRA does not require a bank to approve every loan or to make unsafe loans. It also differs from the Fair Housing Act, which prohibits discrimination in housing transactions, and from the Home Mortgage Disclosure Act, which requires reporting of mortgage-lending data.