Community Reinvestment Act (CRA)

The CRA is an example of the government's role in exposing and correcting market imperfections. A strong CRA helps fulfill the government's role in growing the economy and enhancing markets. The CRA has led banks to discover profitable but overlooked markets, channeling billions of dollars over the last 30 years into market-ready but undeployed assets. It has helped sustain these markets by fostering partnerships between banks and CDFIs.

Recommendation:

• A positive obligation to serve low-income communities and people should be extended to all portions of the financial services industry that compete with banks and thrifts through the CRA. This includes not only credit unions and mortgage bankers but also other entities that provide credit, transaction services, and savings and investment vehicles. Evaluations should include holding companies and all affiliates.

Read more about the Community Reinvestment Act at www.nextamericanopportunity.org/ffi/cra/.