Table of Contents
- 1 Why is the Community Reinvestment Act of 1977 important?
- 2 Why was the Community Reinvestment Act of 1977 criticized after the onset of the Great Recession?
- 3 Was the Community Reinvestment Act successful?
- 4 What’s the purpose of the Community Reinvestment Act quizlet?
- 5 What does the Community Reinvestment Act do?
- 6 What has been the lasting impact of the Community Reinvestment Act?
- 7 Why was the Community Reinvestment Act established?
- 8 Was a response to the practice of redlining and was enacted in 1977?
- 9 Why was this 1977 law did not create the 2008 financial crisis?
- 10 Who is Michael Boyle of Community Reinvestment Act?
Why is the Community Reinvestment Act of 1977 important?
The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
Why was the Community Reinvestment Act of 1977 criticized after the onset of the Great Recession?
The proposed law was the subject of heated debate. Critics were concerned the law would create distortions in credit markets and result in credit allocation by the federal bank regulators. They also noted an already heavy regulatory burden, and felt the CRA would encourage riskier lending.
How did the Community Reinvestment Act affected the US economy?
The Community Reinvestment Act encourages bank lending to low- and moderate-income neighborhoods. Enacted in 1977, it sought to eliminate bank “redlining” of poor neighborhoods. That had contributed to the growth of ghettos in the 1970s. In redlining, neighborhoods were designated as not good for investment.
Was the Community Reinvestment Act successful?
Other studies find that the CRA has been effective in encouraging financial institutions to lend to redlined neighborhoods. Several analyses conclude that the CRA had a positive influence in encouraging lending to low- and moderate-income borrowers and in low- and moderate-income neighborhoods.
What’s the purpose of the Community Reinvestment Act quizlet?
Is intended to ENCOURAGE depository institutions to help meet the credit needs of the communities in which they operate, including LOW- and MODERATE-INCOME NEIGHBORHOODS, consistent with safe and sound banking operations. You just studied 27 terms!
What was the Community Reinvestment Act of 1977 quizlet?
The Community Reinvestment Act (CRA), enacted by Congress in 1977 and implemented by Regulations 12 CFR parts 25, 228, 345, and 195, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
What does the Community Reinvestment Act do?
The Community Reinvestment Act (CRA) is a law intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound banking operations.
What has been the lasting impact of the Community Reinvestment Act?
Supporting the conclusion that the CRA has a positive effect, the analysis found that in CRA-designated census tracts, there were lower vacancy rates, higher homeownership rates and higher growth in owner-occupied units than would have been predicted when compared with changes in the census tracts that were not CRA- …
What did the Community Reinvestment Act outlaw?
Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining….Community Reinvestment Act.
| Long title | An Act to amend certain Federal laws pertaining to community development, housing, and related programs. |
| Citations |
|---|
Why was the Community Reinvestment Act established?
The Community Reinvestment Act (CRA) is a federal law enacted in 1977 to encourage depository institutions to meet the credit needs of low- and moderate-income neighborhoods.
Was a response to the practice of redlining and was enacted in 1977?
Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining….Community Reinvestment Act.
| Effective | October 12, 1977 |
| Citations | |
|---|---|
| Public law | 95-128 |
| Statutes at Large | 91 Stat. 1111 |
| Codification |
What was the purpose of the Community Reinvestment Act?
The Obama administration used the CRA to penalize banks for discrimination that had nothing to do with housing. It lowered ratings of banks that discriminated in overdraft charges and auto loans. The administration also pursued new redlining cases against banks, an issue that hadn’t been at the forefront for decades.
Why was this 1977 law did not create the 2008 financial crisis?
Why This 1977 Law Did Not Create the 2008 Financial Crisis. The Community Reinvestment Act encourages bank lending to low- and moderate-income neighborhoods. Enacted in 1977, it sought to eliminate bank “redlining” of poor neighborhoods. That had contributed to the growth of ghettos in the 1970s.
Who is Michael Boyle of Community Reinvestment Act?
Michael Boyle is an experienced financial professional with 9+ years working with Financial Planning, Derivatives, Equities, Fixed Income, Project Management, and Analytics. The Community Reinvestment Act encourages bank lending to low- and moderate-income neighborhoods.
How did the CRA contribute to the financial crisis?
If the CRA did contribute to the financial crisis, it was small. An MIT study found that banks increased their risky lending by about 5 percent in the quarters leading up to the CRA inspections. These loans defaulted 15 percent more frequently. This was more likely to happen in the “greenlined” areas.