GLOSSARY
Community Reinvestment Act (CRA)
A 1977 U.S. law encouraging banks and other lending agencies to extend credit to low and moderate income
persons wishing to buy a home. The original contained no penalties, but
prohibited lending institutions from discriminating against a potential
homeowner based on where he/she lives. Regulatory changes in 1995 and
legislative amendment in 1999 are often blamed for encouraging banks to
make excessively risky loans in exchange for the ability to offer
investment and insurance services. Because of this, some believe the
CRA is responsible for the housing bubble that contributed to the recession that began in 2008.
