CRA and Reinvest Baltimore
What is cra?
The Community Reinvestment Act (CRA), enacted in 1977, requires financial institutions to meet the credit needs of low- and moderate-income (LMI) neighborhoods and borrowers in the communities from which they take deposits. The law was enacted to end redlining, the practice of banks refusing to consider lending in communities of color.
CRA is enforced by three federal bank regulators: the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve System. Through periodic lender examinations of all federally insured depository institutions, federal regulators grade banks’ reinvestment performance. Banks are graded in three areas: Lending, Investment, and Services for low- and moderate-income (LMI) neighborhoods and borrowers. Regulators can use a poor ratings to deny lender applications for opening a new office or acquiring another bank. Feedback from community stakeholders on how banks are serving their community is considered by banks examiners during CRA exams and during bank mergers and acquisitions.
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join Reinvest baltimore
While CRA has brought billions in home and small business lending to LMI neighborhoods in Maryland, CRA has had minimal impact in Baltimore city; capital flows more freely into Baltimore suburbs than Baltimore City, and the money that comes into the City primarily goes to white neighborhoods, businesses, and borrowers. To change this, Baltimore City’s neighborhood leaders and residents must mobilize to leverage CRA and win meaningful reinvestment commitments from the banks that serve our City.
The Maryland Consumer Rights Coalition convenes Reinvest Baltimore as a coalition of neighborhood-based organizations, community development groups, housing organizations, and economic and racial justice nonprofits working across the city to bring the needs of the community to regulators and banks. Reinvest Baltimore members will work together to advocate for the reinvestment capital Baltimore deserves.
Reinvest Baltimore Actions:
Meet quarterly to develop a CRA action plan
Educate community members on how to use CRA to bring meaningful investment to their neighborhood
Conduct annual community credit needs assessment
Advocate for Community Benefit Agreements