We should encourage more banks to conduct Community Reinvestment Act (CRA) lending.  Because these banks lend at slightly below-market interest rates and/or offer other favorable terms, they help create wealth in communities of color and low-income communities by allowing households to enter the housing market.  Additionally, we should encourage Fannie Mae and Freddie Mac — entities created by Congress to provide liquidity, stability and affordability to the mortgage market — to partner with these banks, effectively making them larger players in the creation of wealth on all levels.

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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.

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Three federal banking agencies, or regulators, are responsible for the CRA.  Banks that have CRA obligations are supervised by one of these three regulators.  Each regulator has a dedicated CRA site that provides information about the banks they oversee and those banks' CRA ratings and Performance Evaluations.  The regulators are the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board (FRB), and the Office of the Comptroller of the Currency (OCC).

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Source:

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United States.  Board of Governors of the Federal Reserve System.  "Community Reinvestment Act (CRA)."  19 Aug 2020

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