Community Reinvestment Act (CRA)

The Community Reinvestment Act (CRA) is a 1977 US law that encourages banks to help meet the credit needs of the whole communities they serve, including low- and moderate-income (LMI) neighborhoods. It was partly a response to redlining, the refusal to lend in certain neighborhoods.

The CRA applies to banks and savings associations insured by the Federal Deposit Insurance Corporation (FDIC). It does not apply directly to credit unions, nonbank lenders or community development financial institution (CDFI) loan funds. Three federal regulators examine banks under it: the Office of the Comptroller of the Currency (OCC), the FDIC and the Federal Reserve. Each bank gets a public rating, from Outstanding to Substantial Noncompliance.

Examiners review a bank's lending, investments and services in its assessment areas, usually where it has branches. Community development work counts, such as affordable housing loans, small business lending in LMI areas, and loans to or investments in CDFIs.

The rules have been in flux. A major 2023 overhaul was blocked in court before it took effect, so banks are still examined under the 1995 rules. In July 2025, the regulators proposed rescinding the 2023 rule. Then on July 31, 2026, the OCC and FDIC, without the Federal Reserve, proposed targeted changes to the 1995 framework, with comments due October 13, 2026. The Federal Reserve did not join that proposal and says it continues to apply the 1995 rules. As of October 2026, the 1995 rules still apply and the next version is not settled.

Why it matters for lenders

For banks, a CRA rating matters beyond reputation. Regulators weigh it when a bank applies to merge, buy another bank or open a branch, and a weak rating can delay those plans.

For CDFIs and other mission lenders, the CRA is a major source of capital. Banks lend to CDFIs, invest in them, buy loan participations from them and back programs like the New Markets Tax Credit partly because that work can earn CRA consideration.

How it works in practice

A regional bank wants CRA credit for supporting small businesses in a low-income part of its market. It makes a $2 million low-rate loan to a local CDFI, which relends the money as microloans.

The bank needs proof. Each quarter, the CDFI reports how the money was used: number of loans, amounts, borrower census tracts and whether those tracts are LMI. The bank's CRA officer files the report with its exam records.

If the CDFI tracks loans in spreadsheets, that report means looking up addresses and matching tracts by hand. When each loan carries its census tract and capital source on the record, the report takes minutes, and the CDFI looks like a stronger partner for the next bank.