What is the main requirement of the Community Reinvestment Act?

The main requirement of the Community Reinvestment Act (CRA) is to promote depository institutions meeting the credit needs of local communities. This legislation was enacted to combat redlining and ensure that banks provide equal access to credit opportunities for all segments of the population, including low- and moderate-income neighborhoods. The CRA encourages banks and other financial institutions to lend to borrowers in these areas, thus helping to foster economic development and improve the overall quality of life in the communities they serve.

The CRA is pivotal in ensuring that banks actively assess and address the credit needs of all parts of their service areas, thereby playing a significant role in community development and financial inclusion. By mandating this kind of activity, the CRA aims to reduce disparities in access to financial services and promote fair lending practices.