Community Reinvestment Act

Definition: The Community Reinvestment Act was created by Congress in 1977 to promote lending in low- and moderate-income neighborhoods by depository institutions operating in those neighborhoods. Such loans, consistent with safe and sound lending practices, are often given to higher-risk borrowers, to help form businesses or buy homes in underserved areas. Under the Community Reinvestment Act, each depository institution's record in helping meet the credit needs of its entire community is evaluated periodically.