ABA Banking Journal - November 2010 - (Page 36)

compliance clinic  |  Community Reinvestment ACt A new direction for CRA Revisions look likely. Here are clues to the outcome by robert g. rowe III A 36 new turning in the road is coming for the Community Reinvestment Act. Whether the federal regulatory agencies take the input they received at four hearings held this summer or whether Congress takes action on CRA, bankers can expect steps will be taken to update CRA. When Congress adopted CRA in 1977, it was one in a series of statutes Congress adopted to help meet national credit needs. First came the Fair Housing Act of 1968 and the Equal Credit Opportunity Act of 1974, statutes designed to ensure fair treatment for individuals. Congress found that some lenders were making credit decisions based solely on geography, however, which was contributing to the decline of local neighborhoods. The first step to address that problem came in the form of the Home Mortgage Disclosure Act (HMDA) in 1975. Taking things one step further, in 1977 Congress adopted CRA, which goes beyond housing, to all credit. Unlike the laws that ensure fair access to credit, the basic premise of CRA—which hasn’t changed in nearly 35 years—is to be sure that depository institutions affirmatively meet credit needs of local communities. Since 1977, the world has changed. Banking holds a much smaller share of financial markets. The number of banks has decreased substantially. Banks can now operate across state lines. Credit unions have evolved, and can now operate with a community-based charter. Insurance companies now own banks and securities firms offer far more than investments. Technology has changed how we live and bank. A much-amended rulebook Let’s consider several significant changes along the way to today—each of which could be significant for where CRA goes. Our first stop: 1993. Nobody was very happy with CRA. The general consensus: There was way too much emphasis on | AbA bANKINg JoUrNAL | novembeR 2010

Table of Contents for the Digital Edition of ABA Banking Journal - November 2010

ABA Banking Journal - November 2010
Contents
Chairman’s View
Editor’s Column
The Economy
Bank Notes
ABA Community Banking: Chapter 12’s Bad Fit
Pass the Aspirin
Tech Topics
Capital Squeeze
Basel III Redefines Capital
Compliance Clinic
Compliance Inbox
ABA Resources
Investment Management
Surveys & Trends
First Person

ABA Banking Journal - November 2010

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