Social responsibility requirement of domestic banks

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Reference no: EM131532633

Discusses the social responsibility requirement of domestic banks.

Here is a little bit of information pertaining to an Act that requires regulators to rate banks in three areas that are considered measures of social responsibility:

The Community Reinvestment Act of 1977 (CRA) provides a framework for financial institutions, state and local governments, and community organizations to jointly promote banking services to all members of a community. In a nutshell, the CRA

Prohibits redlining (denying or increasing the cost of banking to residents of racially defined neighborhoods), and

Encourages efforts to meet the credit needs of all community members, including residents of low- and moderate-income neighborhoods.

The Act has many positive elements, but may have also been a contributing factor in the housing crisis of 2008 / 2009.

Visit several legitimate websites (no extreme right wing or left wing sites) containing information about the Community Reinvestment Act (CRA) and discuss whether you think it was a good Act or a bad one on balance in a paragraph or two.

Reference no: EM131532633

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