CFPB Reviews State CRA Laws

The CFPB summarized the structure, implementation and enforcement mechanisms of a number of state-level Community Reinvestment Acts ("CRAs").

In a new report, the CFPB said that states play an active and ongoing role in promoting community reinvestment by a wide range of institutions and that continued review is necessary to understand these developments. The CFPB reviewed the CRA laws of Connecticut, Illinois, Massachusetts, New York, Rhode Island, Washington, West Virginia and the District of Columbia. The CFPB concluded that these jurisdictions vary in how they handle state community reinvestment law, highlighting:

• that some states conduct independent examinations of lending, services and investment-related performance;
• that some states apply an "affirmative lending, service delivery, and investment obligation" to mortgage companies as well as to deposit-taking institutions;
• that some states rely on existing data on mortgage lending to conduct their evaluations, such as from Home Mortgage Disclosure Act data or other federal CRA data, but others consider information beyond the federal data;
• that some states utilize enforcement mechanisms, such as limitations on mergers and acquisitions, branching activities and licensing, but that some states have also imposed supplemental measures, such as using CRA performance ratings to restrict the type of activities that a financial institution may conduct; and
• that states have amended their respective CRAs in order to cover additional financial institution types, collect market data and address state-specific needs.