Finance
What is the 'Community Reinvestment Act' (CRA) and how does it affect Nevada lending?
AA Nevada state law requiring banks to invest in community events
BA federal law encouraging depository institutions to meet the credit needs of all communities in their service areas, including low- and moderate-income areas — designed to prevent redlining and ensure fair credit access✓ Correct
CA law requiring credit unions to reinvest profits in Nevada communities
DA federal program providing direct mortgage loans to Nevada residents
Explanation
The Community Reinvestment Act (1977) requires federal banking regulators to assess banks' efforts to meet the credit needs of their entire service area, including low- and moderate-income (LMI) neighborhoods. CRA examinations evaluate lending, investments, and services in LMI communities. In Nevada, CRA compliance affects banks' ability to merge, acquire, or open new branches. CRA has helped increase mortgage availability in historically underserved Nevada communities.
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