Bank Commitments

The Community Reinvestment Act is a federal law that requires banks to meet the financial needs of the communities where they are doing business.

The bank regulators (the Fed, OCC, OTS and FDIC) are responsible for overseeing the CRA. These federal agencies ensure that the banks are making loans and investments, and opening branches in all communities where they are taking deposits.

Public and community groups can use the CRA to highlight when banks are not meeting their reinvestment obligations, usually when a bank is seeking permission from its regulator to expand its business through merger or buying another banking company. During most mergers, regulators must consider whether the banks applying to merge are meeting their CRA obligations, and the public is given an opportunity to comment. This is a good time to push banks to make a community commitment.

The California Reinvestment Coalition (CRC) has negotiated community commitments with California’s major financial institutions for 20 years.  A goal of those commitments is to focus the attention of these financial institutions on the opportunities and needs of California’s low-income communities and communities of color.  CRC aims to make these written commitments as specific as possible in order to form the clearest platform for real and productive partnerships between financial institutions and communities.

CRC members then use these commitments as the basis for productive meetings with bank officials with authority for lending, investment and services decisions, including the CEO.  Meetings are attended by CRC members and an equal number of key bank staff.  The goal of the meetings is to review accomplishments of the bank toward its commitment and new community opportunities for the financial institution.