Which act requires federal regulators to assess the record of each bank or thrift in fulfilling its obligations to the community?

• A. Truth in Lending Act
• B. Community Reinvestment Act
• C. Fair Housing Act
• D. Home Mortgage Disclosure Act

Answer: (B)

Community reinvestment oversight involves regulators evaluating how a bank serves its community's credit needs, including lending to low- and moderate-income neighborhoods. This is the purpose of the Community Reinvestment Act, which requires federal regulators to assess a bank or thrift’s record in fulfilling its obligations to the community and to consider that performance when approving mergers, branch openings, and other actions. The other acts address different goals: Truth in Lending Act focuses on clear disclosure of loan terms to borrowers, Home Mortgage Disclosure Act collects data to monitor lending patterns, and the Fair Housing Act targets eliminating discrimination in housing practices. Thus, the act that fits the description is the Community Reinvestment Act.