Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What must lenders do under the Community Reinvestment Act?

1. Offer discounts on loans

2. Submit annual statements of community assistance

3. Host public seminars

4. Focus solely on high-income areas

The correct answer is: Submit annual statements of community assistance

The Community Reinvestment Act (CRA) is designed to encourage lenders to meet the credit needs of the communities in which they operate, particularly low- to moderate-income neighborhoods. As part of this act, lenders are required to submit annual statements of community assistance to demonstrate how they are serving these areas. This requirement ensures transparency and accountability by allowing regulators and the public to assess the lending activities of financial institutions and their engagement with the communities they serve. By reporting on their community reinvestment efforts, lenders make it clear what initiatives they are pursuing to enhance access to credit and support economic growth in underserved areas. This regulatory framework aims to combat discriminatory lending practices and promote equitable access to financial resources. Other options, while potentially beneficial for a lender's community relations or marketing strategy, do not reflect the mandated requirements outlined in the CRA for ensuring fair lending practices and fostering economic development in local communities. The focus is not solely on high-income areas, as the act emphasizes the importance of serving all segments of the community, particularly those that are economically disadvantaged.