As a part of the sweeping legislation that has become known as the Financial Modernization Act, a compromise between the House and Senate has been reached. However, the largest part of the compromise was a debate over the future of the Community Reinvestment Act.
The original CRA, which was passed in 1977, required financial institutions to extend loans to low- and moderate-income families and minorities in cities where the banks were located. This encouraged these families that home ownership was a possibility. These institutions have since revised many of their underwriting practices and made lending standards more flexible.