Subprime borrowers are those with weakened credit histories or reduced repayment capacity. Loans to these borrowers historically have had a higher delinquency rate. Many lenders have expanded their lending programs and added subprime products as a method of meeting their _______________ by providing greater credit access to lower-income consumers.
The Community Reinvestment Act (CRA) responsibilities refer to the requirement for financial institutions to meet the credit needs of the communities they serve, including low- and moderate-income neighborhoods. By offering subprime products, lenders can fulfill their CRA responsibilities by improving credit access to lower-income consumers.
Reinvestments can be a great thing for the company
The Community Reinvestment Act (CRA) encourages financial institutions to meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. By expanding their lending programs to include subprime products, lenders can help meet their CRA responsibilities by providing greater credit access to lower-income consumers.