The Community Reinvestment Act (CRA) is a federal law that was designed to encourage financial institutions and other lenders to provide loans in low-income areas. The act was passed into law in 1977 and was specially designed to facilitate commercial mortgage lending in low and moderate-income areas. Congress passed the act to reduce a number of discriminatory practices that affected the ability of low income neighborhoods to receive funding for home improvements and real estate purchases. Because federal agencies routinely examine a financial institution's records when applying for a new branch, acquisition or merger, auditors have a way to check a bank's record. The CRA does not advocate unsound lending practices, and any loans that are made are subject to the same stringent guidelines that affect the financial institution's overall policies. The law is intended to be applied on an individual basis and take each financial institution's unique situation into account.