WASHINGTON — The Treasury Department is embarking on an effort to revise the implementation of the Community Reinvestment Act, a law many community groups say is out of step with modern banking practices and that institutions say has devolved into a compliance exercise.

Tucked away in Treasury Department’s regulatory reform report released last month was a nascent effort to reform the way regulators implement the CRA — a law intended to compel banks to offer loans and financial services to low- and moderate-income areas. The report said regulators need to “better align the benefits arising from banks’ CRA investments with the interest and needs of the communities that they serve” while also improving the “supervisory and regulatory framework” for CRA obligations.

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