The Board of Governors of the Federal Reserve System (Federal Reserve) has received inquiries and complaints from consumers who received particular types of solicitations. The solicitations suggest that there is a "Community Reinvestment Act (CRA) program" that entitles certain homeowners to cash grants or equity disbursements. Some of these solicitations may be read to indicate that the Federal Reserve endorses or supports the offers they contain. The Federal Reserve cautions the public about loan solicitations or other offers from lenders or mortgage brokers that offer consumers cash as part of a "Community Reinvestment Act (CRA) Program."

These solicitations appear to be a deceptive effort to encourage consumers to apply for a mortgage loan secured by the consumer’s home. The Federal Reserve does not endorse or sponsor mortgage loan programs. Additionally, the federal law known as CRA does not require programs as described in the solicitations, nor do such programs exist.

The Community Reinvestment Act is a federal law that was enacted in 1977. It encourages depository institutions to help meet the credit needs of their communities, including low- and moderate-income neighborhoods, in ways that are consistent with safe and sound banking operations. The CRA does not entitle individuals to any grants or loans.

You should be very suspicious of conducting business with lenders or mortgage brokers that make deceptive claims. If you are considering taking out a loan using your house as security, we urge you to shop around. Comparing loan programs offered by a variety of different lenders can help you get a better deal. You may find the link to this pamphlet useful. http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm

If you have any questions, please send an email to crahelp@frb.gov or call the CRA Assistance Line at 202-872-7584.