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Gramm-Leach-Bliley Financial Services Modernization Act, passed during Clinton’s presidency in 1999, makes the CRA ratings assigned by a supervising authority of critical importance to financial institutions. One of the reforms under Gramm-Leach-Bliley is the repeal of the depression era Glass-Steagall Act , which prohibited combining insurance and securities companies. However, under Gramm-Leach-Bliley, regulators may withhold authorization for a financial institution to enter into new lines of business, based upon its CRA ratings.
Thus, multi-billion dollar transactions may rise or fall based upon the input of “community organizations.” For example, Bruce Marks of the Neighborhood Assistance Corporation of America won loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group in one city, Boston.
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