Which FDIC regulation is concerned with reducing discriminatory lending practices?

The Community Reinvestment Act (CRA) is the regulation that specifically focuses on reducing discriminatory lending practices. Enacted in 1977, the CRA encourages banks and savings associations to meet the credit needs of the communities in which they operate, particularly low- and moderate-income neighborhoods. It aims to combat redlining—where banks historically refused to lend in certain areas based on racial or economic factors—by holding financial institutions accountable for their lending practices.

The CRA mandates that regulatory agencies assess banks' performance in meeting these community credit needs, providing a framework for evaluating their engagement with diverse populations and promoting fair access to credit. Through this regulation, the CRA not only seeks to ensure equitable lending practices but also fosters community development and economic growth.

In contrast, the other options do not directly address lending discrimination. The Fair Housing Act primarily focuses on preventing discriminatory practices in housing and related services, while the regulations regarding securities transactions and nonmember insured banks pertain to financial securities and accounting, not lending practices specifically. Thus, the Community Reinvestment Act is distinctly positioned as the regulation aimed at reducing discriminatory lending practices.