Session Title:
Government Regulation & Public-Private Partnerships

Speaker Name / Title:
Carolyn Welch & Ann Scoffier

Organization:
Federal Reserve Board of Governors of the Federal Reserve System & City First Bank of D.C.

Description:
For more than three decades, policy makers and regulators have encouraged banks and bank holding companies to help address the vexing economic and social challenges that have beset lower-income communities. Many of these efforts have been aimed at encouraging banks to apply their unique business perspective and position to serve markets that have been traditionally underserved for a variety of reasons, including a history of discrimination and the perception of a lack of profit opportunities. Bank regulatory efforts aimed at promoting business-based approaches to serving low-income communities have focused on the use of strategic partnerships and innovative organizational and capitalization strategies to reduce risk, leverage capital, and maximize revenue potential. Public-private collaborations play a critical role in the process of creating viable ways to meet the credit and banking needs of lower-income communities and populations. One such structure is the community development bank, a mission-driven financial institution that serves low-income communities and populations. City First Bank, N.A., a grassroots community development bank in Washington, D.C., has employed innovative collaborations to capitalize the bank and develop new business that leverages the regulatory and strategic needs of financial institutions in its market. These partnerships enable the bank to identify profit opportunities in financing the development of affordable housing, small businesses, and new schools in some of the city’s poorest neighborhoods.