Underscoring the central bank’s commitment to community development, the chairman and a member of the Federal Reserve Board spoke in strong terms of continuing that duty in the future, during an event Monday evening honoring former Fed Chairman Janet Yellen’s own dedication to community development.
The comments came against a backdrop of efforts – led now by the Office of the Comptroller of the Currency (OCC), but likely to be soon joined by the Fed and Federal Deposit Insurance Corp. (FDIC) – to reform regulations implementing the anti-redlining Community Reinvestment Act (CRA).
Federal Reserve Board Chairman Jerome H. (“Jay”) Powell said at the inaugural Janet L. Yellen Award for Excellence in Community Development in Washington that the Fed’s community development function plays a key role in helping the central bank carry out its broad responsibilities.
“One thing that was apparent during the recession and the uneven recovery that followed was that people and the places they live are linked,” Powell said. “When one struggles, both struggle. Successful community development invests in and builds up both the physical infrastructure and human capital in underserved areas.”
The Fed chairman added that “the economy benefits when we successfully tap into the underutilized potential of more of our fellow Americans.”
Gov. Lael Brainard – who serves as the chairman of the Federal Reserve Board’s Committee on Consumer and Community Affairs – noted former Chair Yellen’s actions in community development at the Fed, adding that the former chair “brought the subject of economic disparities to the forefront of our conversations, consistently emphasizing the importance of an economy that works for everyone.”
She added that the Fed is committed to continuing that legacy.
”In our service to the American people, we recognize that our monetary policy, financial stability, and supervisory activities have an important influence on the financial health of Americans in communities across the country,” Brainard said. “Promoting community development is one of the key purposes and functions of the Federal Reserve, and we have a responsibility to ensure that consumer and community perspectives inform Federal Reserve policy, research, and actions, including vulnerable communities.”
The award is intended to honor former Chair Yellen’s efforts to ensure perspectives of consumers and communities informed Federal Reserve research, policy, and action, the Fed said. The award will be presented annually to Fed staff who, the agency said, provide leadership and demonstrate outstanding achievement in community development activities.
The first award was presented to Ariel Cisneros of the Federal Reseve Bank of Kansas City. Cisneros was recognized “in appreciation and acknowledgement for his work in developing innovative and impactful community development resources and programs to benefit low- to moderate-income communities,” according to the Fed.