No one can reasonably deny that when the overall economy gets a cold, low- and moderate-income individuals and neighborhoods get the flu, largely through no imprudence of their own. History proves that lower-income families, particularly those comprising people of color, get fired first and rehired last. As a result, no matter how hard they work to save, they're almost always left a step behind. The Great Recession was a clear example: While a range of big banking institutions were given taxpayer bailouts, more modest communities were left with a Sisyphean boulder. As we emerge from the pandemic, the cycle is apt to repeat itself. One tool we should use to address this perennial problem has emerged from the world of finance. Despite decades of often fruitful work inducing ordinary banks to serve lower-income communities, many poorer neighborhoods today remain inundated with check-cashing storefronts and pawnbrokers. Many lower-income borrowers have little choice but to deal with loan sharks who make it unreasonably expensive to build real credit and to climb the economic ladder. Fortunately, beyond encouraging banks to serve these lower-income communities, a third alternative has emerged. Appearing to consumers much like an ordinary bank, but operating against a different set of incentives, community development financial institutions, or CDFIs, such as Industrial Bank in Washington, D.C., and Southern Bancorp in Arkansas, are proving to be an indispensable tool in the fight against endemic poverty. But they have yet to be scaled. We need to take several steps to drive CDFI growth and success around the country.

Every year, B Lab recognizes the top-performing B Corps creating the greatest impact through their businesses. These B Corps are named Best for the World as their verified scores in the five impact areas evaluated on the B Impact Assessment (BIA)—community, customers, environment, governance, and workers—are amongst the global top 5% in their corresponding size group. These businesses are proving that competing not only to be the best in the world, but the best for the world, is a winning strategy, and they can lead the way as more businesses continue to join the movement that is transforming the global economy to benefit all people, communities, and the planet. This year, Beneficial State Bank, City First Bank, Spring Bank, Sunrise Banks, and Virginia Community Capital were among the banks named Best for the World. 

Join the San Francisco Fed on August 25 for a virtual event titled "Fintech, Racial Equity, and an Inclusive Financial System" to launch a new issue of Community Development Innovation Review. The event will explore the promises and pitfalls of fintech as a means of expanding financial inclusion and reaching underserved communities of color. Innovations in financial technology, or fintech, are changing the ways people interact with the financial system. With these changes comes the possibility of improving inclusion for those who currently lack access to the traditional financial system, including low-income communities and communities of color. But with new ways of doing business come new risks of perpetuating existing inequities or creating new ones. The program features Mary C. Daly, president and CEO of the Federal Reserve Bank of San Francisco, in conversation with Ida Rademacher, executive director of the Aspen Institute Financial Security Program. Experts from across the community development and fintech spaces will discuss the risks and opportunities of financial technology innovation.

The Office of the Comptroller of the Currency (OCC) announced it will propose rescinding the Community Reinvestment Act (CRA) rule issued in May 2020 and is committed to working with the Federal Reserve (Board) and the Federal Deposit Insurance Corporation (FDIC) to put forward a joint rulemaking that strengthens and modernizes the CRA.
This decision follows the completion of a review initiated by Acting Comptroller of the Currency Michael Hsu shortly after he took office."To ensure fairness in the face of persistent and rising inequality and changes in banking, the CRA must be strengthened and modernized," said Acting Comptroller Hsu. "The disproportionate impacts of the pandemic on low and moderate income communities, the comments provided on the Board's Advanced Notice of Proposed Rulemaking, and our experience with implementation of the 2020 rule have highlighted the criticality of strengthening the CRA jointly with the Board and FDIC. While the OCC deserves credit for taking action to modernize the CRA through adoption of the 2020 rule, upon review I believe it was a false start. This is why we will propose rescinding it and facilitating an orderly transition to a new rule. I look forward to working with the other agencies to develop a joint Notice of Proposed Rulemaking and building on the ANPR proposed by the Board in September 2020."