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Discussion Paper
Tracing the History of Community Development Credit Unions
When the Community Reinvestment Act was passed in the late 1970s, Congress tasked the 12 Federal Reserve Banks with ensuring that supervised financial institutions meet the credit needs of the communities they serve. Community development financial institutions (CDFIs) are mission-driven lenders that help provide credit in underserved areas. As we gather information on CDFIs through the 2025 Federal Reserve CDFI Survey, we want to examine the roots of community development finance and the evolution of CDFIs.This post focuses on the history of one type of CDFI: community development credit ...
Discussion Paper
Taking Stock of Community Development Financial Institutions
Community development financial institutions (CDFIs) are mission-driven organizations that expand financial product and service options to lower-income households, small businesses, and communities. The Community Reinvestment Act of 1977 created the Federal Reserve's community development function, which is tasked with promoting economic growth and financial stability for low- to moderate-income communities. Because CDFIs support access to credit in low- and moderate-income areas, the Federal Reserve has a direct interest in understanding CDFIs' role in capital access and the landscape of the ...
Discussion Paper
Early Results: The Federal Reserve's 2025 CDFI Survey
This spring, we fielded the 2025 Community Development Financial Institution (CDFI) Survey. The survey provides policymakers and community development stakeholders with information about how CDFIs are faring as they work to close gaps in credit and capital access. We heard from 448 institutions during the survey fielding period from April 10 to June 13, which accounts for nearly 30 percent of all certified CDFIs in the country. CDFIs shared their experiences in the following areas:Goals for scaling their operationsDemand for productsChallenges in meeting demandPublic programs that have ...
Journal Article
Features: Fighting Payments Fraud
For many people, TikTok has become their go-to source for information on everything from fashion to food to home maintenance. Gone are the days of having to figure it out yourself or "Google it"; influencers now post short videos detailing how to perform any number of supposed "life hacks" meant to make life a little easier or, at the very least, more entertaining. In the past year, one more hack joined the list: check fraud. The hack went viral in the fall of 2024, and it was surprisingly easy: Chase Bank customers wrote checks of significant amounts to themselves, deposited those checks ...
Journal Article
Interview: Carmen Reinhart
Carmen Reinhart is a leading authority on financial crises in both advanced and emerging economies thanks to timely and groundbreaking research like her acclaimed 2009 book, This Time is Different: Eight Centuries of Financial Folly, with frequent co-author and fellow Harvard University economist Kenneth Rogoff. Yet despite the influence she has had on the profession, she wasn't drawn to economics until later in life.
Journal Article
Federal Reserve: Reserve Bank Boards of Directors
The boards of directors of the 12 Federal Reserve Banks are not typical boards. To be sure, they carry out many of the usual responsibilities of corporate governance, such as approving a strategic plan and monitoring operations, auditing and risk, human resources, executive compensation, and the like. But unlike private sector boards that are primarily concerned with firms' financial health and growth projections, Fed directors are also charged with a much broader task that makes them not just unique among institutional boards, but within American society at large: assisting in the ...
Speech
Competition in Banking: Achieving the Right Balance
It is a pleasure to be with you this morning. The theme of this session is “How Banks Compete.” I want to develop a variation on this theme and consider how the intensity of competition in banking has increased over the years, and some of the challenges this change presents.In the 33 years I have worked at the Richmond Fed banking has changed immensely. A salient feature of this change — perhaps the single most important feature — has been expanded competition. Today Chicago banks, for example, can own branches in any state, pay market-determined interest rates on deposits and charge ...
Speech
Economics and the Federal Reserve After the Crisis
There are two different ways of thinking about financial stability, representing alternative theories of financial market behavior. The first assumes that market institutions and behavior are fixed and that those fixed characteristics result in a financial system that is prone to instability. The second assumes that market institutions and behavior are adaptable and that financial markets respond to expectations of government support, which can provide undesirable incentives and lead to instability.U.S. financial regulatory policy seems to be largely based on the first theory. However, since ...
Speech
Ending 'Too Big to Fail' Is Going to Be Hard Work
Ending the treatment of certain firms as “too big to fail” requires addressing two mutually reinforcing issues: first, the expectation that creditors of some financial institutions are protected by implicit government support, should those institutions become troubled; and second, the obligation many policymakers feel to support certain institutions to protect creditors from losses.The current system encourages fragility, which induces interventions.The Dodd-Frank Act attempts to deal with “too big to fail” through the establishment of the Federal Deposit Insurance Corp.’s Orderly ...
Speech
Lacker Testifies on Bankruptcy and Financial Institution Insolvency
Good morning. I am honored to speak to the Subcommittee about the bankruptcy code and financial institution insolvency. In my remarks, I will discuss why I believe it’s so important to improve our bankruptcy code to make it feasible to resolve failing financial firms in bankruptcy. At the outset, I should say that my comments today are my own views and do not necessarily reflect those of the Board of Governors of the Federal Reserve or my colleagues at other Federal Reserve Banks. My views have been informed by both my experience leading the Fifth Federal Reserve District over the last ...