[Watch] Putting the Community Reinvestment Act (CRA) to Work in Your Community


Fed Communities Staff

December 1, 2022 Connecting Communities webinar panel

On December 1, 2022, the Federal Reserve Bank of Kansas City held a Connecting Communities webinar with community-based organizations and bankers who have successfully worked together by developing CRA-eligible project proposals through the Federal Reserve’s Investment Connection program. Watch the video below.

It can be difficult for community-based organizations to fund projects and programs. But if they’re eligible for investment under the Community Reinvestment Act (CRA), that could give them an edge. The CRA encourages banks to support community development initiatives in low- and moderate-income communities. This legislation has been an important tool for driving innovation in partnerships and delivery models and increasing funding to eligible projects.  During the webinar, you’ll gain an understanding of how to identify potential partners, develop mutually supportive relationships, and shape proposals that speak to the needs of organizations and funders alike.


Connecting Communities Putting the Community Reinvestment Act to Work in Your Community (video, 1:31:01).
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Jennie Blizzard

Good afternoon everyone. I’m Jennie Blizzard, a communications advisor with Fed Communities. Welcome to the Connecting Communities webinar, Putting the Community Reinvestment Act to Work in Your Community. We’re excited about today’s event for several reasons. It’s been a while since the last Connecting Communities session in May. A couple of months ago, Connecting Communities moved from the St. Louis Fed to a new home, Fed Communities.

We’re grateful for the strong foundation that our St. Louis colleagues have built for the webinar series that started in 2011. We’re honored to now lead this program and can assure you that you will continue to connect with what the Fed is learning through our research and outreach. This transition also gives you the benefit to access a variety of community development articles, resources and data across the Federal Reserve System on fedcommunities.org.

Before we move to the content for today’s event, we would like to share a few housekeeping items.

Today’s session is being recorded. Views expressed during this session are those of the speakers and are intended for informational purposes. They do not necessarily represent the views of Fed Communities or the Federal Reserve System.

Microphones have been muted. Please use the Q&A feature throughout the session to submit questions. We promise to get to as many of them as possible during the Q&A portion of this presentation. Also, throughout today’s event, you will see periodic polling questions. We encourage you to engage with the audience by answering them. Before turning the program over to Ariel Cisneros, our moderator for today and senior community development advisor at the Federal Reserve Bank of Kansas City, I would like to share a little bit more about him and embarrass him a little about his esteemed career here at the Federal Reserve.

Ariel focuses on the community and economic development informational needs of bankers, community organization leaders, government officials, and policymakers in the 10th District and throughout the Federal Reserve System. Ariel played a key role in creating the Investment Connection program, which you will hear more about today, a resource to inform and educate the funding community, including financial institutions about the challenges that affect low and moderate income people and communities.

Now without further ado, I will turn it over to our moderator for today, Ariel Cisneros.

Ariel Cisneros

Thanks, Jennie. Hopefully I’m coming on. We were having some issues in regards to the camera. Let me add my welcome to everyone. Again, Ariel Cisneros with Federal Reserve Bank of Kansas City, and happy to be with you here today. On today’s program, we’re going to be looking at the intersection of community development organizations working with banks to support your mission and programs while having a banking regulation as the backdrop, the CRA, the Community Reinvestment Act.

My hope that through the presentations that you’re going to be hearing and through the, I’m hoping your active Q&A and so forth, that you’ll have some takeaways that you can apply today or very quickly in regards to communities that you’re serving. As I said, we’ll start by sharing information on the Community Reinvestment Act, otherwise known as the CRA, and then move to a discussion on how to work with banks more effectively by highlighting a couple of partnerships between community organizations and banks.

The collaboration should give you more of the flavor of working with banks in your markets. As Jennie mentioned, please use the Q&A tool. We planned a good amount of time during the session and also at the end of the session for those questions. Slide four, let’s see. We’re moving off to slide five, but also let me remind you that the views in today’s presentation are my own and those of the presenters and do not necessarily represent the views of Federal Reserve Bank of Kansas City or the Federal Reserve System.

On slide five, this slide, community development colleagues that we have throughout the system, opportunity for you, whether you’re from a financial institution or from a community organization, reach out to colleagues at the Federal Reserve Banks. They are a resource for you to assist you in regards to your CRA-related needs, community development needs and so forth. Great resource for upcoming programs and resources that they have available related to the CRA.

Links. There’s going to be some links at the end of the presentation as well that will give you more information. On slide six, moving on, so what is the Community Reinvestment Act or the CRA? Today we’re going to touch on some of the high points of the CRA and how it came about. It’s not intended as an in-depth CRA training session. Also, this does not cover CRA modernization currently being reviewed.

As I said, we also have resources on our website, not only at the Kansas City Fed, but also other reserve banks in regards to CRA training. Let’s start at the beginning. We’re going into the 1970s. Community groups going to Congress to basically talk about redlining of their communities. You probably may see that or heard of it or also be familiar with it occurring in communities today.

In some cases, those neighborhoods could be on the other side of the tracks. It could be a river, it could be a specific road, a park, any number of things. They basically went to Congress to basically say that they were making deposits in financial institutions and banks, but would not see it in lending as far as access to credit. They often didn’t see banks in their communities.

These are predominantly low- and moderate-income communities, LMI, which are a term that we’ll also be using. This is 80% or below of area median income and often communities of color. I will say there’s a lot of writing, a lot of study and research in this space as it relates to the CRA. So on just kind of tip of the iceberg here in regards to that coverage, the regulation. I want you to know that we have a lot of information on that to go with and that insight.

1977, the Community Reinvestment Act, CRA, was passed and the CRA basically encourages banks to lend throughout their communities, including low- and moderate-income communities. As I said, population that’s 80% or below area median income. LMI proxies are used as well, such as schools with free and reduced lunch, Medicaid, and other safety net programs. The regulation also is different depending on the size of the institution.

It’s not the same exam applied to a small community bank compared to a very large institution. It’s broken down by asset size. Smaller banks, $346 million and below, what we refer to as intermediate small banks, ISBs, $346 million to $1.3, almost $1.4 billion. Then large banks are over $1.38 and over a billion in assets. The exam is different. To give you an idea, there are over 4,000 banks in the United States that you can work with and hopefully they’re involved with the work that you do already.

Also, as part of the CRA, broken down as far as the exam under the three tests, the lending test, the investment test and the service test. You’ll be seeing that in the collaborations that we’re going to be sharing today. The lending, and think of that as certainly the loans that are out there, but it could also be a line of credit that’s available, investment test, which is basically also the grants that are available, and services. It’s broken down 50% under the lending test, 25% and 25% for investments and services.

Who enforces the regulation? The CRA? It’s the OCC, which is the Office of the Comptroller of the Currency, OCC, FDIC, Federal Deposit Insurance Corporation, or the Federal Reserve Bank.

They examine for CRA and looking at CRA activities of those financial institutions and are looking to see what the banks have done in regards to their lending, their investments and their services, what have you and if there are any areas that may have been left out. Again, I’m using the term redlining, but certainly in regards to any communities that may not have been addressed by the financial institution.

Lastly what I wanted to touch on was the teeth of the regulation. There is a public file that institutions have to share with the community. You can find that out with your banks that you’re involved in. Many banks include it on their website. So I have it there. If not, if you have difficulty, do contact from that financial institution, their CRA officer, and ask to see where that might be found. That information is there.

Question that came up as far as, are credit unions included in the CRA? They are not. Can certainly talk to the bankers and they certainly think that they should be, but credit unions are not part of the CRA. Again, this is just the banks that fall under CRA.

All right, so I’ve talked about… So on the teeth, again, just continuing with that, we have the public file. Also, the opportunity as far as when a bank is making an application so that the regulatory agencies may… What they’re looking at is they will be looking at your CRA to see, okay, does that fit? As far as for mergers, acquisitions, new branches, those kinds of things. The CRA could be viewed as something that could hold that back.

Staying on the same slide, slide six, the question that I have for you is how do you interact with your banks? CD organizations. A quick win for you I’d say is, is your bank a partner with you and your mission? If not, why not? Is this something that you’ve asked of your financial institution? Think of this as the banking services that they provide. Are there some opportunities there, as I mentioned in regards to loans, investments, grants and services, so forth?

We’ll be getting into some of that meat a little bit more, and you’ll be hearing about it through the collaboration. Think about, and what I want you to think about during the presentations is, what are some opportunities for you in your organization with the financial institutions that you’re already working with? Maybe they’re already partners with you, but they hopefully think of some additional opportunities that might be there.

Our speaker panels today will give you additional insights, as I said, in regards to how to partner with banks in your community. Also, with that, we do have banking webinars on the CRA session of understanding the CRA and the benefits to my organization that can provide you with additional insight as well. My hope is that you’ll use those resources in regards to those potential opportunities.

Jean, if you could move us to the next slide. Let me just see, I see some questions that are coming in. In regards to the results of CRA examinations, yes, that’s also part of the public file in regards to their last rating and what they received. You do have that information. Again, pretty much we have a lot of resources. Do connect with your colleagues or contacts at the Federal Reserve Banks in community development. Happy to assist you there.

Let’s think about some areas of opportunity. Some of your organizations may reflect these areas of focus, but these would be some of the things that we focus on that also financial institutions are very much interested in. I won’t read through the entire list, but think about the critical areas of affordable housing, community services, economic development activities that create job retention, workforce improvements, revitalizing and stabilizing communities.

This is all part of the regulation and important parts of how banks might work with your organization, how you might work with financial institutions. I will say over the last few years due to COVID-19, we’ve had a lot of health-related organizations that we’ve connected with through our Investment Connection program as well. We’ll dive into that as well.

That’s been perhaps an area that wasn’t perhaps thought of by the financial institutions about… Again, it’s addressing needs of low and moderate income communities. Transportation-related activities also come to mind. Again, I think key thing to keep in mind is that it’s focused on low and moderate income communities or how it’s helping to revitalize and stabilize your community.

Another example that I would put in there is… I don’t think I have it down. Small business and economic development is microlending. That’s certainly an opportunity for those of you that have microloan programs.

You can go broad, you can narrow in regards to those opportunities. Again, it’s finding the financial institutions, the banks that are interested in the space and certainly the capacity of your organization and what you might be able to do. May require you, in some cases, educating or informing the funder, the bank, as you would with any funder as to who you are and what you’re doing in the community. That would be helpful.

Let’s move on to our partnerships that we’ll be highlighting on slide eight. We’re going to start. First up is our partnership in Missouri and we have Sara Middendorf, director of St. Louis Builds Credit, Prosperity Connection. She’ll be followed by Stacy Clay, senior vice president and director of community affairs for First Bank. We’ll then come back for a brief discussion and again, a reminder to the audience to utilize the Q&A with any questions.

With that, Jean, if you can move to slide nine. Sara, the floor is yours.

Sara Middendorf

Good afternoon. Thank you for having me today. My name is Sara Middendorf. I’m the director of St. Louis Builds Credit at Prosperity Connection here in St. Louis. You can move on to the next slide, please. We’re a nonprofit organization and our mission is to promote economic success for everyone in the St. Louis region. Primarily we do this in the personal finance realm. You can move to the next slide. Next slide please.

All right. Our organization is broken down into two different programs or lines of business. St. Louis Builds Credit is one of them, which is what I run. This is a citywide alliance where our goal is to use credit building as a way to get people to a prime credit score because credit scores really affect a lot of people’s lives in different ways, not just in terms of financial ways, but it could be also a job, getting adequate transportation, things like that.

Since it is such a big and important part of our financial lives, we wanted to do this in St. Louis, especially when one in five individuals in St. Louis have little to no credit and are considered credit invisible. That’s a big part of our population. What St. Louis Builds Credit is doing is spreading education and access to credit in a number of ways.

We do this through financial education classes where we have classes open to the public on a number of topics that include creating a spending plan or a budget, really understanding, what is credit? How does it work? Why is it important? How do you read your credit report? Because that can be really tricky for somebody who’s never seen that before. There’s a lot of letters and numbers.

We go through that step by step so that they understand what they’re looking at and what’s on there and then learn how to build credit based on what’s on their credit report. We also talk about using credit cards wisely and how to become a homeowner and what that process is in the home buying process. We also can tailor these to different organizations and their clientele.

It could be a specific nonprofit or bank or any other kind of company in St. Louis, or even outside of St. Louis now that we can do things virtually. We can tailor that education as well. We also do credit fairs, which are in-person events on the community. We usually partner with a local nonprofit or a bank or credit union or even a larger employer.

What that is, is we provide credit report reviews, which are 15 to 20-minute short, one-on-one sessions where people can get their credit report pulled. It’s at no cost to them and does not impact their credit. It also includes a FICO score. It’s a great way for people to be able to see what’s on their credit without getting that ding on their credit report.

We go over with them so that they know how to read their credit and we give them personalized recommendations based on what we see there on their credit report as to how they can build their credit. We partner with other organizations doing those and we can also provide those individually on Zoom for people who maybe can’t make it out to those events or just want something quick so that they can get started and get their toe in the water for their credit-building journey.

Then our other business and program is one-on-one financial coaching. For those people who maybe need a little bit more help, maybe they’ve got a lot of things to deal with on their credit report or they’re going through the home buying process and are confused about how to do that, we have financial coaches who can help them through every step of the way so that they can get there and achieve their goals. All of the services we offer are at no cost to anyone who’s engaging in them.

Next slide please. We partner with a lot of banks in St. Louis, but I would say one of our bigger partners is First Bank, who you’ll hear from next after this. This is looking at what Ariel talked about in the beginning of the different tests for the CRA exam. We come together with First Bank and we’re looking at, what is it that they are looking for to fulfill these different parts of the exam, but also what are the things that we need help with as well? We’re really collaborative on understanding what the other organization needs and trying to come together to fill any gaps on both sides. One of the things that I want to highlight is under the service piece for our credit fairs and classes, a lot of them are actually facilitated by volunteers that we train. A lot of these volunteers come from banks and credit unions. Sometimes we have realtors. We have a wide range of people who are coming to volunteer for us, but First Bank is one of those that have a lot of volunteers as well to help spread that education and access to credit.

Another thing that I want to highlight is lending. First Bank has a number of retail banking products that are really geared towards people who maybe have not had the best experience with banks in the past, such as… But they still need to engage in those kinds of products. Second chance checking accounts or credit builder loans, things like that, where we are often referring back and forth to each other. Maybe they see somebody in the bank who needs some help with building their credit, so they refer them over to us to help that person do that. Maybe we see, “Oh, somebody needs to open up a line of credit to help boost their credit score.” First Bank is one of those referrals that we send out as well.

We’re really trying to share back and forth clients and get them what they need. First Bank also does invest in a charitable contribution to us. We’ve also been engaging with other banks because sometimes there are quite a lot of people that they’re coming in… A lot of customers that may need help with financial coaching, or building their credit, setting up a budget, money management, things like that. Sometimes when banks have a lot of volume of people coming over as those referrals, sometimes they invest in a specific financial coach to work exclusively with those customers because there’s such a big need there. That can be another way that happens as well with our collaboration.

I will pass this over to… Oh actually, next slide please, because if you have any questions or want to learn more about what we’re doing, it’s Prosperityconnection.org is our website. We have Facebook and Instagram. Feel free to reach out to me directly if you have any questions after this webinar, it’s SMiddendorf@prosperityconnection.org. I will pass this over to Stacy to talk about First Bank.

Stacy Clay

Can everyone hear me? Thank you, Sara. Forgive me for the Fed team. I had to change my orientation a little bit. I had to move to a different space. But Sara, again, thank you for that warm introduction.

First Bank is a 116 year old bank. We are a community bank, has been led by the Deerberg family for most of those 116 years. We have a footprint that transcends many states—Missouri, Illinois, Nebraska, Kansas, California, and Texas—with our most significant retail footprint being in Missouri and and California. Our goal is really to be the bank of small business, particularly family-owned businesses. Being a family-owned business, we certainly understand the challenges that family-owned businesses face. We want to support them in it.

Our business imperative is very much in line with our community development imperative in that we really want to support communities and particularly small business and entrepreneurship. You’ll hear that throughout our presentation, and that manifests in our collaboration with Prosperity Connection as well. If we can go to the next slide.

When we think about community engagement, we very much use the CRA framework that others had mentioned of the lending test, investment test, and service test. An example of what we do in the lending area is we have a high concentration of small business lending. Again, that is our mission, that is our focus. An example of that is, of course, we’re all familiar with PPP. 43% of our lending, our PPP lending was in majority minority communities with over 30% in low to moderate income tracks.

That demonstrates our commitment to where we want to be, communities we want to serve. In terms of an investment, it was mentioned that manifests in a number of ways, but certainly our donations are geared to organizations like Prosperity Connection, who support individual financial literacy. We support various community development projects and entrepreneurship. We see those things as linked. We know that we can’t get to community development and entrepreneurship without personal finances being intact for folks. That’s where Prosperity Connection comes in with its significant partnership and its resources that they can bring to bear.

Finally, as it relates to the service test, as Sara mentioned, we do have a lot of volunteers who, or volunteer hours that go to support Prosperity Connection and their credit fairs and their other endeavors. We’re pleased to serve them, but we also serve many other organizations through our volunteer services. Can we go to the next slide please?

How do we work with partners? Well, as Sara mentioned, we enjoy a thriving partnership with Prosperity Connection. We have invested in Prosperity Connection for well over five years. We are on the precipice of expanding our relationship to support a new branch that we have opened in an area called North St. Louis, which has been historically an under-resourced and under-invested community. We have put a branch there in collaboration with another local nonprofit who runs a community center called The Hub. We have placed a branch inside the community center. Prosperity Connection is providing the financial literacy outreach for us for folks in those communities. Whether they bank with us or not, we certainly hope that they do, but we want to make sure that folks have the requisite financial knowledge to build wealth and to build their communities.

Again, we do support Prosperity Connection through volunteering. We have a couple of folks specifically who really have taken it on themselves personally to support Prosperity Connection in a variety of ways, including partnership with other banks. This is a space where we’re not competitive. We just want to do the best we can to support the community. Prosperity Connection is the avenue to do that, and we’re happy to work with other banks on projects like that. Can we go to the next slide please?

How do we want partners to work with us? Prosperity Connection, again is a tremendous example. Prosperity Connection understands our overall business imperative, which is working with small businesses. Often that means working with individuals and sole proprietorships. They are committed to helping folks get on the road to financial stability. We are, again, proud to work with them on that.

It’s important that partners in Prosperity Connection has done this expertly, is to articulate what they are looking to do and what they want to get from the partnership. Sara and her team have done that. The lines of communication are clear, the aims of the partnership are clear. That makes my life as director of Community Affairs quite easy.

The final point is, and this is candidly pretty basic, is being responsive and engaged. I must say that I think pretty much all our partners fall into this category and check this box, for Prosperity Connection in particular. They’re very responsive, very engaged, and bring opportunities to us, many of which we followed up on, some of which may not be necessarily in our sweet spot, but we enjoy the connection and the conversation and the engagement associated with the partnership. We can go to the next slide and I believe turning it back over to Ariel for some questions.

Ariel Cisneros

Yeah. Stacy, thanks so much. If we can go back to slide 17, Jennie, appreciate that. Sara, let’s bring you back on as well. I think this would be a good… Stacy, why don’t, while Sara’s coming back on, you connected with Sara’s organization through Investment Connection program and so forth. What made it stand out at the time as far as to say, “Okay, I want to give this organization an opportunity, connect with them,” and now it’s been several years and continuing to that investment with them in multiple ways. What was that initial trigger for you?

Stacy Clay

To be transparent, Prosperity Connection was very much a known quantity in the community. They were known to us. Investment Connection provided the opportunity to learn more about a specific program that they had, the coaching… Sara mentioned that you can dedicate essentially a financial coach to a bank. That was the program that we became interested in and started to deepen our relationship there. Investment Connection provided… It provided a couple things I know for many banks. It provided the opportunity, A, learn about nonprofits they had not heard of. That was not the case with Prosperity Connection, but it also provided the opportunity to learn about specific programs with nonprofits you may have already heard of, but just not aware of that specific program. That was the case with us.

Ariel Cisneros

Great. A follow up as well. What is helpful as far as to make that decision to go from a one-time only contribution to make something a multi-year commitment in many ways, from the banking standpoint?

Stacy Clay

Well, it’s about effectiveness. What happens in that first year, certainly, makes a difference. Prosperity Connection, again, has a sterling reputation. They’ve been doing great things for a long time. They delivered that first year. Then, again, as we became more aware of the depth of their programming, and St. Louis builds credit is a relatively new program of Prosperity Connection. Certainly, under Sara’s leadership, we’ve been impressed with the outcomes and the things that they’re talking about as it relates to supporting folks on an individual level. It provided yet another opportunity for us to get more deeply involved with Prosperity Connection.

Ariel Cisneros

Great. Sara, question for you, if you can help us unpack on the credit building aspect of the program to its core, the interest from banks. What do you think, from what you’ve heard from your banking partners, is a key interest for them?

Sara Middendorf

As I mentioned before, credit is such a big aspect of our financial lives. Since there are so many people who are credit invisible in St. Louis, or in general, there’s a lot of distrust of financial institutions due to historic discrimination and things like that, but this gives… Us engaging with these people give them a way to be able to eventually get engaged with financial institutions in terms of getting credit builder loans, and building their credit so that one day they may want to get a car, or a home. If they want to do that, they most likely need to have good credit in order to do that. Us engaging them from the beginning of building up their credit, so by the time they are ready to get an asset, like a car or a home, they’ve already gotten to a good credit score and so that they can now become good customers of banks and engaging with them in that way.

I think that’s where banks are really interested in our programming because it’s kind of a first step to getting people not only more stable in their financial lives, but to take them to the next level and to build more relationships and get more customers that way.

Ariel Cisneros

Okay, great. There was some questions that came in from the audience for you. Let’s see. Are you tracking the AMI of the clients that you refer to First Bank and also of the clients that are referred to you, and in what way? Kind of tracking of clients.

Sara Middendorf

All of our clients, we ask for their income. We have ranges, I guess. It’s self-reported, but that’s something that we track in our Salesforce database, which is what we use. We know that information coming in from the client, or from the bank, depending on what kind of data sharing agreements we might have with banks, but we’re getting that from pretty much every client that we engage with.

Ariel Cisneros

Okay. Another question, and directly for your organization, how does this alliance measure success?

Sara Middendorf

We keep track of a number of metrics, mainly through our credit report polls that we do with our credit fairs and credit report reviews and financial coaching. We can see… We pull these credit reports every six months with the client’s consent. We’re able to see over time how their credit score might be improving. We’re in the process of trying to get access to regional credit data so that we can understand, what’s the credit situation looking like in St. Louis so that we can measure against what’s our baseline and what are our clients doing and how are we helping people to increase their credit score and by how much. That’s one of the ways that we do that.

Ariel Cisneros

Wonderful. All right, thank you. Let me… There are a couple of questions that came in. Looking at this. At the onset, I did want to say we weren’t going to be discussing CRA modernization, so we’re just looking at the current regulation. There have been some questions related to the ANPR and the NPR. Just as a FYI, broadly speaking, the notice of proposed rulemaking, that comment period had ended in regards to CRA modernization. This is currently with the principles with the agencies, the OCC, the FDIC, and the Federal Reserve. Again, the three regulatory agencies that are reviewing all of the comments that came in following the advanced ANPR, advanced notice of proposed rulemaking. Then we had the NPR, which was based on the comments from the ANPR.

That is now being worked on. I don’t have any new information to share at this point in time. There’ve been a few questions, as I said, in regards to CRA modernization that I wanted to get to. Hey, thank you to the audience as far as the Q&A. It’s starting to fill up quite nicely with your questions. There’s also a question in regards to SSBCI, the State Small Business Credit Initiative. In regards to organizations that may or may not be participating, I think the key thing is what your respective state submitted to treasury as far as their plan. I know that some of those plans, those state plans have already been approved. I don’t know in total as far as how many have been approved, but that is occurring right now.

But yeah, that’s also resources that we’ll have at the Federal Reserve Banks. Some work in regards to SSBCI, State Small Business Credit Initiative, so forth. Let me see if there’s… Give me just a moment here. Finding banks. Oh, a question in regards to banks, and actually I may bring this in for the entire panel at the end. It’s for organizations that are saying, “Okay, how do I identify banks working in our community?” One of the first things I often recommend is asset mapping as far as, and banks are certainly part of that asset. Stacy or Sara, any recommendations for… What does your outreach… Well, let me… Sara, what does your outreach look like for banks that perhaps are not participating with your organization at this point in time? I apologize, that may not even be in your space as far as connecting with that development side of things.

Sara Middendorf

My executive director has a lot of connections there from… She used to work at US Bank a while ago. All of the community development organizations in St. Louis, we all kind of know each other. If there’s a bank we haven’t worked with yet and are interested in doing so, we can usually find a connection through one of our other partners in the nonprofit space. We try to collaborate in that way of even just sharing contacts and connecting each other that way.

Ariel Cisneros

Terrific. Terrific. All right. Great use in regards to working together as far as community organizations. Guys, thank you very much for sharing your comments and so forth. We’ll have you back a little bit later when we bring all of the speakers with back. Jennie, if you wouldn’t mind taking us to slide 18, our next partnership is in Colorado. I’ll pass it to James Wareham-Morris, who’s the senior VP risk management for Alpine Bank, and then he’s going to be followed by Casey Sorenson, CEO of PCs for people. James, the floor is yours.

James Wareham-Morris

Thank you. I just want to open with, I’m really, really appreciative to be here today. I want to thank you because over the years you’ve done so much for me and the Fed, providing resources around CRA. Hopefully I’m able to give back something to you guys. My presentation is going to be a little bit of a story just to illustrate how CRA opens doors, and it opens doors into the bank, and bank’s relationship.

We can go to my first slide here. Here’s a slide of Tony and John. It’s Earth Day 2020. They’re picking up a bunch of computers in our rifle location. They’re going to bring them back Denver to refurbish them, and ultimately, they’re going to go back out into the community. Our story is like… Some of the themes are like second chances and good fortune.

We met at an Investment Connection in April, or in August of 2019. I had just returned back to Alpine Bank for the second time. I’d only been back for about a month. When I got the Investment Connection list of organizations, I think Stacy had mentioned it’s a good way to get introduced into organizations, or maybe learn about some ones that you’ve heard of, make those connections. I get that. I go through the list. I came across PCs for People. They were looking for a loan to purchase a building for their new current location in northeast Denver. I’m thinking to myself, I’m like, “Hey, I’m back at the bank for a month. There’s no way I’m pushing through this loan.” I had crossed them out. The day of the presentation came along. I’m sitting there. I’m listening to what Casey’s saying. He did three things that caught my ear and really started this partnership. The first one was the easy CRA hook. Obviously, I’m at investment connection. I’m expecting to hear about CRA stuff, but he made it really simple. They explicitly serve low-income families. They had the statistics, talking about how it’s 200% of the federal property level. In my mind I’m like, “Okay, I can qualify that for CRA, no problem.” The second one, and it was actually a novel thought to me was that probably behind food and shelter, access to computing resources is really important. It’s an essential service. If you don’t have that, life’s going to be more difficult. There’s costs to that. A lot of society is structured around being connected, being connected through a computer, having that connection through high speed internet. This is Q3, Q4 of 2019.

We don’t know what was about to occur in 2020, where we really got to see how that connection to the internet and to the broader world mattered so much. Then third thing was, and this was the real, real important thing about what Casey and PCs for People was able to do. The third bullet point was that they’re certified to handle sensitive data, to destroy it, and to recycle computers and the components of computing in a responsible manner.

Alpine Bank… You can go to the next slide. We’re coming up on our 50th anniversary next year. We started in Colorado’s mountains. We expanded to the Western slope. Over the years now we’ve crossed over and we’re now on the Colorado front range. We’re about $6.2 billion in assets. We started… We’re like a real, real community bank where we started in our communities. Our bankers really know them. We have a really innovative debit card loyalty program where every time one of our customers slides their debit card, we donate 10 cents. That 10 cents goes back into the community that’s associated with the deposit account.

That will come into play later in story. What Casey allowed me to do is to go back, and I’m just the CRA officer in this story. There’s so many other people that helped in the bank to make this possible. As soon as he told me that they were certified with the data destruction, I could go back to our head of information security to our IT staff, Ross, Doug, Tom, and I could say, “Hey, here’s an organization that is set up to do something that matches what we believe in.” We believe in the environment, we believe in giving back to communities. It just so happened to be, here’s where the good fortune comes in the second chances, we had just done a major rollover of our computers. We had about 440 computers sitting in Rifle.

Being a highly regulated industry, the information that’s on our computers is important. It took a while to get them certified as a vendor, had to go through vendor management and all that stuff. I was able to get in touch with one of our bankers down in Durango, Beth Drum. She really understood how this would really help the community. The CRA part just opened the door to her connections in the community. She really saw the big picture. I was able to hand it off to her.

That’s a good example where CRA opened the door into the bank and then PCs for People got access to our relationships. With the loyalty debit card dollars, Beth’s found, been down in the Durango region for many, many years, we’re making donations in the community. She had lots of connections to the school district, to other nonprofits that she was then able to leverage so that once the computers had gone from Rifle to Denver to be refurbished and then they were driven down to Durango, which for perspective, you could drive to Montana in about the same amount of time, or you could drive down to Albuquerque from Denver. Durango is hard to get to.

She really was able to take over that task. The great stories that she’s now on the advisory board for PCs for People. From a CRA perspective for the banks out there, we have CRA donation of the items, and then we have CRA service hours with her board involvement.

Our marketing team, they heard about it. It’s a great idea at the time. The Kansas City Fed also had their laptop challenge. Kate and Allison in our marketing department, they promoted the event. Ultimately, they submitted our work with PCs for People to the ABA. We won a community commitment award for economic inclusion in 2020. As an organization that I hadn’t heard of, met with the Investment Connection. CRA just opened the door. It allowed me to hear and think about what all the good things they did.

I was able to use the connections in the bank to help PCs for People use our resources and our connections to open up. You can go to my next slide. It’s just a little bit more of the overview here. Yeah, that’s where you can see the Alpine Bank loyalty debit card.

Those are the biggest parts, from my perspective, was that just CRA opened the door. A lot of the people in the bank, they actually took this and worked with PCs for People to do something that matched our values with the environment, giving back to the community. It just so happens to be that we also get CRA credit for it. Going into the pandemic, we then redistributed those computers into the Durango area to families that didn’t have computers to connect to remote learning. That was just really good example where CRA started the conversation and the bank took over and really did what the bank, what the community needed, which is really what the Alpine Bank model’s all about as a community bank.

If you guys have questions for me, my contact information’s on the next slide. I’m going to turn it over to Casey because he can give you the other perspective

Ariel Cisneros

Thanks James. Casey, the floor is yours.

Casey Sorensen

Thank you. We can move ahead to slide 24. As James said, thank you to the Federal Reserve for your work, including organizing Investment Connection and this event. PCs for People is a national nonprofit focused on digital equity. Over the last 24 years, we’ve connected hundreds of thousands of people with computers, internet and digital skills training.

Go ahead. I’d like to frame the issue of digital equity in one simple question. What year did you send your first email? If everyone can pause and think about that year. Many of us on this call have been sending emails for 25 years, but now imagine you’ve never sent an email. Do you have the same job that you have today to be on this call? The reality for half of the people coming to our program is, they’ve never sent an email before. PCs for People works with families and individuals below the 200% federal poverty level, or below 60% AMI.

Our average recipient is a family of three living on about $18,000 per year. The Federal Reserve of Dallas had a great quote a couple of years ago, which was, “Digital inclusion represents economic inclusion.” That quote rings true every day in our work. When someone gets a computer or internet from us, we ask basic questions, including income, and we collect eligibility documents like free lunch at school or Section eight housing. Through this process, we’ve found that income goes up by 15% in the first year after a family receives our services. For every 5,000 homes we connect, that’s an 8 million aggregate increase in income. As James said, I like to say food, shelter, computer. If we can take care of the basic needs, food and shelter, a computer and internet connection has the power to lift a family out of poverty. Next slide.

When we first launched PCs for People in Minnesota, we had 400 donated computers. I thought it would be set, but those 400 computers were gone in two weeks. In two months, we had a 2000 family waiting list. I needed to step back and rewrite our business plan and attempt to meet an overwhelming community demand. What we created is a four-step model, source, refurbish, distribute, and support technology.

The first step is sourcing. Instead of asking for donations of computers, we’ve grown to be an industry leading IT recycling service. We deliver that service now to about 3000 companies across the US. I’m sure everyone on this call today has gotten a new computer at their work over the last three years. That old computer you had has to go somewhere. We aim to be that somewhere and try to create a win-win for everyone involved where the service we offer is free.

The two logos on this page, as James said, are for certified data sanitization and certified recycling. Assets are returned to the community. That reuse is both a community and an environmental benefit. A big reason why I’m talking today is banks are eligible for CRA credit just by working with us for IT recycling. That’s something some banks are paying to get rid of. We’d be happy to connect to offer an opportunity for those CRA credits and community impact.

Step two is refurbishing. We sort and process around 5 million pounds of electronics annually. All computers are cleaned, return to like new condition, get a new license copy of Windows installed. We’re currently processing over 400 computers per day right now.

Step three is distribute. When I’m asked what our biggest challenge is, it’s still having the supply to meet the community demand. Even at 400 computers daily, word of mouth continues to drive people to us and push the capabilities of our teams. We distribute through E-commerce, retail, a network of nonprofits and libraries, and through large sponsored bulk events, like James mentioned.

This slide also has our distribution heat map. We built this map to show where every one of our computers are going. When overlaid with a heat map of poverty, I was amazed that our computers are touching almost every pocket of poverty across our country.

Fourth, support. Our goal is not only to get, but keep working computers in homes. To do this, we offer skills trainings to our customers, everything from digital literacy to financial literacy. We have a help desk where we serve as just like your corporate help desk, the help desk for hundreds of thousands of families. Our national call center receives around 800 phone calls per day where we’re able to support the users with their technology.

One more bullet on this slide is connectivity. As we know, a computer’s not too valuable without internet. We have both a hotspot program that runs on the T-Mobile network and we function as an ISP, building last mile wireless networks and wiring large apartments with groups like housing authorities and affordable housing providers. The internet service is unlimited, $15 per month. Thanks to new federal programs like ACP, many of our customers are able to enroll for free ongoing internet service.

Go ahead. My contact information is on there, as well as our general email. If anyone wants to connect with us and partner, we do events across the US and we’d be happy to collaborate. Feel free to shoot me an email. Go ahead. I’ll pass it back to James here to give a little more overview of some of the impact of our partnership.

James Wareham-Morris

Thanks, Casey. Yeah, as I mentioned, we had about 440 devices that we were able to recycle, keep them out of the landfill, and more importantly, they went back into the community. The reason that the number says 475 is because there were actually additional devices, that organizations that Beth had access to, they were able to contribute things, computers that went back out there. You’re saving about 15,000 pounds of IT equipment. I think it’s the 13th of this week, so second week of December, PCs for People are going to come back out to Rifle here and pick up some more e-waste or computers that we have. It’s going to get back out into the community.

Our event down in southwest Colorado had an impact on 542 families. That was actually magnified because Beth had connections to other nonprofit organizations, for example, like United Way of Southwest Colorado. They were able to take funding and connections and actually take what we had as the bank, what PCs for People, Tony and Casey had down there, and then Beth brought it all together and actually magnified it. She was able to leverage that relationship that she has down in the community. Our 440 computers turned into 542 families because of those relationships and those connections.

The six additional recycling business partners, as I pointed out with my map, it’s over six hours from Denver to Durango. If you’re going to drive a truck down there, one of the things they would to do was they were able to get other businesses, other partners. This is really what’s important from Casey’s perspective, is that as a bank, I’m a highly regulated industry. If I can trust them with our computers, there are certainly other organizations, hospitals, I know they have lots of computers, they also have lots of important PHI on them. We had six additional business recycling partners, but then they filled that truck back up, drove it back to Denver, and the process just starts all over again.

For the people out there with their CRA hats on, as I mentioned, Beth is using her banking skills at an eligible community development, CRA organization with PCs for People. We get CRA services for that. If you’re talking about your CRA exam, it’s a pretty good story. From my perspective, it’s just that computing resource thing is so essential to modern life. That’s a big impact for me. I’ll now turn it back to Ariel.

Ariel Cisneros

Thanks James. Let’s actually go back to the previous slide, if you don’t mind. Yeah, that would be great. Oh my goodness, in regards to the impact. James, thanks so much for mentioning when you made the connection as far as Investment Connection event. We brought about, and I’m not sure if I shared this with my opening remarks as far as Investment Connection, the program that not only the Kansas City Fed, but other Federal Reserve Banks was basically to assist as CRA officers that were looking for some clarity and certainty in regards to CRA opportunities with programs throughout our communities and so forth. Kudos. This has now become a multi-year engagement as far as a relationship, I should say, with PCs for People, and on and on in regards to the equipment donations, but also, there’s some funding, correct, that went to PCs for People. That’s not necessarily on this slide, but there’s some funding to support their programming.

James Wareham-Morris

Yeah, you could think of that just like your standard CRA investment donation, but to do something that’s more complex, things take a long time. When you’re saying that it’s a multiyear relationship, it’s like that took a while to set up, went from August of ’19 to April of 2020 to get going, but here we are in December of 2022 and we still have the relationship. It takes that effort.

Ariel Cisneros

Thanks so much for bringing that up because I’d like to make sure that community organizations that are listening understand that. This is in Stacy’s case as well with First Bank, that in a way you have to champion it as far as potential relationship for either, whether it’s a loan, whether it’s an investment for services, those kinds of things, through whatever process you have within your financial institution, and that each bank could be very different as far as how their process. Anything that you can share on that and what you might be looking for for those organizations that you want to take through that process, so to speak?

James Wareham-Morris

Yeah, absolutely. When you talk about different banks, like Alpine Bank, we have this strange entrepreneurial culture inside of the bank. When I have an idea, the great thing is that I can talk to people, I can pitch it, but I’m also sometimes going up against other resources or what someone would think of as a market rate or a market idea. Our process is different than another one. But when I was talking about what Casey did so well in his original presentation was he checked off the three boxes for me, which was like he has the demographics that I know that I’m going to make to qualify for CRA. That conversation with the examiner’s going to be easy.

Then he told a compelling story, because I then take his story and I’m talking to our IT people, I’m talking to Beth and I’m saying, “Hey, listen to this great story.” I’m just going to pass that off. I’m going to pass that relationship off to someone else in the bank, but I have to sell them on it first.

The third one, for this specific one, is that he answered the hardest question for me, which is that they can handle the data, they know how to destroy it. If you think about talking to a bank and opening the door to the bank, the bank’s relationships, their resources, make it easy for me as a CRA officer to tell the rest of the bank about it. You’re not necessarily selling me, you’re selling the rest of the bank. That’s been my experience. Casey made it easy for me. That was great.

Ariel Cisneros

Terrific. Terrific. I will have some more questions for you, Casey, just wanted to confirm, because I see the term e-waste recycling. Help us, the e-waste also includes reuse, correct? Reusing all of this equipment. You’re giving it a second life, so to speak. Can you share a little bit more about that?

Casey Sorensen

Yeah. Our service for banks is we want to be a one stop vendor. We’ll take anything and everything, working or not, cables, cords, printer, server switches, like I said, 5 million pounds of stuff, but we also use that as a workforce development opportunity. It’s so much stuff for us to process. A niche that we have is in Minnesota, we have job training for people on the autism spectrum. In Colorado, we have low income youth that we train on technology basics. In Ohio, we do reentry programs. We want for a business to take absolutely everything and then we can use that for workforce development training. One of our slides said sustainability. We want to, as a nonprofit, have impact and sustainability through each step in our model. The sustainability is those cables and cords that are a wrap nest that we all hate, have some commodity value to them. We can use that commodity value to help fund our model and help be sustainable.

Ariel Cisneros

Terrific. Thank you. Tell you what, as we transition, I’m going to bring all of the speakers back together for a big discussion and get more of your questions from the audience. Again, a reminder to the audience, please use the Q&A, and then Sara and Stacy, if you can join us as well. Jennie, the next slide.

A reminder that this session is being recorded. If you have to drop off, you will be given the link at some point from Jennie. Jennie’s going to be sharing that information a little bit later. Thanks so much. But let me bring everybody back. Let’s just open it up for additional questions from the group. As I said, it is being recorded. There have been some questions. There we go. Let me make sure. I’ll open this one up for the bankers. Questions as far as… Is there a CRA plan for each bank, or is everyone different? For James, and for Stacy, and Jennie, I don’t know if you want to bring everybody back up. I don’t know what works best on the view here. Stacy or James, anybody that wants to tackle that one? As far as your plan, I guess this would be your strategic, your CRA plan for your institution. How do you develop it? I don’t know if this is a banker that’s asking the question, or if it’s a community organization that’s asking, how do I get in? Or is our service, that we provide, something that might be of interest to your institution? If one of you could kick us off.

James Wareham-Morris

I’m going to let Stacy kick us off because his bank is actually the more mature bank. We’ve only been around for 50 years, so he can take it away.

Stacy Clay

Thank you, James. And just to be clear, I want to distinguish between an actual formal CRA strategic plan, which puts you in a different evaluative scheme… I assume we’re not talking about that. We’re just talking about generally how do you approach CRA. So understanding that, from the perspective of First Bank, so we have a philanthropic focus that is aligned yet somewhat different from our CRA focus. Our philanthropic focus is on youth and youth serving agencies. So we do have quite a few dollars that go to youth serving agencies, which certainly is aligned with CRA in that those agencies, by and large, overwhelmingly support lower/moderate income youth, so there is a CRA connection. But we also look at CRA separately from the perspective of community development projects and activities. And so for us, when we think about CRA, of course we think about the lending service and investment test, we think about our philanthropic goals related to youth and making sure that there’s a CRA connection, but prosperity connection really falls into that community development bucket, which we spend a lot of focus on.

Because we do, some of our more sophisticated investments, that’s where the HBICs and other entities fall under that in CRA investment bucket. Which can take a little bit more thought, a little bit more planning, as it relates to how we approach them because some of those investments are rather significant, in the millions of dollars, in fact, as we think about some of those projects. So to answer the question directly, we view philanthropic, we have our focus there, and then we have a community development focus. So that’s kind our strategic approach in how we use CRA.

Ariel Cisneros

All right. James, would you add anything-

James Wareham-Morris

Yeah ours is actually not too different than what Stacy described there. You have the real community development, you were talking about with CRA, and then you have… We get a lot of our ideas about how to help the community from our banks and bankers because they’re the ones that have the deep connections into our individual communities. So it really is both a top-down approach and a bottom up where me, as a CRA officer, I’m actually kind of in the middle of that. I’m getting ideas, but then I’m also evaluating where our strengths and weaknesses are from a CRA perspective, and proposing, okay, so we have limited time and resources, we could do this or we could do that… Here’s the CRA benefits, how does that align with how the bank sees itself, what the community needs and very honestly, also what the regulators expect of us. So our process is actually not that different than what Stacy’s described there.

Ariel Cisneros

Okay. One thing I would add, and I was thinking of it as far as in the collaboration with PCs for People, that the regulation talks about being responsive to community needs and also innovative. And so I would imagine that James, you and Stacy are often looking for how is this different? It could be different for us, for example, as an institution, maybe this is the first time that we’ve worked in this space or in this geography, what have you… And so it could be responsive, it could be innovative. So those might be some possibilities as well?

James Wareham-Morris

Absolutely. That’s part of the storytelling piece of CRA, is that like Beth Derango, Casey, they know what needs to happen. For them, they’re not thinking in terms of the regulation, using that innovative and responsive language. So part of my role as a CRA officer is to take the stories and the good things that people really want to do and then fit them back into the CRA exam. To say, here’s something innovative, here’s something that we might not think of, the bank of the future being on your phone or your computer, right?

Well, it is, and here’s an organization that’s trying to get computers into low-income households that actually lines up with the services test because while the current regulations are physically branch focused, we’re in a transitional period where those computing resources are equally important because that’s how you’re going to access many of the bank’s services. So that is part of that storytelling piece, is saying like, hey… And honestly, it’s my job to talk to the examiners about that because their first point of contact isn’t PCs for People or Beth Derango, it’s me, so I have to tell the story through that CRA lens initially. So yeah, you’re absolutely right. Using that CRA terminology for new stuff.

Ariel Cisneros

All right. And Casey, one directly for you here. Can PCs for People place donated equipment specifically within a financial institution’s footprint? So a bank is asking, I think, as far as if they were to donate equipment to you, could you then put it back in their assessment area-

Casey Sorensen

Yeah, absolutely. And that’s just going on the story James was telling, that is what we do is we work with the groups that are recycling with us, to try to meet their needs, even for redeployment. Generally, it works easier to have a pay-it-forward model, that James also explained. That if someone wants a 400 computer distribution event, we bring a truck full of 400 computers that are ready to go, and then we pick up the assets of that bank and we return those back to our warehouse to go out to the next event. So usually it’s that pay it forward, and I like to say that every community across our country has the resources to close the digital divide, just needs the group to bring those resources together, and that’s how we and banks have successfully operated, connecting the resources in a community to help that community.

James Wareham-Morris

And Casey, what you’ve done with us is you’ve been able to really explain how our computers might not be the best fit for the targeted community that you’re going out to. So it’s like we might have a certain desktop computer that might not be great for a kindergarten or first grade class. So while it’s not a one-to-one, certainly from a CRA, does it go back into my assessment area question. It’s like you give them a computer, they’re going to give you the proper computer for what that community needs. Going back to using that responsive language, PCs for People is being really responsive to the needs of the community, even if it’s not my exact computer. That said, you guys track the resources for us, so you really can tell me where my computers end up.

Casey Sorensen

Yeah. One unique thing with our model is we put an ID where we know the business that gave it to us and we know the demographics of who received it. So we provide an annual impact report, so I can tell James that last year, because you worked with us, the stats, we saw the number of households, but then we know the number of kids, we know the average income… And so we roll that up into a full report to give back to every one of the customers that work with us for recycling so they understand their impact.

Ariel Cisneros

So we have a question for the bankers as far as CDFIs, and for the audience that may not be familiar… CDFIs are community development financial institutions, they are certified by US Treasury, and these are organizations that basically re-lend funding. So they receive funding often from banks, from government, federal, could also be state, local, et cetera and they re-lend. Often you see it as they have funds for micro-lending, for small businesses, it could be community facilities, it could be in the affordable housing space, et cetera and the question is, how do banks support CDFIs with CRA funds? And I’ll start off with, I’m saying it’s the whole ball of wax here, that it’s loans, investments and services, probably, and when you work with CDFIs, and if we have any CDFIs listening that’s an… Well, it’s an automatic as far as that it counts for CRA purposes, so if you are a CDFI, a community development financial institution… James or Stacy, anything that you’d add? Stacy, why don’t we start with you in regards to CDFIs?

Stacy Clay

Sure. Yeah. First Bank is partnered with a couple of CDFIs across our geography. There’s a couple in St. Louis that we work with and then in California we work with CDFIs as well. And the real benefit is simply put, they make loans and do deals and investments that would be very challenging for us to do, just based on credit and other factors. So they serve as a conduit for us to leverage our dollars in a way that we wouldn’t be able to do under our own credit policy or other auspices.

Ariel Cisneros


James Wareham-Morris

Yeah, and-

Ariel Cisneros

James, anything you’d add?

James Wareham-Morris

Yeah, I would say that we also have a number of partners that are CFIs. And same thing that Stacy has said right there, part of what we’re also trying to think about is that while we can’t help you right now on the credit side, it gives my bankers an opportunity to do a nice warm handoff to a CDFI that we know and we trust and say, “Hey, we can’t help you today, maybe we can help you right now with the deposit relationship, go talk to our friends at the CDFI, they’re going to help you with loan.” And in the future, hopefully that business matures, we have the deposit relationship, we’re still in touch with them and later they’re ready for a more formal banking credit and we can continue that relationship. So that’s where I would say, as a CDFI, that’s a selling point that you have. You have better credit terms, but then you can really build the business of the future, that we as a bank are going to be able to bank. So that’s kind of the sales pitch from a CDFI’s perspective.

Ariel Cisneros

All right. Sarah, a question for you that came in as far as your organization. Folks are asking if you also assist in regards to credit repair and do you help correct errors that consumers, folks that are utilizing your services, with any errors that they have? So credit repair and errors?

Sara Middendorf

Mm-hmm. Well, we don’t like to use the term credit repair because that can be often predatory, but we do help people with any credit, if there are inaccuracies on their credit report we help them to dispute that, if they have any collections or charge offs, things like that, that are on their credit, we can help them, to teach them how to talk with those debt collectors or whatever credit agencies that they’re working with, or financial institution, what have you… So that they know how to speak with them and what to ask for and how to hopefully either negotiate or settle, whatever the case may be. So we can help them. We can even sit on the call with them if they would like, so that they can feel like they have somebody there that they trust and so that they make sure they understand what’s going on and things like that. So we do help people to deal with any kind of credit issues that they may have on their credit in a more detailed way.

Ariel Cisneros

All right. Question for the bankers, well, let’s see, I think I could tackle this… Are CRA investments by banks different than the charitable giving that they do for local nonprofits, through small grants, discretionary giving? So going back to CRA, you’ve got the lending test, the investment test, and the services test. Under the investment test that does include grants, so it could be a qualified investment, which might be comparable to a foundation PRI, that there’s an expectation of repayment… Terms apply, in regards to what that rate and so forth might be. Or it could be a grant as far as no repayment required. James, Stacy, I don’t know if you had anything to add to that. Are there any other pulls… And maybe let me just add this, not everything, I would imagine that both of you do qualifies for CRA credit… That your bank is still involved in other things, other contributions, that perhaps you can’t make the case for CRA, but you’re a community partner, you’re a civic leader and it’s just good business or being a good community partner, what have you.

Would that be fair?

James Wareham-Morris

Yeah, I’d say absolutely. I mean a lot of our discussions when it comes to CRA is does it primarily benefit an LMI population or individual? Right? Well there’s lots of instances where either the organization doesn’t collect that detailed of data or sometimes it’s 39% or something like that. And I’m not going to get CRA credit for it, but it’s the right thing for the community to do. We have those loyalty debit card donations that go back into the community and that is where we get a lot of our CRA donation dollars from. But a lot of those dollars go back to what the community needs. Not everything has to qualify for CRA, it’s just the right thing to do. So yeah, CRA is a subset of giving.

Ariel Cisneros

Okay. Stacy, anything you’d add?

Stacy Clay

And I would echo that. And if you look at, for example, many of your medical or disease related, for lack of a better term, nonprofits, the American Heart Foundation, those kinds of things… It can be harder to parse out some of their work related to low-to-moderate income communities. You can, but sometimes that’s a hardship for the organization. So we say if you’re supporting young people who may have thus and such illness, we’re not going to make you parse that out. We’re just going to support it because it’s the right thing to do. And so if your services go to those who are a little bit over the average income for the area, that that’s okay too.

Ariel Cisneros

Terrific. Question, I think it’s more for me. Does the Federal Reserve have representatives that give presentations on the CRA to interested nonprofits? We do. We have folks, so going back to the map, and feel free to connect with me in regards to if you’d like to… Depending on what part of the country you’re in, and I can help you identify someone, see what they have available for making that information available.

We also have videos, webinars, what have you, that are available in regards to understanding the CRA, that have been produced. So very helpful to give you a high-level in regards to the CRA, so forth. So the expectation is that the bankers are going to know the regulation well and what needs to happen and that they should be able to lead you through that. So we’ve got about a minute or so left, so just a quick lightning round. What recommendation would you have, and this is for each of you… For those of you that are community organizations, for an organization to connect with a financial institution? What would be two or three things that you think you ought to have? And for the bankers, what would you like to see community organizations bring to you? What are those two or three things that would be helpful? Sarah, if you can kick it off.

Sara Middendorf

Sure. So from the nonprofit perspective, I think it’s important to try and find, well first understand what are the needs of banks that you’re trying to work with and what they’re looking for. But also trying to see how you can naturally align and partner with them. You don’t necessarily want to bend over backwards for people if that’s not sustainable for you. But to try and find a really just natural partnership and alignment with what you’re already doing and engage in those meetings and conversations. Because sometimes they take a lot of planning, as I think James mentioned earlier, with a lot of discussions and brainstorming about how can we work together. So being open to that and understanding where each is coming from.

Ariel Cisneros

Casey, do you mind if I go to you next?

Casey Sorensen

Absolutely. Yeah. So I would say for community organizations, call up and talk to your CRA officers, it’s their job to find investment opportunities. Learning what they’re looking for, see if your program aligns. But then learn about CRA too. We’ve been two and a half years working with various banks and we continue to learn. Just last week I learned we’re listed in the CRA public evaluation, as an officially approved CRA option, I didn’t even know that was the thing. So keep asking questions to the CRA officers, keep learning about how this works, and the banks are interested in the communities and willing to make investments.

Ariel Cisneros

All right, Stacy?

Stacy Clay

I think a very rudimentary knowledge of CRA is helpful for nonprofits looking to partner with banks. Certainly not expecting anyone to be a CRA professional, but to understand at least the framework that banks operate under, as it relates to community engagement, I think is helpful in having a productive initial conversation.

Ariel Cisneros

Great. And James?

James Wareham-Morris

Sure. One of the interesting things is how can the nonprofit help the bank? Because there might be a market that you aren’t real strong in that the nonprofit has a good relationship. So think about, what Casey mentioned, learn about, is it a good fit between the bank and the organization? Look at where the bank is working and try to understand what our needs are… Which sounds selfish, but in reality that allows me to have a deeper, longer lasting relationship. It’s not just that transactional, made a donation, trying to get CRA credit. It’s where’s the good fit? So trying to think about it from the bank’s perspective, you are the one that actually has something that’s meaningful and important to us, and so think about what you can do to help us. And a lot of times I think that people are thinking that they’re coming to the banks for help, but the organization can help the bank just as much. So that’d be my big, big recommendation.

Ariel Cisneros

All right. And I’d just like to extend my thanks to our panelists today for being part and sharing your thoughts with our audience. And Jennie, I’m going to pass it on to you. And just a reminder in regards to resources that are available, take advantage of them, they’re there for you, and feel free to reach out. So Jennie, back to you.

Jennie Blizzard

Thanks, Ariel. And thanks to our speakers for providing such insightful information. And we want to thank the audience for your great questions and the valuable time that you spent with us today. But before we end the session, we do have several requests. At the end of this event, you will be sent a survey. And we do ask that you respond so we can approve and continue to bring you timely and relevant topics. There also were quite a few questions about whether the session would be recorded.

Yes, it has been recorded and it will be available on YouTube and our Connecting Communities website within the next two weeks. We also ask that you visit Fed Communities at fedcommunities.org to access additional articles and data and resources that were mentioned today. And don’t forget to subscribe to Fed Communities by clicking the About Us tab and then you can click subscribe. Also follow us on social media. We’re on LinkedIn, Twitter, Instagram, and Facebook. And finally, please mark your calendars for our next Connecting Communities event on February 9th at 3:00 pm Eastern Standard Time. More details and registration and event information will be forthcoming in January. So thanks again for joining Connecting Communities and we wish you and yours the happiest of holidays.

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