Seventh District Representation on the Fed’s Community Advisory Council

“The Community Advisory Council (CAC) was formed by the Federal Reserve Board in 2015 to offer diverse perspectives on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income populations. The CAC complements two of the Board’s other advisory councils–the Federal Advisory Council and the Community Depository Institutions Advisory Council–whose members represent depository institutions. The CAC meets semiannually with members of the Board of Governors in Washington, D.C.”

The Fed’s Seventh District comprises parts of Illinois, Indiana, Michigan, and Wisconsin, plus the state of Iowa. Two members of the CAC hale from the Seventh District, one of whom was recently appointed. During this month we will publish a blog about each, in their own words, to give our readers some additional insight on our representatives to the CAC, and their points of view on community development policy priorities.

The newest CAC member from our district is Bethany Sanchez, who represents the Metropolitan Milwaukee Fair Housing Council. We asked her some straightforward questions about her role, responsibilities, and outlook.

Q: What do you do for Metropolitan Milwaukee Fair Housing Council and why is your work important to the community?

I direct the Fair Lending program at the Metropolitan Milwaukee Fair Housing Council, partnering with local, state and national groups to create programs and policies to increase fair lending and housing choice, and promote fair and affordable housing and equitable community development.

In that role, I monitor the lending records of banks serving the Milwaukee area and convene the Milwaukee CRA Coalition. I’m a member of the Board of Directors of the National Community Reinvestment Coalition (NCRC), a leader in Milwaukee’s homeownership consortium called Take Root Milwaukee, and an active participant in the Wisconsin Consumer Roundtable, Milwaukee’s Alliance for Economic Inclusion, the Financial Equity Coalition, and the Wisconsin Affordable Housing Coalition. Another big part of my work is providing a wide variety of community groups with outreach and education on fair housing, fair lending and the Community Reinvestment Act.

These interactions and relationships reinforce my understanding of the barriers to our goal of ensuring that every credit-worthy borrower has equal access to fairly-priced credit. Fair housing and fair lending laws are incredibly important. However, much more work is needed to ensure that all borrowers understand their rights and responsibilities, avoid predatory loans, and obtain home loans and small business loans that will help build wealth and secure a healthy, equitable future for their families and communities.

Q: Why was it important for you to get involved with the Chicago Fed and become a part of our Community Advisory Council?

I have been fortunate to be a Beige Book Survey participant for the Chicago Fed for a number of years. I hope my input has helped the Fed gain a deeper understanding of local trends in the Milwaukee region, especially as they relate to housing, jobs and community development. I expect that the national opportunity to serve on the Federal Reserve Board’s Community Advisory Council will take that to the next level, informing the Federal Reserve Board and their staff about the financial concerns of Milwaukee area low- and moderate-income communities, and of opportunities to increase equal access to fairly-priced credit and capital.

Q: Tell us one thing that would help us to get to know you.

I am a strong believer in the importance of balance. The balance and interconnections between my professional, personal and spiritual life keep me engaged and motivated. Meditation helps me remember to seek understanding of the perspectives and motivations of those with whom I interact, striving to engage with others from a calm, balanced place of love.

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Changing the Narrative of Communities: Highlights from a Symposium on Business Growth and Employment in Chicago’s African American Neighborhoods

By Robin Newberger and Maude Toussaint-Comeau

Narratives about place – the stories that surface in the news and in popular culture – have implications not only for the perceptions and impressions that circulate about neighborhoods, but for the economic potential of the residents who live there. Decisions about where to invest, how to allocate public resources, whether a home can be financed and so much more are affected by the impressions that people (and society) have about a community. The consequences for asset-ownership, wealth, and economic well-being can be devastating when the messages are overwhelmingly negative.

Shedding light on the assets and opportunities in Chicago’s Chatham neighborhood, and presenting alternative narratives about place, was the goal of a symposium on “Business Growth and Employment in Chicago’s African American Neighborhoods” organized by the Federal Reserve Bank of Chicago, The Greater Chatham Initiative and World Business Chicago in June 2017.[1] The meeting brought together academics, journalists, funders, and business people to share perspectives on the programs and strategies that attract capital, support businesses, and strengthen communities.[2]

In this blog we highlight some of the insights and recommendations that were discussed during the symposium for how the Greater Chatham area may be able to enhance its success as a “community of choice” where people want to live and shop, and as a “community of opportunity” where residents are connected to jobs, businesses, and broader networks throughout the region.[3]

Figure 1: Greater Chatham

greater-chatham-map-1Source: The Greater Chatham Initiative
Greater Chatham is a 15-square miles area including the communities of Avalon Park, Auburn Gresham, Greater Grand Crossing and Chatham.

Video Highlights: Opening Remarks

Alicia Williams, Vice President, Community Development Officer and Director of Community Development and Policy Studies, Federal Reserve Bank of Chicago  >>

Nedra Sims Fears, Executive Director, Greater Chatham Initiative  >>

Session 1: Reflections on community change in south side neighborhoods

It’s the aggregated energy that helps to make a place great. – Theaster Gates, Director,  Arts + Public Life at the University of Chicago and Executive Director, Rebuild Foundation

The Greater Chatham area and other south side neighborhoods possess many of the assets that comprise the building-blocks for economic development. The far south side of Chicago, from 79th Street to the Cook County line, is unique not only for its large tracts of industrial-zoned land, but for having the highest concentration of transportation assets in North America. South side neighborhoods also boast an array of local food and arts establishments, as well as corridors that include the highest retail census tract for African American shoppers in the city of Chicago. Some of the most popular cultural attractions, like The Chosen Few House Picnic, have long remained under the radar of mainstream media. Others, like the planned Obama Presidential Center in Jackson Park, are attracting widespread attention, and will likely bring additional arts, food, and hospitality investments in the coming years. In some cases the benefits of these community institutions extend beyond the amenities they provide. While the formerly- abandoned Stoney Island Arts Bank has been repurposed as a destination space for hospitality and culture, it has also sparked the re-development of adjacent properties and created an energy for people “to imagine a new kind of south side” in which artists, entrepreneurs, and “creatives” invest in African-American places.

Video Highlights: Session 1

 Jane Rhodes, Department Head, Professor of African American Studies, University of Illinois at Chicago >>

Alden Loury, Director of Research and Evaluation, Metropolitan Planning Council >>

Natalie Moore, WBEZ-Radio Reporter and Author, The South Side: A Portrait of Chicago and American Segregation >>

Theaster Gates, Director, Arts + Public Life at the University of Chicago, Rebuild Foundation >>

David Doig, President, Chicago Neighborhood Initiatives >>

Session 2 (part A): Accelerating business growth and employment in minority neighborhoods

There are new jobs and new ways of working. We have to prepare people for the new ways. – Karen Norington Reaves, CEO, Chicago Cook Workforce Partnership

Figure 2

A relatively high proportion of workers in Greater Chatham are employed in education, health services, transportation, and warehousing (Figure 2). A great many of Chicago’s manufacturing employers are located on the South Side, including a Ford Motor plant that employs more than 4,000 people and other Tier-1 automotive suppliers. These are the companies where employees can often start at entry level, earn their way up to a six figure income, and have no college debt. Yet many of these positions go unfilled by potentially qualified south side residents. Employers too are often unaware that public workforce system, represented at the symposium by organizations like the Chicago Cook Workforce Partnership, and Calumet Industrial Commission offers resources for training and job placement at no charge to the hiring firm.

Video Highlights: Session 2 (part A)

Karin Norington Reaves, CEO, Chicago Cook Workforce Partnership >>

Ted Stalnos, President, Calumet Area Industrial Commission >>

Session 2 (part B ): Accelerating business growth and employment in minority neighborhoods

We have some wonderful African-American owned businesses on the south side. – Jackie Dyess, Owner, Inter City Supply

Small businesses are another component of economic activity in Chatham and other south side neighborhoods. About 600 of the 3,000 members of the University of Chicago’s business incubator, The Polsky Exchange, hail from the neighboring community and have no previous affiliation with the university. Many of these start-ups are tech and product design businesses. Through its work with Chicago Anchors for a Strong Economy (CASE), the University of Chicago’s Office of Civic Engagement reaches other neighborhood-based businesses as well, about 300 thus far, to align the university’s purchasing and hiring with the needs of the community. As one company represented at the symposium noted, this program not only doubled her business with the university, it enabled her to hire more workers from the surrounding neighborhoods. While getting capital and financing remains a challenge for many small businesses in the area, one of the few remaining black-owned banks in Illinois, Illinois Service Federal Bank, continues to operate in Chatham and surrounding neighborhoods, and provides business customers, at no cost, with technical assistance for preparing social security taxes, financial statements, and quarterly employment taxes. Loan funds and micro-finance groups including the Chicago Neighborhood Initiatives, The Chicago Community Loan Fund and others are also lending to small businesses in Chatham, Auburn Gresham and other south side neighborhoods.

Video Highlights: Session 2 (part B)

Alyssa Berman-Cutler, Director of Business and Workforce Development, Office of Civic Engagement at the University of Chicago >>

Jackie Dyess, President, Inner City Supply Co. Inc. >>

Robert Klamp, CEO, Illinois Service Federal Savings & Loan >>

Session 3: Challenging inequality, driving economic growth

Good neighborhoods require a strong middle class, decent schools, good quality housing and a strong small business base. – Andrea Zopp, Deputy Mayor City of Chicago

While acknowledging the scope of the challenges before them, civic leaders have been working on a series of initiatives for increasing investment in south side neighborhoods.  These include The Neighborhood Opportunity Fund to which businesses along designated (underinvested) corridors can apply for money to promote commercial and cultural projects; The Chicago Community Catalyst Fund (also called Fund 77), a “fund-of-funds” administered by a board of trustees acting as investment managers, that uses $35 million in public money to leverage investment dollars from the private sector; and Benefit Chicago, a vehicle for providing loans and investments to mission-oriented businesses and social enterprises funded by foundations and social impact investors. The Chicago Community Trust (CCT) and other philanthropies provide capital to alternative and higher-risk projects aimed at stimulating revitalization. This includes CCT’s On the Table project that facilitates conversations between people who do not typically meet each other in their everyday lives, and thereby draws in the voices of community members who are often left-out of economic development planning. More than ever, these projects are taking into consideration their effects on inclusiveness and marginalization; and they are taking place at a time when decision-makers increasingly recognize that social capital – relationships and networks with business leaders and policymakers – can be as powerful as the financial capital that advocates seek for Chatham and the surrounding communities.

Video Highlights: Session 3

Congressman Bobby Rush, U.S. Representative, 1st Congressional District Illinois >>

Rick Mattoon, Senior Economist and Economic Advisor, Federal Reserve Bank of Chicago >>

Andrea Zopp, Deputy Mayor and Chicago Neighborhood Development Officer, City of Chicago >>

Terry Mazany, President and CEO, Chicago Community Trust >>

Michael Sacks, Vice Chairman, World Business Chicago >>



[1] The Community Development and Policy Studies department of the Federal Reserve Bank of Chicago has long been interested in understanding the utilization of financial services and credit access in black Neighborhoods of Chicago and the Seventh Districts. See for example Bond and Townsend (1996) Formal and Informal Financing in a Chicago Ethnic Neighborhood, Economic Perspectives, July/August.
[2] For additional analyses of data on key themes related to neighborhood demographics, employment, business and credit conditions in Greater Chatham, see Newberger, Robin and Maude Toussaint-Comeau, “Reinvesting in the Greater Chatham African American neighborhoods in Chicago: New data and Insights from Practitioners,” ProfitWise News and Views, Issue 3, 2017, forthcoming.
[3] See “Economic Opportunity in Greater Chatham,” presentation by Gretchen Kosarko, RW Ventures.
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2017 NHS Community Banks Partnership Meeting Summary

By Kelly Pearson and Jason Keller

2017 CBP Meeting Speaker Photo

The Community Development and Policy Studies (CDPS) division at the Federal Reserve Bank of Chicago has a longstanding interest in community banks, current regulatory developments, and the ways smaller banks adapt to environmental changes, such as the high rates of vacant properties in Chicago’s low- and moderate-income neighborhoods. As the landscape of community reinvestment and revitalization evolves, community banks and their partners must work together to respond to the needs of the neighborhoods they serve.

Neighborhood Housing Services of Chicago (NHS) held its annual Community Banks Partnership Meeting (the Partnership) earlier this year at the Federal Reserve Bank of Chicago. The meeting brought together over 70 community bankers, regulators, housing experts and industry partners to discuss current trends in housing, specifically how to convert vacant properties into neighborhood assets. NHS is a nonprofit organization driven by the belief that homeownership is essential to strengthening households and communities.[1]  Established in 2007, the Partnership is an innovative collaboration that supports NHS’ community reinvestment programs and services through financial support, lending capital, and consultation.

This year’s meeting coincided with the 40th anniversary of the Community Reinvestment Act (CRA) and the recent release of the July 2016 Interagency CRA Questions and Answers (Q&A’s).  During his opening remarks, Jason Keller, economic development director for CDPS explained that the revised guidance reflects consideration of comments from bankers, community organizations, and others and offers technical corrections in light of an evolving financial regulatory landscape. The new guidance supersedes the 2010 and 2013 Q&A’s and provides for new and revised examples of economic development, community development loans, and activities that are considered to revitalize or stabilize underserved middle-income geographies.[2]

With this context in mind, Kristin Faust, president of NHS, described the Partnership as a key group of NHS supporters who promote revitalization in neighborhoods that need it most. Faust described that sustained recovery in home values has yet to realize in some neighborhoods on the south and west sides of Chicago.[3]  Despite tough market conditions, however, NHS has seen some positive developments. Through the City of Chicago’s Micro-Market Recovery Program in the Chicago Lawn neighborhood, NHS turned 54 vacant buildings into owner-occupied housing from 2012 to 2015.[4]  In 2016, NHS started an effort to take 20 vacant properties and match them with 20 homebuyers in the Woodlawn neighborhood on the south side of Chicago. To date, NHS has surpassed its initial goal, transforming 25 vacant properties into owner-occupied homes thus far.

Turing to the morning’s panel discussion, Art Neville, vice president and chief lending officer from Community Savings Bank and past chair of the Partnership invited Allen Rodriguez, vice president of resource development, NHS Board of Directors, to the podium to moderate a panel discussion. Rodriguez introduced the panel, which included: Sarah Duda, associate director, Institute for Housing Studies at DePaul University; Rob Rose, executive director, Cook County Land Bank Authority; and John Groene, West Humboldt Park neighborhood director, NHS.

Sarah Duda shared current housing market conditions in Cook County in light of trends over the past 20 years. Using data from the IHS Clearinghouse (and other sources), she highlighted a variation in recovery across markets, with wide-ranging rates of vacancy, mortgage activity, and property values throughout Chicagoland.[5] Residential vacancy remains a legacy of the housing crisis, with 64.3 percent of long-term vacant properties being in low- and moderate-income (LMI) census tracts. Furthermore, vacancies are roughly five times more concentrated in LMI neighborhoods than in upper-income neighborhoods. In many neighborhoods on Chicago’s south and west sides and south suburban Cook County, there are clusters of home sales of $50,000 and below. Figure 1 illustrates the geographic pattern of low-value sales in Cook County in 2016. It shows that these types of sales make up a substantial portion of total sales activity in neighborhoods on the west and south sides of the City of Chicago and in the south suburban Cook County. These are typically investor sales because there are limited mortgage products available to owner-occupants to rehab them.

Figure 1: Low-value sales in Cook County (2016) [6]


Duda went on to describe how there is weak demand in some areas for housing and an increased demand in communities like Humboldt Park, East Garfield, Logan Square, and Pilsen. According to Duda, these communities have seen rapidly increasing home values since 2013 likely due to nearby amenities and available transit.

In light of stagnant housing markets with low values, low turnover rates, and high rates of vacant properties in certain neighborhoods, Rob Rose described one role of the Cook County Land Bank Authority (CCLBA) as being to generate activity in these markets.  Land banks are public or nonprofit entities that acquire, hold, develop, and dispose of vacant properties.  The mission of the CCLBA is to reduce and return vacant land and abandoned buildings back into reliable and sustainable community assets.[7]  The CCLBA was founded in 2013 and operates in Chicago and south suburban Cook County. Illinois has a lengthy foreclosure process averaging 900 days, but due to a new, expedited process, the CCLBA can sometimes clear title in 8-12 months. CCLBA has the ability to eliminate back taxes, remove fines, and liens. The CCLBA also works with local developers and organizations like NHS to build a pipeline of prepared homebuyers. Through its Vacant Lot Program, the CCLBA sells lots to residents, developers, and community groups. [8]  Uses for these lots include side yards, solar banks, and community gardens. Rose noted that community banks can support the work of the CCLBA by creating more consumer purchase/rehab loan products and more developer acquisition/rehab loan products; donating hard-to-move inventory; and by structuring deed-in-lieu transactions, discounted payoffs, short sales, and distressed note sales.

John Groene shared how NHS helps homeowners stay in their homes and prepares new homebuyers to reoccupy vacant properties in targeted neighborhood areas.  For example, in the West Humboldt Park neighborhood on Chicago’s west side, NHS organizes a network of volunteer “Block Ambassadors”: residents who canvass their blocks to identify vacant properties and reach out to homeowners at risk of foreclosure to let them know about NHS foreclosure prevention services. NHS has multiple success stories of working with partners to curb vacancies. In 2015, a family of ten in West Humboldt Park faced eviction when their landlord fell into foreclosure. Community Investment Corporation (CIC) acquired the property, and after a period of time renting from CIC and preparing for homeownership with NHS, the family purchased their longtime home, and the property never became vacant. [9]  In 2016, after a decade of a vacant property being a magnet for criminal activity, a second property was acquired by CIC then transferred to the CCLBA.  A first-time homebuyer working with NHS purchased the property in March 2017, utilizing NHS purchase rehab financing and leveraging the City of Chicago’s Tax Increment Financing (TIF) program, which provides up to $25,000 to owner-occupants purchasing vacant buildings in targeted areas.[10]  Groene closed by stating that in order to support NHS’ strategies, community banks can be patient sellers to first-time homebuyers and partner with entities such as the CCLBA and CIC when disposing of vacant properties.


By providing this annual forum, the Partnership offers lenders, intermediaries, and other interested constituents an opportunity to discuss issues central to improving lives and strengthening neighborhoods in the Chicago region. As a result of this meeting, partners are better equipped with innovative solutions that can be leveraged to address issues of vacant buildings in their communities.  By working together with nonprofits such as NHS and the Cook County Land Bank Authority, community banks can help generate renewed interest in communities that have yet to fully recover from the housing crisis.

Kelly Pearson is a senior associate, Foundation and Corporate Relations, of Neighborhood Housing Services of Chicago. She manages corporate and foundation funding partnerships for NHS, as well as the Community Banks Partnership.

Jason Keller is the economic development and Illinois state director in the Community Development and Policy Studies Division of the Federal Reserve Bank of Chicago.

[1] See
[2] To review the full Questions and Answers, visit the Federal Financial Institutions Examination Council web-site[2].
[3] See
[4] See
[5] See
[6] IHS Data Clearinghouse: Calculations of Data from Cook County Recorder of Deeds via Property Insight, Record Information Services, Cook County Assessor.
[7] See
[8] See
[9] See
[10] See


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Detroit Renter Housing Analysis: Challenges of Income and Affordability

By Taz George and Sara Cooper

Amid new efforts to preserve and expand Detroit’s affordable housing stock, policymakers and community development practitioners should continue to note the unique demographic and economic trends underlying the city’s rental housing challenges. A recent analysis of Detroit’s rental housing trends by the Community Development and Policy Studies (CDPS) division of the Federal Reserve Bank of Chicago compares the city’s rental housing market to some of its peers in the region. This analysis also shows that very low-income households with high housing cost burdens comprise the majority of the city’s renters, and suggests mixed evidence on whether household financial health is improving based on credit score data. These trends have important implications for programs and policies to improve the supply of affordable housing for Detroit’s low- and moderate-income communities.

In the city of Detroit, 66.1 percent of renter households experience high housing cost burden, meaning they spend at least 30 percent of their income on gross rent. A high housing cost burden can stretch a household’s budget for other necessities like food, transportation, and health care, and can make it challenging to save for the future.

Perhaps not surprising, due to the city’s large population loss, Detroit’s rental cost burden has been driven primarily by declining renter household income rather than mounting rental costs, compared to some other large cities in the region. Adjusted for inflation, median gross rent in Detroit increased by 15.4 percent from 1980 to 2015, a similar rate to Cleveland (11.8 percent) and Milwaukee (10.1 percent), and far less than Chicago (39.2 percent) (Chart 1). Detroit’s median renter household income, however, declined more steeply over this period than its peers, and is lower than all of them as of 2015, at just $17,239 (Chart 2). As a result, Detroit’s rate of housing cost burden is remarkably high: 66.1 percent of rental household pay 30 percent or more of their income towards rent, and 42.6 percent pay at least 50 percent or more of their income towards rent. The problem affects all ages, with over 60 percent of both working-age and senior households facing high rates of rent burden.

Chart 1


Chart 2


While it is not surprising that low-income renters are most affected by rental affordability challenges, the extent of this population’s needs in Detroit is noteworthy. Of the over 80,000 rental households in Detroit experience high cost burden, 74.5 percent have an income of less than $20,000 per year. Of this group, 7,400 households reported zero or negative income in 2015. Actions to ensure access to quality affordable housing must go alongside policies to spur economic opportunities for these households.

Chart 3


Finally, the CDPS analysis examined consumer credit conditions in Detroit for signs of changes in households’ financial health. Risk Scores, a measure of creditworthiness akin to a credit score in the Federal Reserve Bank of New York Consumer Credit Panel data from Equifax, painted a mixed picture in this regard. While the share of individuals with a strong Risk Score of 660 or greater has increased in recent years, the share with no Risk Score also grew. This suggests that while more households are gaining stronger financial footing and the ability to potentially qualify for a mortgage, another growing group of households has very limited access to mainstream financial products, and may struggle qualifying for rental housing or employment opportunities because of weak credit (Chart 4).

Chart 4


Taken together, this analysis shows the degree of need among Detroit’s low-income renters for affordable quality housing. CDPS will continue to partner with policymakers and practitioners in Detroit and across the 7th District to identify and promote strategies to address these needs.

Taz George is a research analyst in the Community Development and Policy Studies Division at the Federal Reserve Bank of Chicago. Sara Cooper was the CDPS summer 2017 intern.

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Four Videos Help Explain the Community Reinvestment Act


By Jason Keller

A series of four recently released videos commemorate the 40th anniversary of the Community Reinvestment Act (CRA). Passed in 1977, CRA “is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations.”[1]

The first video,Getting to Know the Community Reinvestment Act,” explains in practical, understandable terms the basic elements of the CRA and how regulators evaluate a financial institution’s CRA performance. It is essential viewing for anyone interested in learning about the Act. The video is also extremely helpful for those who are interested in collaborating with financial institutions to make their communities better places to live and work.



Next, Small and Intermediate Small Bank CRA Examinations,focuses on the role financial institutions of all sizes play in ensuring fair and equal access to credit throughout the country by discussing the different performance criteria applied to smaller financial institutions under the CRA.






The third video in the series, Community Development Defined in the Community Reinvestment Act,” demonstrates how partnerships between financial institutions and federal, state, and local entities can foster revitalization and stronger economic futures for families. In this episode, a fictitious institution applies the CRA definition of community development to meet local community credit and service needs.

The fourth and final video, entitled “Leading Practices for Effective CRA Programs,” highlights some of the leading CRA practices observed by members of the Federal Reserve’s community development departments. This video seeks to inform community groups, community development practitioners, researchers, educators, government officials, and others about the issues that financial institutions consider from a CRA perspective.


Together, these four videos demonstrate how the CRA brings much-needed capital into low- and moderate-income communities.

Community Development and Policy Studies (CDPS) at the Federal Reserve Bank of Chicago has a team of professionals with expertise in urban planning, public policy, finance, and law, who engage financial institutions and community stakeholders in conversations about CRA requirements, community development issues, and best practices. We serve as a conduit between financial institutions and the communities they serve throughout the 7th District by convening meetings, roundtables, and conferences, as well as publishing targeted research to engage local and regional partners in addressing community needs. To learn more about the work we do or to review other CRA-related content, visit:, the Community Development Data Guidebook, Understanding Community Development Needs through the CRA Performance Context, and A Banker’s Quick Reference Guide to CRA.

[1] See

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Looking for Progress: Connecting Opportunity to Economic Development in Lake County

By Carolyn Saxton, President & CEO, Legacy Foundation


As part of our ongoing work exploring the lessons and recommendations offered in Looking for Progress in America’s Smaller Legacy Cities: A Report for Place-based Funders, we asked some of the participants in the study: How has revitalization proceeded in your community, and how might your foundation and local partners ensure that economic growth and economic opportunity develop in a coordinated fashion? Carolyn Saxton, president & CEO of the Legacy Foundation, shares her thoughts:

During the past year the Funders’ Network’s Federal Reserve-Philanthropy Initiative conducted site visits to several industrial cities: Rochester, New York; Grand Rapids, Mich.; Cedar Rapids, Iowa; and Chattanooga, Tenn. The purpose of these visits was to explore four small cities that appeared to have experienced some measure of revitalization in the post Great Recession environment.

I was one of several community foundation leaders invited to participate in these exploratory journeys and I went to each (with the exception of Chattanooga). These trips were particularly important given Legacy Foundation’s work in four communities in Lake County, Indiana: Gary, East Chicago, Hammond and Whiting. Once a thriving center of steel production and other forms of manufacturing, Lake County has seen a loss of manufacturing beginning in the 1960s. This has contributed to the related problems of economic distress, population loss, property abandonment, and loss of municipal tax base. The effects of this decline persist into the present, manifesting in high levels of joblessness, low-performing schools, and neighborhood deterioration.

Our discussions following the four site visits evolved into debating the question of where these cities were on the arc of economic growth and economic opportunity. We generally agreed that place-based funders are central not only to advancing economic opportunity among disenfranchised populations, but to connecting opportunity-oriented programs to economic development efforts. Two current programs in Lake County reflect the Legacy Foundation’s commitment to shaping the arc of economic opportunity over the long term.

Three years ago Lake County was one of six Indiana counties selected by the state for a multi-year pilot “On My Way Pre-K”, an initiative for economically vulnerable 4-year-olds to have an early childhood pre-kindergarten educational experience.

Studies show:
• 90% of a child’s brain development occurs before the age of 5.
• Children in poverty face academic and social opportunity gaps including a lack of early exposure to language, reading and math.
• Children from low income families typically start school a year to a year and a half behind their peers. The average fourth-grader growing up in poverty is already three grade levels behind — and only half of every fourth-grade class will graduate from high school.
• This achievement gap negatively impacts the local workforce and economic development.
• Numerous research studies have demonstrated that that this gap is lessened by providing high-quality early learning environments for children who live in disadvantaged environments.

Parents from Gary, East Chicago, Whiting, Hammond and other Lake County communities select the pre-school where their child will attend from a list of qualified providers. Supplemental programs are designed to involve them in their child’s learning from kindergarten through third grade. Legacy Foundation and other funders raised the necessary funds to qualify for a state match which together totaled $3.6 million for hundreds of Lake County children and their families.  This project has a long-term waiting period to determine if the children will succeed academically, but it provides the equitable opportunity that these children would not have had otherwise.

For sustainable change to take root it is important to have those most affected to be included as partners in order to work on a resolution and address inequitable opportunities. As place-based funders, our role is to ensure that those who are experiencing the oppression are involved in developing solutions. This thought is the lens for Legacy Foundation’s Neighborhood Spotlight initiative.

Neighborhood Spotlight engages community residents through a collective impact process to develop and act on plans for transforming their own neighborhoods.  What is collective impact?  It is people sharing ideas to make their neighborhood a better place to live and work. Selected neighborhoods receive customized year-long mentoring to engage residents, business owners, and school and government personnel to gather opinions on neighborhood concerns which need improvement, such as jobs, education, and transportation. Work groups around each identified area are then convened to develop improvement goals. Ultimately the goals from each work group are brought to the larger group and an overall plan for the neighborhood is developed. Gary-Emerson neighborhood was chosen last year to take part in Neighborhood Spotlight, while the Gary-Miller neighborhood — selected three years ago — has already been executing projects. One of their action steps was to create an environment to promote and encourage entrepreneurial growth. With Legacy’s support, residents can now take advantage of financial literacy programs and small business development workshops. They have also established a small business incubator in their neighborhood. We have recently received a grant from the Regional Development Authority to support projects from their transportation plan.

So what did I take away from our visits to the smaller legacy cities we studied as part of the Federal Reserve-Philanthropy Initiative? Thinking retrospectively, I would argue that it is more than just economic opportunity that we as funders need to provide. Our role is to create a level playing field for those who are disenfranchised.  Our role is to ensure that we are providing equitable opportunity, which takes the discussion much deeper. How do we define equitable opportunity?

Here’s an illustration you’re probably already familiar with:

Three children of different heights go to a ball game. They only have standing room which is at an ivy-covered fence and none can see over the top. Each child is given a box to stand on to help with their viewing. The tallest child is in fine shape and is able to see every play.  The second child can see over the fence if he stands on his toes. The third child is still about a foot shorter than the top of the fence. He only gets a view of the ivy he faces. Equal opportunity? Yes. Each child was at the game, had a place at the fence and was given a box to stand on. Equitable? No. Each child needed a different number of boxes to see over the fence and watch the game.

If we only look at economic growth and economic opportunity, we are missing that key factor of equity.  Jobs might be available which in turn will build economic growth. But if we don’t make it possible for everyone to be prepared equitably to compete for those jobs, we will always have those left out of the recovery continuum. And we’ll always have children unable to see over that fence.

Neighborhood Spotlight and On My Way Pre-K are steps forward in providing equitable opportunity.  Neither can be easily evaluated in one, three, or even five years. But as we place-based funders make decisions, we must ensure that our lens is focused on creating an equitable environment for all.

Photo credit: The Journal Gazette

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Peer City Tool and 500 Cities Data: Mapping Trends and Challenges Among Peer Cities

Originally posted May 16, 2017 on Community Commons by Andria Caruthers

The Federal Reserve Bank of Chicago (FRBC) recently introduced the Peer City Identification Tool. The tool identifies peer or “sister” cities that are experiencing similar trends and challenges in equity, economics, and resiliency. It’s meant to provide policymakers, community advocates, and practitioners with context on how their city compares to similar cities. However, it does not mean the cities are the same, but simply highlights cities that are experiencing similar trends and challenges.

The tool was born out of a multi-year study by the FRBC to gather economic and social data on post-industrial cities across the Midwest and Northeast. As opposed to simply publishing a report, the FRBC decided to develop a mapping tool. Today, the tool provides city-level data from 300 cities across the country. Cities with available data have a median population of roughly 100,000.

Since it’s a comparison tool, leaders can see how their own assets and liabilities compare to similar cities in their region and across the country, especially among those with similar histories and challenges. Though the cities may have regional or cultural differences, their shared economic and demographic characteristics have important policy implications for decision makers and planners looking for success stories.  It’s a unique opportunity to share and learn best practices for addressing challenges at the community level.

The tool at work

In the example below, Birmingham, AL is selected as the base city. The cities highlighted in red are its peer cities.


Click image to enlarge or to enter a different city.

From there, a category like equity, resilience, outlook, or housing can be selected to see how it aligns and deviates compared to peer cities.

birm-AL-sister-cities-1024x533Click image to enlarge or to enter a different city.

The tool provides community leaders and advocates with a deeper understanding on where their city is excelling or social and economic areas that need to be addressed.

Pairing Peer Identification Tool Data with 500 Cities Data

With the recent release of the 500 Cities Project data, policymakers and advocates now have access to updated city and tract-level data for chronic disease risk factors, health outcomes, and clinical preventive services. It’s a collaboration between the Centers for Disease Control and Prevention, the Robert Wood Johnson Foundation, and the CDC Foundation.

ccMapExport-4-1018x1024Click image to zoom to specific area or to create your own map.

The Peer Identification Tool data gives a snapshot on a variety of social and economic factors among peer cities, like economic resiliency. However, to give an even more robust snapshot, 500 Cities data can be used to explore a variety of health conditions and outcomes.

For example, struggling with unemployment, precarious employment, or poverty can be a factor in higher rates of mental health issues. To explore, 500 Cities data can be brought in to compare the percentage of adults with poor mental health among these sister cities who are experiencing poorer social and economic outcomes. It’s important to note that the base city will have different sister cities in each category, though there may be some overlap.

Birmingham and its sister cities have higher unemployment (median 10.7 percent) than the US rate (4.5 percent as of March 2017), and have seen a decrease in labor share of manufacturing (median -68.8 percent) since 1970. Consequently, they have also seen a decrease in median family income (median -15.4 percent) over the past 10-15 years.

To integrate 500 Cities health-related data into the example, data on the mental health status among adults can be compared among Birmingham and its sister cities. Take a look at the comparison between Birmingham, AL and Rochester, NY mental health statuses. Both are similar in terms of labor market, racial, and socioeconomic conditions.

ccMapExport-5Click image to zoom to specific area or to create your own map.
ccMapExport-7Click image to zoom to a specific area or to create your own map.

Studies have also shown that unemployment can also lead to increased risk for stroke. A recent study looked at 40-59 year old men and women. Unemployed men had a 60 percent chance of stroke and women had a 50 percent chance of stroke- and both were more than 100 percent likely to die from it compared to those steadily employed.

ccMapExport-8Click image to zoom to specific area or to create your own map.
ccMapExport-9Click image to zoom to specific area or to create your own map.

The Peer Identification Tool goes beyond comparing cities based on proximity, culture, population size, etc. In terms of size and proximity, Nashville and Memphis look “similar”, yet are evolving in different ways. With the Peer Tool, users can dive into indicators that provide greater context into how cities have changed over the decades, where they are headed, and what challenges they are facing. By using 500 Cities data on Community Commons, you can take your research a step further to learn, share, and develop strategies based on insights you’ve discovered by comparing your city to sister cities.

To find the 500 Cities data in Community Commons, visit the Map Room and search for “500 Cities.”

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Investing in America’s Workforce

Americas-Workforce-web banner

By Jason Keller

Final revisions to the Interagency Questions and Answers (Q and A’s) Regarding Community Reinvestment were recently released[1] by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). This blog focuses on changes to the definition of community development, specifically references to workforce development or other job training programs for low- or moderate-income (LMI) or unemployed persons as qualified activities. While, activities creating and retaining jobs have long been part of the Community Reinvestment Act (CRA), this revision offers financial institutions an opportunity to focus on improving access for LMI persons to jobs or job training or other workforce development programs (such as internships or apprenticeships).

As a result of this change, as well as other national developments including the release of the Workforce Innovation Opportunity Act (WIOA) in July 2014,[2] the Federal Reserve System launched Investing in America’s Workforce: Improving Outcomes for Workers and Employers. This collaborative effort between the Federal Reserve System, the John J. Heldrich Center for Workforce Development at Rutgers University, the Ray Marshall Center for the Study of Human Resources at the University of Texas at Austin, and the W.E. Upjohn Institute for Employment Research seeks to strengthen the nation’s economic potential by approaching workforce development efforts as investments, rather than the delivery of social services. This initiative will connect businesses, government, nonprofit, and philanthropic partners to rethink policy and investments, attract new resources, and improve economic mobility for workers.

As part of this initiative, Reserve Banks hosted more than 50 regional roundtables around the country during spring 2017. These events brought together nonprofits, bankers, local business owners, government agencies, community development practitioners, researchers, philanthropists, and others to discuss two key questions:

  1. What opportunities for investment in workforce development exist and what would make workforce development more investable?
  2. How can workforce development efforts be better evaluated?

Five sessions[3] were hosted across the Seventh District by the Community Development and Policy Studies (CDPS) Division at Federal Reserve Bank of Chicago. These sessions convened more than 60 local and regional experts in workforce development from both urban and rural settings to discuss desirable outcomes, barriers to greater investment in workforce development, as well as evidence-based tools for analysis. While the sessions differed in attendee backgrounds and geographies, consistency was seen in the need for more industry-led/private sector employer-driven workforce training; a reimagined K-12 educational system that builds the skills needed for today’s technology-driven workplace; and a refocused effort to better understand the needs of millennial, older, minority, and immigrant workers. The valuable information received from these sessions, as well as those held in other regions, is currently being summarized by the Federal Reserve Bank of Philadelphia, with the key themes released this summer.

In the interim, the Investing in America’s Workforce website details how the Federal Reserve System is connecting with partners to hear the current challenges and opportunities for workers and employers and to see examples of how organizations are working together to leverage better investment in workforce systems. The resource center features publications on topics in workforce development, including Engaging Workforce Development – A Framework for Meeting CRA Obligations, authored by the Federal Reserve Banks of Kansas City and Dallas. This document is designed to give financial institutions, and organizations interested in partnering with them, tools and information to engage in workforce development activities in ways that may help fulfill obligations under the CRA.

Finally, a Capstone Conference will be held in Austin, Texas, October 4-6, 2017, and a forthcoming volume of essays will highlight successful local and regional research and analysis on related workforce development efforts.

Check back often for updates on the initiative and new research on employment, workforce development, education, and training from around the Federal Reserve System. Join the conversation on Twitter: @InvestInWork; #InvestInWork.

For more information on this initiative and other workforce development and human capital topics, please contact Jason Keller, economic development director within CDPS, at

[1] See
[2] See
[3] Sessions were held in Springfield, IL (2); Milwaukee, WI; Des Moines, IA; and Fort Wayne, IN.
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Focus on Small Business: Small Business Credit Survey Results & Small Business Week

By Emily Engel

Community Development and Policy Studies (CDPS) of the Chicago Federal Reserve, along with all the other Federal Reserve Banks in the system, is now participating in the Small Business Credit Survey. “More than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year,” according to the Small Business Administration (SBA), highlighting how small businesses are integral to achieving the Federal Reserve’s dual mandate, which includes maintaining full employment. The New York Federal Reserve recently released results for the small business survey shortly before the SBA’s small business week (#smallbusinessweek) April 30-May 6, 2017,  a national week dedicated to promoting and highlighting the work of entrepreneurs and owners.

Background on the Small Business Credit Survey

The small business credit survey collects information about business performance, financing needs, credit choices, and borrowing experiences of firms with 500 or fewer employees. Responses to the survey provide insight into the dynamics behind aggregate lending trends and noteworthy segments of small businesses. (The results are weighted to reflect the full population of small businesses. However, the survey is not a random sample. Therefore, results should be analyzed with awareness of potential methodological biases.) The survey was launched in 2014 through an effort that merged the regional surveys conducted by several Federal Reserve Banks. The 2016 Survey is the first national small business survey with involvement from all 12 Federal Reserve Banks and input from all 50 states. Over 10,000 small employer firms responded to the survey. Breakdown for respondents from Seventh District states were as follows:

7th District State Number of Respondents
Illinois 234
Indiana 120
Iowa 62
Michigan 131
Wisconsin 112

Highlights of the 2016 Findings

Employer small businesses reported that although many were profitable and optimistic, a significant majority had faced financial challenges, experienced funding gaps or relied on personal finances.

The vast majority (87 percent) of employer firms rely on the owners’ personal credit scores to obtain funding. Additionally, over 75 percent of firms with financial challenges used personal funds to address the problem, as opposed to other options such as making a late payment or cutting staff hours (see chart 1).

Chart 1


Many small business owners struggle to cover their operating expenses. Lack of access to credit often inhibits the ability to grow. These issues were even more pronounced for the smallest firms, which were less likely to receive necessary funding and more likely to rely on personal finances to operate. These findings highlight the obstacles to growth that small businesses face, and raise new questions about how to overcome them.

Only 30 percent of the firms surveyed were considered “healthy” according to the following criteria: (1) (2015) profitability; (2) low credit risk (business or owner has good or excellent credit score); and (3) growth through retained earnings (rather than owner’s personal funds or credit to fund the business), as can be seen in the image below.

FINAL Small Business Credit Survey IG

Additional reports on the 2016 Small Business Credit Survey will be released throughout 2017. These will take an in-depth look into specific types of small businesses, including start-ups, minority firms, and microbusinesses.

Background on National Small Business Week


National Small Business Week serves as the nation’s salute to the spirit of entrepreneurship and business ownership. Since 1963, the President has designated one week to recognize the contributions of small businesses to the economy. This year, the week of April 30 through May 6 is dedicated to celebrating America’s 28 million small businesses. Whether your business is just an idea or you’re looking to take your venture to the next level, Small Business Week provides useful training, networking opportunities, and special events across the country. To learn more about local SBA offices and the small business week events happening in your area, connect with your local SBA office.

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Understanding the PCIT or What do Wauwatosa and Waltham have in Common?

By Susan Longworth, Taz George, and Mark O’Dell

Peer City Identification Tool

What do Wauwatosa, WI and Waltham, MA have in common? A new online data visualization instrument from the Federal Reserve Bank of Chicago’s Community Development and Policy Studies division sheds light on common trends within groups of peer cities, sometimes revealing unexpected connections. This blog demonstrates how the Peer City Identification Tool (PCIT) can help municipalities understand key challenges and opportunities in the context of their peers.

What stands out about Wauwatosa and its peers is a median family income far higher than the median of all cities in the dataset (the “ICI-300 median”) that powers the tool. The resilience theme, reflected in Table 1 below, describes economic changes and labor market conditions, and in this case it indicates that these cities are particularly resilient. Wauwatosa and its peers have all lost manufacturing jobs at a rate similar to the ICI 300 as a whole, but overall have retained a higher level of manufacturing employment than the ICI median, and boast lower unemployment rates and higher labor force participation.  This resilience is further indicated by median family incomes that are high and growing, as opposed to declining incomes for the PCIT dataset as a whole.

Table 1: Resilience

Table 1: Resilience

Table 2: Equity


Exploring Wauwatosa’s peers through the other data themes sheds additional light on the city’s path to resilience. For example, Wauwatosa’s peers in the Equity theme (Table 2), which considers a city’s racial and socioeconomic conditions, again paint a picture that diverges from the ICI dataset as a whole. In particular, Wauwatosa’s population is highly educated, with over half of the population possessing a bachelor’s degree – the highest percentage amongst its peers. At the same time, Wauwatosa has maintained a very low poverty rate and a low wage-based Gini coefficient, reflecting low levels of inequality – something that is unusual given the high median family incomes. Notably, however, Wauwatosa is overwhelmingly white, a characteristic that drives its low dissimilarity indices, a measure of racial segregation (within communities).

Table 3: Outlook


The Outlook theme, which explores signs of a city’s demographic and economic future, adds nuance to Wauwatosa’s current conditions (Table 3). First of all, Wauwatosa is relatively small. Some might argue that its small and stable population size insulates it from the challenges experienced by places that are experiencing population fluctuations.  Others might point out that its small size limits its resources and capacity – a challenge experienced by small cities that are not so economically resilient. Wauwatosa does appear to have a relatively small percentage of “dependent” population as indicated by a lower than average percentage of families with children and a higher than average percentage of working age residents. A potential challenge to its future growth is that Wauwatosa is not attracting foreign born residents.

Table 4: Housing


Wauwatosa again demonstrates relative stability among peers in the PCIT’s housing screen, which measures housing affordability, tenure, and age of the housing stock (Table 4). A high homeownership rate, low vacancy rate and relatively low percentage of rent burdened households reflects healthy housing conditions, a not unexpected finding given a population with high incomes and low poverty rate. Of note, however, is Wauwatosa’s aging housing stock. Again, should the city decide it needs to attract new residents, an older housing stock may deter young families.

Concluding thoughts

This high-level analysis of Wauwatosa indicates a small city that is prospering. However, given that the city at some point experienced a dramatic shift in its economic landscape, as indicated by a high level of manufacturing job losses, it begs the question of how city leaders found their footing. What does the economic landscape look like today? What kinds of jobs are held by Wauwatosa residents that appear to contribute to a broad based prosperity? Is it purely its location as a wealthy suburb of Milwaukee that establishes this position of strength? Conversely, to what extent could challenges faced by Milwaukee impact the economic prospects of Wauwatosa? How is Wauwatosa avoiding the trend of increasing suburban poverty? What could be learned from / shared with other suburbs of mid-sized urban areas facing real demographic and economic challenges?

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