Banks, broadband and CRA – financing innovation opportunity

Can banks meet Community Reinvestment Act (CRA) obligations by helping address high-speed broadband gaps and the digital divide? Participants in a recent Federal Reserve webinar said yes and provided tips on how.

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 and the webinar explained how financing broadband initiatives would qualify as an economic development tool that meets the CRA service tests. Our communities would benefit on a number of fronts.

As widespread negative reaction to the recent Federal Communications Commission ruling on net neutrality reveals (at least 50 senators have signed on to legislation to overturn the FCC decision), many people are recognizing access and affordability to high-speed broadband are fundamental requirements for communities seeking to sustain their positions in the economy, let alone improve them.  From basic education to workforce development and retraining to community service delivery and health care as well as personal finance management and commerce, broadband accessibility defines the minimum level of participation in an innovation-based economy.  

The Federal Reserve webinar points out that low-income neighborhoods and rural populations see lagging access to broadband service across the country. Cities with 30 percent or more of households without internet access include Detroit, Miami, Cleveland, New Orleans, Buffalo, Memphis, St. Louis, Milwaukee, Baltimore, Cincinnati, Toledo, and Philadelphia. For many rural areas the problem is even greater. CRA, the webinar’s panelists explain, provides a financing vehicle to begin to address this problem.  Access to the archived copy of the hour-long webinar, which includes specific resources for using CRA to broaden innovation opportunity in your region, is available here.