Connecting to the community is vital for bankers working to identify Community Reinvestment Act (CRA) opportunities, but it’s important to do that efficiently. Most CRA officers have limited time to spend. The Kansas City Fed’s 2024 CRA Officer Survey found that 68% of respondents spend less than 25% of their time on CRA-related activities due to other work responsibilities.
Joshua Smith, New Mexico regional president, Washington Federal Bank (WaFd Bank), counsels CRA officers to leverage their resources and time to identify prospective CRA-eligible opportunities. Smith’s career in commercial banking began in 2007. His main areas of expertise are multi-family housing, investor-owned commercial real estate, and business banking.
Smith suggested that new CRA officers and other bankers identifying CRA opportunities get involved “and identify opportunities to support community development financial institutions (CDFIs) and other community and economic development organizations, provide financial education and get your bank leadership and team members involved in the community.”
The CRA regulation includes service opportunities as one element. To address it, bankers can share their expertise on boards and in other volunteer roles. “Provide support as a consultancy as needed by the organization,” Smith said. Smith serves on the boards of the Urban Land Institute and the New Mexico Small Business Investment Council (NMSBIC).
The CRA responded to generations of discriminatory restrictions written into policies around lending and investment in the United States. These restrictions meant low- and moderate-income areas often lacked access to credit from banks. In response, Congress passed laws to promote fairer lending and investment and, in 1977, passed the CRA to encourage banks to meet the credit needs of their communities, consistent with safe and sound operations. To learn more, see External LinkCRA OneSource.
Smith also suggested getting to know organizations that have an impact and leveraging that knowledge in collaborative ways to generate even greater impact. For example, serving as board chairman of the NMSBIC has allowed Smith to get closer to organizations, to look through the window of different business ecosystems that he would not be exposed to otherwise. As a result, he’s seen sites for commercial kitchens, machine shops building components, and other initiatives.
Investment Connection: About relationships, not transactions
Investment Connection has been a helpful resource for Smith, who has attended Investment Connection New Mexico since its inception. Investment Connection brings community and economic development organizations together with the funding community, both in-person and online.
Smith said he always finds connections to consider, many of which align with his bank’s CRA-related needs and interests. “The bank touches so many areas of focus for lending and makes investments and grants, and provides services in affordable housing, small business development, community facilities and services,” Smith said. Simultaneously, they can identify ways for WaFd Bank team members to share their expertise in community development services.
“Many organizations we’ve met through Investment Connection have become bank customers, so we develop long-term relationships versus just a single transaction,” Smith said. The relationships have led to ongoing growth and consistency with community partners, which helps the broader community.
It all starts with networking
In his role with the NMSBIC, Smith works closely with NMSBIC’s executive director and investment advisor, Russell Cummins. Cummins is also a regular attendee at Investment Connection New Mexico.
Cummins said he values the Investment Connection meetings. In addition to the presentations, he said, it’s allowed networking with individuals from banks, nonprofits, and economic development organizations.
After one of the Investment Connection meetings, Cummins said, “I had a good conversation with someone from the New Mexico Economic Development Department about using part of New Mexico’s State Small Business Credit Initiative (SSBCI) federal grant funds to help CDFIs in New Mexico.” (More on SSBCI at External LinkNew federal funds bring significant impact for small business lending - Federal Reserve Bank of Kansas City.)
Investment Connection brings WaFd face-to-face with B:Side
“I’m also able to see and talk with some of our existing mission partners in attendance,” Cummins said. One of these is B:Side, a small business lender and CDFI. “We were having Zoom meetings with B:Side about a new partnership with NMSBIC, and the Investment Connection meeting was the first time I met people from B:Side face-to-face.” B:Side received $1 million in funding from NMSBIC.
It’s more than loans and investments. WaFd Bank and B:Side also started to collaborate on SBA 504 loans and client referrals, as the bank does with CDFIs like DreamSpring, The Loan Fund and WESST for small business lending. According to Smith, these are additional ways for bankers and CRA officers to get engaged with their community, which is good for the bank and the community.
Investment Connection connected WaFd Bank with Homewise, an affordable housing developer based in Santa Fe, with developments in Albuquerque, New Mexico.
Investment Connection connects bank with conversion of historic theater
Homewise is an affordable housing developer based in Santa Fe with developments in Albuquerque. Its team pitched the Orpheum Apartment Repair and Renovation Project at Investment Connection. WaFd Bank provided a $2.3 million loan for the development.
According to Johanna Gilligan, chief external affairs officer for Homewise, the funding allowed them to take an underutilized but historically important building in Albuquerque’s Barelas neighborhood and convert it to their Homewise Homeownership Center. Homewise offices occupy the first floor. That is where they host community events such as a monthly art opening in the conference room, and classes in the classroom/theater space. Upstairs, there are 19 affordable residential units.
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Other resources
External LinkCRA OneSource is your source for CRA tools, templates, guides, and webinars to assist you with your CRA needs.