Putting the Community Reinvestment Act to Work
Banks can play an important role in building a strong workforce for their local economy. A new resource from the Federal Reserve Banks of Dallas and Kansas City,Engaging Workforce Development: A Framework for Meeting CRA Obligations, provides banks, and organizations interested in partnering with them, information and tools to engage in workforce development activities.
“Workforce boards and local financial institutions share a common goal of increasing the overall wealth and economic well-being of a community,” said Keith Lawing, president and chief executive officer of the Workforce Alliance of South Central Kansas. “It is critical for local workforce boards to develop strong relationships to maximize the impact of employment and training funding, and the opportunity to strategically align resources with banks and the financial industry should be vigorously pursued.”
Workforce Development and the Community Reinvestment Act
Workforce development is an activity that may help banks fulfill their obligations under the Community Reinvestment Act (CRA). The CRA was enacted in 1977 to ensure that banks meet the credit needs of all segments of their community(ies), including low- and moderate-income neighborhoods and individuals. Workforce development can be an eligible activity under the CRA. Recent guidance states that “creating or improving access by low- or moderate-income persons to jobs or to job training or workforce development programs” may be considered an eligible economic development activity.
While banks often are involved in local workforce development efforts in their role as employer and community anchor, the CRA provides an additional incentive for involvement.
Ron Painter, chief executive officer of the National Association of Workforce Boards, said, “The CRA resources, along with a closer working relationship between workforce boards and the banking community, are an important part of the financial and analysis resources necessary for communities and their people to prosper,”
Information and resources to put to work
This guide provides bankers and their partners:
- An overview of the workforce development system and strategies
- A list of common questions about CRA and where to find detailed answers
- A process for identifying and assessing workforce development opportunities that aligns with a bank’s community reinvestment strategy
- A template for providing program information to examiners and other stakeholders
- Resources and activities from leading workforce development organizations
- An extensive listing of workforce development organizations, including a synopsis of activities and checklist of how they are involved in workforce development
The guide also includes case studies of ways banks are engaging in workforce development. These case studies represent potential opportunities for banks and partners to consider as they develop their programs and include:
- CAP Tulsa (Tulsa, Okla.): Helps low-income families with young children achieve economic self-sufficiency.
- Mi Casa (Denver): Serves 18- to 55-year-olds in low-income households whose goal is to obtain middle-skill jobs that offer a career pathway with upward mobility.
- Per Scholas (Atlanta; Cincinnati; Columbus; Dallas, New York, Washington, D.C.-Maryland-Virginia): offers full-time, tuition-free information technology training to individuals who are unemployed or in low-wage jobs.
- Skill QUEST (Dallas): An outgrowth of Dallas Area Interfaith that aims to lift workers out of poverty and into living-wage careers.
- Year Up: A national nonprofit organization focusing on workforce development, which operates in 18 U.S. cities.
New perspectives for new partnerships
Bankers and their partners both will find new perspectives in this guide on the workforce development field and how they can partner together to support their local economies. For additional information about this guide and how the CRA can be leveraged to support workforce development programs, contact Steven Shepelwich.