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Speaking of the Economy
Carrie Cook
Speaking of the Economy

Nov. 23, 2022

Connecting With Communities: An Interview With Carrie Cook

Audiences: Community Advocates, Community Investors, General Public

Carrie Cook describes the role of the Federal Reserve System in the community development sector and how the Federal Reserve Bank of Richmond partners with communities to fulfill this role. Cook became the Richmond Fed's community affairs officer and vice president of community development in May 2022.

Speaker


Carrie Cook, Community Affairs Officer

Carrie Cook

Vice President and Community Affairs Officer

Transcript


Tim Sablik: Hello, I'm Tim Sablik, a senior economics writer at the Richmond Fed. My guest today is Carrie Cook, the community affairs officer and vice president of community development for the Richmond Fed. Carrie, thanks for joining me.

Carrie Cook: Thanks for having me, Tim.

Sablik: Today, we'll be talking about the Community Development function at the Fed and your involvement in that space. First, I was hoping you could talk a bit about why the Fed focuses on community development. How did this function develop, and what does the Fed's work in this space entail?

Cook: As a system, the Federal Reserve is focused on five core functions. It's that fifth core function around promoting consumer protection and community development.

So, what does it look like to promote consumer protection and community development and why do we do that? The Community Reinvestment Act, or more commonly known as CRA, is really the underpinning legislation of why we do the work that we do. CRA is focused on expanding financial inclusion and financial access, particularly in under-resourced communities.

If you look back in the history books, you'll see what happened with redlining and what happened with communities that didn't have access to financial products or the financial marketplace and the resulting impacts that are still felt in communities today. To address that, the Community Reinvestment Act sought to expand capital [and] credit access in areas that were previously not included.

That's the focus and the heart of our work as a community development function within the system: to make sure consumers of all segments and all areas have access to financial products, have the ability to — as a household, as a community, as a region, as a business — continue to expand economic opportunity and economic mobility. That's what our group really focuses on.

Sablik: Great, thanks for that overview.

So, there's 12 different Reserve Banks — Richmond is one of them. I imagine each bank has a different approach to fulfilling the CRA mandate. What are the focus areas of Richmond's community development team?

Cook: That's a great question, Tim. We're actually, as a community development team, out now listening to communities and understanding what communities want and need and the ways in which we, as a Federal Reserve Bank, can partner.

Overall, our strategy is in three broad areas. The first area is that we conduct research on barriers to economic opportunity and economic progress. The research and the actionable insights that we can lift up from that research are the first core function of what the community development team does.

The second thing we do is we activate and strengthen multi-sector partnerships. No sector alone is going to solve the challenges that we face in community and economic development. Taking a coordinated and collective approach to addressing community development is really where we'll see greater outcomes. For example, bringing together philanthropy, bringing together nonprofit partners, bringing together financial institutions, bringing together other capital providers and sources of capital, bringing together governments and locality leaders and municipal leaders, bringing all of those stakeholders to the table in strengthening multi-sector partnerships is going to help us have greater outcomes and look more holistically at issues within community and economic development. So, that's the second thing we do is try to strengthen those multi-sector partnerships and play a role as a neutral broker in convening and coordinating different sectors to come to the table.

The third thing we do is we engage our communities through the sensing process that we have. Our outreach is about listening to community members — individual workers, but it's also about listening to organizations and doing sensing with CEOs, doing sensing with small business owners, doing sensing with neighborhood and community leaders, nonprofit leaders. So, the sensing piece and understanding what the issues are and how to lift those issues up — both in program and policy and how those things are playing out in real time every day for residents across our district — that's the third piece.

Sablik: Right.

You mentioned this coordination with other partners in our region and community. Is there also some coordination across the Federal Reserve System, and how does Richmond's work fit into a more systemwide strategy?

Cook: Certainly, there's a strategy at the system level. The Federal Reserve System, as a whole, has its strategic initiatives that are planned out for a period of time.

Right now what we're doing, Tim, is looking at the 2022-2023 strategic system plan goals and initiatives. The first one is around advancing economic resilience and mobility of low- and moderate-income households and communities. The second goal at the system level is to enhance the public's understanding of these issues and opportunities associated with economic resilience and mobility. The third goal is to inform and influence the other core functions of the Fed — around conducting the nation's monetary policy, around promoting stability of the financial system, around promoting the safety and soundness of financial institutions, and fostering payment and settlement safety and efficiency. Community development does a lot to inform the other core functions, so we take that role seriously and take our partnership with the community seriously.

Sablik: Some people may remember, or at least I certainly do, talk of the Fed's three-legged stool. I guess it's actually more of a five-legged stool nowadays.

Cook: [Laughs] One of the interesting things, as part of my core function and what our team does in community development, is we lead the Bank's Community Investment Council. That group meets twice a year to help inform and influence what's happening and give us insight from what's happening on the ground around these different issues of workforce education, labor market participation, etc.

As we were having our meeting on the campus of Howard University in Washington, D.C., Howard University's president ... Dr. Wayne Frederick, who's one of our board members, said the Fed is just not well popularized and well understood in terms of the breadth and depth of what we do. I think that was just a further charge for us to raise our voice, to amplify the work. We know that there's a lot of work to be done on demystifying for the public what we do, how we do it, and how we can better do the work together.

Sablik: You're pretty new to the Richmond Fed and you're just ramping up a lot of your work in this space. Have you already started thinking about how you would measure the impact or success of the programs that you're involved in [and] what sort of outcomes or deliverables that you might be looking for?

Cook: That's a great question, Tim. We are certainly keeping an eye towards tangible impact and outcomes, especially as we think about our Bank's high-priority objectives that we're aligning with.

I'll give you an example of some of the deliverables that we're looking towards and some of the things that we're working on. Our Bank's current high priority objective is around engaging rural areas and small towns, and getting better at understanding what the issues are, understanding what the assets and typologies are of these areas, understanding what leaders are working on and what leaders care about and what the Fed's role could be. When we think about some of those things, our deliverables are directly aligned with that.

When we look at what's happening with small towns and rural areas — the underinvestment, the disinvestment that happens oftentimes because capital is flowing to where other capital is flowing — inadvertently you get capital barriers and bottlenecks that happen in small town or rural areas. As we are a convene as I talked about earlier in strengthening multi-sector partnerships, part of our outcomes will be tied to can we help capital flow into areas where it's not flowing right now? Can we help prepare those communities to be capital ready? Can we help them with the technical assistance, the capacity? Can we bring together different stakeholders who not only help communities frame up their capital projects but [are] able to absorb the capital that would then flow into the communities and bring the stakeholders around the table?

Sablik: That's a great overview.

I was wondering if you could also give us a preview of any upcoming or current projects that you're working on that you're very excited about.

Cook: Sure, I'm happy to. How much time do you have? [Laughs] I'll give you lots of good examples of projects that our team is working on in collaboration with other system partners, but also maybe a project that we're developing more specifically for our partners across the Fifth District. Let me start with systemwide projects and giving you a little bit of insight there.

One of the projects that I'm excited about that we just finished some of the focus groups and research around is what's called the worker voices project. One of the things that we often hear as we're out in the community is that worker voices are not included enough in policymaking decisions and in informing what solutions can be brought to bear to different economic challenges. Oftentimes, we hear from, of course, CEOs and leaders of organizations, but we don't hear directly from workers on their experience within the labor market. The worker voices project sought to do exactly that.

In partnership with our other Reserve Bank colleagues around the system, we went out and held focus groups within our district to ask workers with specific demographics and specific backgrounds about their experience to understand more about how workers are experiencing the labor market and what types of things they want and need as they think about the future of their participation in the labor market.

That's one project that I'm really excited about. Fed Communities, who is a strong partner with us, is going to be lifting up that research and data and writing articles about it and sharing more on the whole what we learned from workers across the country, and how they may inform what we decide to do in terms of programming and influencing policy and influencing the other core functions of the system.

Another project that I would lift up is our work around Investment Connection. This is a program that the system is focused on. Investment Connection seeks to bring together capital-ready projects with capital providers. If there's a community development issue that's pressing and has a significant need and it's going to improve economic outcomes in an area, we want to help get those communities in front of financial institutions and in front of folks who may be looking for Community Reinvestment Act eligible projects so that they can make those investments in those capital-ready projects and help to improve outcomes.

We're not a funder, so we have to be clear about that. But we are an organization that can bring together community development capital-ready projects with financial institutions that provide capital.

The last project that I will talk about at a system level is the benefits cliff work that we're partnering on. The best way for me to explain it is it's a net loss in overall economic position for a household. For example, there's an individual in that household [and] they're earning $13 an hour. If they were to take an increase in $2 an hour to go up to $15 an hour, they would lose, let's just say, an $8,000 childcare subsidy. So, while the $2 an hour on its head may look like you're getting ahead financially and you're having a chance to improve your economic outcomes, you're actually experiencing a net reduction in your economic benefits.

Sometimes some of the policies and programs are disincentivizing workers from advancing in the labor market. We have an opportunity to dig deeper into what are those issues. Where do the benefits cliffs hit employers and employees alike? How may we lift up some solutions that support full labor market participation?

The Richmond Fed is also working on developing a very specific signature project around small town and rural communities. I can't spill all of the beans about it yet. We're looking to support rural and small town communities in the ways that they've said they want the Fed's partnership and support. They've said to us, very clearly, we want support in addressing our human capital needs — our leadership needs — but also in addressing our financial capital needs and helping to develop a pipeline of financial providers who understand more about what's happening in small towns and communities and are ready to partner and invest in small town and rural communities.

Sablik: That's great. You have no shortage of exciting work and research being done. We'll definitely put up some links to those various projects in the show notes for any listeners that want to check those out.

I'd also encourage listeners to stay tuned to the Region & Communities section of our website, Richmondfed.org, to keep an eye out for that rural-specific project that you mentioned and the other work that you and your team will be doing in the coming year.

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