December 10, 2023

Using the CRA to Promote Digital Equity: May 14-15, 2019

Author: JimS
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By Vic & Bonnie Sutton

Ways to use the Community Reinvestment Act (CRA) to persuade banks to invest in projects to promote digital equity was the central focus of a meeting of the National Collaborative for Digital Equity (NCDE), held in Washington, DC, on 14-15 May 2019.

The meeting was hosted by the National Education Association and brought together some 70 participants from across the country.

The CRA is a federal statute enacted in 1977. It requires the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Controller of the Currency (OCC) to encourage financial institutions to help meet the credit needs of the communities in which they do business, especially in low- and moderate-income neighborhoods. 

Dr. Robert McLaughlin, executive director of the NCDE, pointed out that over the last 42 years banks have invested some 3 trillion dollars in community projects.

However, he pointed out that digital equity needs an integral approach to address the issues of access, ownership of devices, and training. Libraries played a crucial role in getting the word out.

Dr. McLaughlin also asked: how can we move from compliance with the CRA to impact? and how can we foster a research agenda to measure impact?

Krista Shonk, from the American Bankers Association, observed that, in recent years, broadband has been transforming our lives. However, broadband access still tends to lag behind for poor communities and rural populations.

And Barry Wides, Deputy Comptroller for Community Affairs at the OCC, pointed out that it is essential that people have access to the Internet to be able to do their banking, especially in rural areas.

A lack of access and a lack of skills prevent people from taking advantage of economic opportunities.

A number of initiatives to address these problems were presented. They include Capital One’s “Future Edge” project, which is providing $150 million for community projects in low- and moderate-income communities; the “Connect Home” initiative of the Department of Housing and Urban Development; and a Wells Fargo initiative in San Antonio, which is providing $125,000 to help bridge the digital divide.

Jeanne Milliken Bonds informed the meeting that the Federal Reserve organizes training sessions for bankers on workforce development. In her view, the banks are genuinely interested in funding innovative CRA projects.

The meeting was reminded that the digital divide is still a real challenge, since:

  • 44% of households earning less than $30,000 lack broadband;
  • 46% of households lack a computer at home;
  • 24% have only one Internet-capable device in the household; and
  • 50% of students are unable to do homework because they lack home broadband and a computer.

Workshops explored ways to address these challenges. They focussed on fostering research and evaluation of CRA initiatives; aligning funding support for educational equity; fostering statewide initiatives for digital and economic inclusion; building capacity for technical and librarian support; improving collaboration among resource providers; and developing educational system and bank partnerships.

The recommendations from the workgroups included proposals for a number of tool kits to brief community-based organizations, schools and others about the CRA and the funding opportunities that it afforded; and a proposal to build a directory of people with the expertize to be able to advise how best to approach the banks with a CRA funding request.

As Dr. Paul Resta, from the University of Texas, Austin, put it: we need case studies to measure the impact of CRA projects and a central respository of information. And there is a very real need to invest in technology in order to promote economic opportunities.


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