lael brainard : modernizing and strengthening cra regulations hearing from community banks speech ( via webcast ) by ms lael brainard, member of the board of governors of the federal reserve system, at the virtual independent community bankers of america fall leadership meeting, 1 october 2020. * * * thank you for inviting me here today to take part in your fall leadership meeting. 1 we recognize that community banks play a vital role in the communities you serve. your insights into local conditions and your long - standing customer relationships afford you a deep understanding of the needs and characteristics of the households and small businesses in your communities, and enable you to meet their credit needs effectively. the value of these relationships has never been more evident than during this crisis — a fact that my colleague, governor michelle bowman, highlighted yesterday when she said “ it is no surprise that community banks are standing shoulder to shoulder with their customers, on the front lines. ” governor bowman referred to an independent community bankers of america ( icba ) report that cites preliminary data on the paycheck protection program that community banks have been the main source of lending for minority - owned small businesses during the pandemic and noted the same is true for veteran - owned businesses. 2 as you know, last week, the federal reserve board unanimously voted to approve an advance 3 the notice of proposed rulemaking ( anpr ) on the community reinvestment act ( cra ). anpr is built on ideas advanced by stakeholders. throughout this process, the icba has been an important source of information, which has provided the federal reserve valuable insights into the unique role and needs of community banks as you invest in your communities. we have benefited from the icba ’ s engagement on cra both in the form of detailed comment letters and through a number of meetings to discuss different aspects of cra reform. we thank you for your robust engagement and trust that you see your input reflected in the anpr. throughout our outreach, we consistently heard from both bankers and community groups that they value the cra and that they want to see it improved and updated. this was important feedback as we contemplated how to modernize the regulations, while still staying true to the core purpose of the statute to meet the broad range of banking needs in low - and moderateincome ( lmi ) communities and address inequities in credit access. our first major goal for the anpr was to strengthen the regulations in alignment with the cra statute. this

, " an historical perspective on the crisis of 2007 - 2008, " nber working paper series 14569 ( cambridge, mass. : national bureau of economic research, december ). a discussion of such issues and their implications for macroprudential regulation can be found, for example, in markus brunnermeier, andrew crockett, charles goodhart, avinash d. persaud, and hyun shin ( 2009 ), " the fundamental principles of financial regulation, " preliminary conference draft, geneva reports on the world economy ( geneva, switzerland : international center for monetary and banking studies, january ). ( note : this paper is a preliminary version of a forthcoming report in the geneva reports on the world economy series ; the paper was prepared for presentation at a conference in geneva on january 24, 2009 ).