to economic activity. for example, while community banks account for just 17 percent of financial industry assets, they are responsible for some 53 percent of bank lending to small businesses. further, the health of the community banking sector has improved significantly since the financial crisis. over the past decade, the majority of community banks have maintained high common equity tier 1 capital levels — consistent with the “ well - capitalized ” designation under regulatory capital standards. though there are considerable challenges to the community bank model, these banks continue to post strong earnings, which, in turn, contribute to healthy capital accounts. in fact, given the sound condition of the banking industry, there were no community bank failures in 2018. our job now is to ensure that community banks continue to remain strong. that requires bankers and supervisors alike to stay vigilant in the management and supervision of risks facing these institutions and the community bank model. while banks are performing well and loan portfolios are growing, we want to ensure that loans are underwritten prudently. we also want bankers to actively manage concentrations of credit risk, and be mindful that strong lending activity can strain liquidity. for example, concentrations of commercial real estate are rising, and are quite high at some banks, prompting us to remind bankers of the difficulties that such concentrations presented in the past. we also continue to focus on concentrations of agricultural credit. in an ongoing effort to understand the emerging risks related to agricultural lending, the federal reserve bank of kansas city facilitates a national agricultural credit meeting semiannually. in late march of this year, the federal reserve will be hosting this meeting in washington, d. c. in april, the board will meet with the community depository institution advisory council. i view meetings like these as important learning opportunities where i can hear directly from leaders in the field about the challenges and opportunities in community banking. these meetings and direct lines of communication with community bankers help to inform one of the board ’ s primary goals of ensuring that both supervisory programs and regulations are appropriately tailored to the size, complexity, and risk of a financial institution. supervision and regulation of community banks the federal reserve and other federal banking agencies have demonstrated a commitment to reducing regulatory burden, especially on community banks, while maintaining safety and 2 / 4 bis central bankers'speeches soundness. in particular, the federal reserve has acted to implement provisions of s. 2155 that provide relief to community banks. several proposals were issued at the end of last year, and i ’ d like to encourage

jerome h powell : coronavirus and cares act testimony of mr jerome h powell, chair of the board of governors of the federal reserve system, before the committee on financial services, us house of representatives, washington dc, 30 june 2020. * * * chairwoman waters, ranking member mchenry, and other members of the committee, thank you for the opportunity to testify today to discuss the extraordinary challenges our nation is facing and the steps we are taking to address them. we meet as the pandemic continues to cause tremendous hardship, taking lives and livelihoods both at home and around the world. this is a global public health crisis, and we remain grateful to our health - care professionals for delivering the most important response, and to our essential workers who help us meet our daily needs. these dedicated people put themselves at risk day after day in service to others and to our country. beginning in march, the virus and the forceful measures taken to control its spread induced a sharp decline in economic activity and a surge in job losses. indicators of spending and production plummeted in april, and the decline in real gross domestic product, or gdp, in the second quarter is likely to be the largest on record. the arrival of the pandemic gave rise to tremendous strains in some essential financial markets, impairing the flow of credit in the economy and threatening an even greater weakening of economic activity and loss of jobs. the crisis was met by swift and forceful policy action across the government, including the coronavirus aid, relief, and economic security act ( cares act ). this direct support is making a critical difference not just in helping families and businesses in a time of need, but also in limiting long - lasting damage to our economy. as the economy reopens, incoming data are beginning to reflect a resumption of economic activity : many businesses are opening their doors, hiring is picking up, and spending is increasing. employment moved higher, and consumer spending rebounded strongly in may. we have entered an important new phase and have done so sooner than expected. while this bounceback in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check. while recent economic data offer some positive signs, we are keeping in mind that more than 20 million americans have lost their jobs, and that the pain has not been evenly spread. the rise in joblessness has been especially severe for lower - wage workers, for women, and for african americans and hispanic