Our Mission Includes Community Development
By Jack Guynn
Our Vision is more than a collection of words. It drives our existence. As the nation's central bank, we are committed to meeting this ideal in all three areas of our work: financial services, monetary policy, and supervision and regulation. Most importantly, we strive to ensure that the entire organization, from our boards of directors to every staff member, is committed to these goals.
Of course, determining the best course of action to meet public interest considerations is not always easy and can be controversial. Making recommendations to the Federal Open Market Committee (FOMC) to fight inflation, for example, requires extensive research and sensitivity.
Or, changes to bank regulations or examination procedures to ensure appropriate consumer protections may cause increased compliance burdens on financial institutions.
All of us at the Reserve Bank recognize the sensitive nature of the work we do, and we know that the way we conduct our business can have a significant impact on our communities.
For this reason, we are structured to ensure that a fair representation of interests has meaningful input into our operations. This representation is not only included among our staffs, but our board members as well.
In fact, because our boards of directors include people who work directly with community development practitioners and policymakers, we are able to stay abreast of issues that are important to your work. As you know, community development is a critical component of our own mission.
Soon after our creation as an independent public institution on December 23, 1913, our role as the central bank began to expand beyond the initial requirement "to furnish an elastic currency, to afford a means of rediscounting commercial paper, [and] to establish a more effective supervision of banking."
The Federal Reserve Act also specifies that when conducting monetary policy, we should promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
In addition to maximum employment, we are charged under various laws with promoting affordable housing, with implementing a variety of consumer protection laws to prevent unscrupulous lending activities, and ensuring access to credit in all communities, including low- and moderate-income areas.
To accomplish this broad mission of promoting small business opportunities, addressing affordable housing needs, and supporting other community development activities, one of our three divisions - Supervision and Regulation - has a number of trained examiners responsible for reviewing and encouraging bank loan and investment activities.
Many of these activities require us to forge public/private partnerships with community development professionals, to develop and implement specialized training to overcome barriers to credit access, and to promote effective programs through publications such as this newsletter. Our Community Affairs section is charged with meeting this mandate.
But promoting community development is not restricted to one section of the Reserve Bank. By its nature, it is a part of everything we do.
The Federal Reserve Bank of Atlanta is made up of a head office with branch locations in Birmingham, Jacksonville, Miami, Nashville, and New Orleans. These sites are critical to ensure the smooth functioning of our payments system by providing financial institutions with currency and coin, processing checks, and obtaining vital information about the local economies, especially economic intelligence that helps us formulate sound monetary policy recommendations.
For example, when reviewing economic activity in the District, it would not be uncommon for our directors to discuss the level and trend of consumer debts, bankruptcies, housing starts, and retail sales, all of which have a direct impact on community development loan and investment activity.
And our Directors call upon industry officials, government agencies, and financial institutions to gather anecdotal information to supplement the economic and statistical information we generate in an effort to ensure we make sound monetary policy recommendations.
Further, with board members providing information from each of our branch locations, our senior management is able to gather information about local economic conditions, of new development activity in our District, and pending problems that warrant concern and action.
Fortunately, the approach works well. Besides having dedicated staff throughout the District, the structure allows business and community leaders who serve on our Boards, and others who do not currently serve, an opportunity to contribute in a meaningful way to the activities of the central bank.
A few of the community development leaders who serve on our boards of directors are featured in this issue of Partners.
Of course, our commitment to community development activities goes beyond this newsletter. We also sponsor conferences, seminars, and workshops. And our trained staff provides technical assistance to community development practitioners through the Community Affairs section.
This commitment to public service is incorporated in our Vision Statement and is ingrained in our employees as well as our board members.
We are proud of the District in which we live and work, and pledge to continue our efforts to meet your appropriately high level of expectations. It is, after all, our Vision.