Community development Off-site link is one of the Federal Reserve's core functions as the US central bank. It's an important responsibility of the Federal Reserve that is rooted in its mandates from Congress. Community Development (CD) works to understand the economic experiences of lower-income households and communities to help build a stronger economy for all Americans.

  • We listen to better understand how economic conditions are impacting consumers and workers in urban, suburban, and rural communities across the district.
  • We conduct research and share information to inform local efforts to promote economic opportunity.
  • We convene and connect local stakeholders, including financial institutions, local nonprofits, and funders to identify emerging issues and opportunities to collaborate.

These efforts contribute to a strong economy and financial system so people in every community have opportunities to participate and prosper.

Supporting the Federal Reserve's supervisory and monetary policy roles
The community development function Off-site link arose from the Federal Reserve's responsibilities as a bank supervisor and regulator. As part of regulating and supervising banks, the Fed helps ensure they comply with fair lending laws and the Community Reinvestment Act Off-site link (CRA).

Under the CRA, banks are required to meet the credit needs of residents and businesses in the communities where they operate, including low- and moderate- income (LMI) and underserved rural areas. To support these efforts, community development staff conduct research and outreach to understand economic, financial, and community conditions.

The insights we gain about the economic and financial conditions of LMI people and places also help to inform Fed leaders on monetary policy decisions that support a strong economy. The Federal Reserve has a mandate from Congress to promote maximum employment and stable prices. To meet these policy goals, we must understand how people from all walks of life experience the economy and how policy decisions affect their experiences.

Responding to local needs through regional Reserve Banks
Each Reserve Bank tailors its community development activities to respond to the economic needs of the region it serves. Our CD staff is comprised of researchers and other specialists who work on a wide variety of issues. Examples include workforce development, housing, access to financial services, small business development, and economic development in urban, suburban, and rural communities.

System resources:

How we define low- and moderate-income communities: Under the CRA, "low- and moderate-income" or LMI, refers to communities that in certain geographies have income levels that fall between certain ranges, as determined by the Census Bureau. A low-income community means a median family income of less than 50 percent of the area median income. A moderate-income community means the median family income is at least 50 percent and less than 80 percent of the area median income.

How we define underserved rural areas: Under CRA, the definition of "community development" includes activities that revitalize or stabilize "distressed or underserved nonmetropolitan middle-income geographies" as designated by the agencies based on: (1) rates of poverty, unemployment, and population loss; or (2) population size, density, and dispersion.

How our community development work informs monetary policymaking: Understanding how people experience the economy is important for effective policymaking. The Fed analyzes a breadth of quantitative data, including those describing differences in income, wealth, employment, and other factors to understand implications for the economy. Real time conversations with people also help to see what may be coming around the corner. Both data and listening to the communities we serve provide a more complete picture of economic conditions on the ground.

How our community development work helps banks with CRA compliance: The Federal Reserve's community development activities help banks understand the financial and credit needs of local communities and find ways to meet CRA requirements that support the economic vitality of all communities, including LMI households and small businesses.