The Federal Reserve Bank of Dallas has just published Closing the Digital Divide, which the Bank’s President calls “a toolkit for bankers seeking to bring digital opportunity to underserved, rural and tribal communities through access to high-speed broadband. Bank investments as well as partnerships with local governments, nonprofits and educational groups can help ensure equitable access to the growing digital economy.”
The new document’s primary author is Jordana Barton, senior advisor for Community Development at the Bank’s San Antonio Branch, who previewed much of its content in a presentation at NDIA’s Net Inclusion Summit in May. Its purpose is to educate commercial bank leaders about importance of digital inclusion to low and moderate income communities, explain the basic elements of community digital inclusion strategy, and show how investments and grant support for such strategies can get banks credit toward their Community Reinvestment Act obligations.
The CRA provides a significant opportunity to help close the digital divide across communities while simultaneously benefiting financial institutions and improving economic stability. The CRA is a law that encourages banks to make loans and investments and provide services to LMI [i.e. “low and moderate income”] communities. The law was passed in 1977 to address redlining—the denial of credit to individuals based on where they live. Every year, the CRA helps bring more than $100 billion in capital to LMI communities across the country. The law is intended to be broad, flexible and responsive to changes within communities.
Barton points to community investment areas that are already recognized as priorities by Federal CRA regulators, in which digital access and skills (or the lack of them) have become critical factors. These areas include broadband connection infrastructure itself, as well as workforce development, education, access to financial services, small business development and access to health services — all heavily affected by community residents’ digital access and skills.
Closing the Digital Divide is written mainly for bankers, and will be the subject of events for local lenders put on by various regional Federal Reserve Banks in coming months. But it’s also an invaluable introduction for digital inclusion leaders, practitioners and funders to the Community Reinvestment Act and its potential importance to our work.