A challenging time
What makes this year's event so important is that it comes at a very challenging time for the community development banking industry. Our nation's economic downturn has hit low-income communities especially hard, leaving in its wake high unemployment rates, declining property values, and high numbers of foreclosures - all of this in communities that were economically distressed even before the economic downturn started.
These conditions have in turn created new challenges for community development banks. Sadly, many have struggled and continue to struggle, and we are no longer surprised when we learn that another venerable community development bank has been consumed by the wave of closures and mergers.
So, this is a challenging time.
I noted that the title of this year's conference is "Mission and Profit - Raising the Bar," and I believe that this title raises a fundamental question that we all need to consider: Given all the very real and very serious challenges the industry is facing now, is this really the time for community development banks to be thinking about raising the bar? Is this really the time to look ahead, to be bold, and to think big?
Some people would say it is not. They would say it is time for you to take a step back and put your dreams on hold. They would say that it is time to be practical - to stick to the basics and do whatever you have to do to survive. They would say it is time to put all of this talk about raising the bar aside until another day, when the challenges of the moment have been mastered.
Now, all of this sounds very sensible. And it is.
After all, we all want the community development banking industry to master the challenges it faces. We all want your institutions not just to survive these difficult times but to prosper for generations to come.
So, of course, you have to take care of business. And, of course, you have to focus on meeting the challenges of today. You simply cannot afford to ignore them.
But does that mean you should put off thinking about ways to raise the bar and take the industry to a higher level?
I believe it does not.
I believe that at times like these - especially at time like these - when we are filled with doubt and hesitation, and can hardly make out the road before us, we cannot just stop and wait for the way to become clear. We will never move forward if we simply stand still.
No, we have to imagine a new way forward - we have to envision it.
So I believe that this is no time to turn away from the future; it is time to embrace it. It is time to open our hearts and minds to new possibilities, and to explore new ways to transform something that is merely possible into something that is real and enduring.
So, yes - absolutely - I believe that this is the right time to be thinking about raising the bar. Indeed, it is by raising the bar that you will overcome the challenges you face today.
And this conference is the perfect place to begin. NCIF has done an excellent job of identifying the most pressing issues facing the industry and providing a forum for discussing practical steps for moving forward. So this is a great opportunity for all of you to exchange views, acquire new knowledge, form new partnerships, and explore new ways to work together to build the industry.
My hope is that this year's conference will prove to be just the first of many steps that will raise the bar for the entire industry and enable all of you to reach new heights that now you can only imagine.
The case for optimism
Now, to some of you, I suspect, all of this may sound overly upbeat. Indeed, in these difficult times, you may wonder how you can even begin to raise a bar that may already seem too high.
Believe me, I understand your concern. But I also recognize that it is not only necessary for the industry to raise the bar - it is possible. I am very optimistic about the future of the community development banking industry, and I believe you can be, too. There are three reasons why I am hopeful.
The first is that I believe in the power of innovation.
The community development banking industry - in fact, the entire community development finance industry - is based on innovation. From the beginning, there has been no roadmap for our industry. We have had to find our own way, and we have, for decades now, because we have always had an amazing capacity for innovation.
I know that each of you has that capacity. I am confident that you have the ability to look inward at your own organizations and develop innovative solutions to any challenge you face - whether it is raising capital or improving the quality of management and oversight at your institution. And I am confident that you have the ability to look outward at the communities you serve and find new ways to serve them better.
I am confident because I see the power of innovation at work in community development banks every day.
I see it at work, for example, at Broadway Federal Bank, in Los Angeles. There, in response to rising delinquencies in the bank's church loan portfolio, management has developed the Faithfully Yours Church Leadership Financial Education Program, which provides training in accounting and budgeting and a variety of other financial topics to help church leaders avoid loan delinquencies and foreclosures.
I also see it at work here in Chicago, at Urban Partnership Bank. A year after the acquisition of ShoreBank, Urban Partnership is continuing ShoreBank's important mission and legacy while implementing a rigorous, new business model of its own. The bank is also developing new ways to serve its customers, including creating a state-of-the-art branch network with micro-branches in underserved communities, and opening a new financial service center for its non-profit customers.
Broadway Federal Bank and Urban Partnership Bank are just two community development banks that are using the power of innovation to raise the bar. I know many more organizations throughout the country that are doing the same.
The second reason I am hopeful about the future of the industry is that I believe in the power of collaboration.
Because community development banks are such innovative organizations, each of you has accumulated a wealth of experience that you can draw upon to guide your organizations. And when you collaborate with other community development banks - when you combine your organization's expertise and resources with those of other organizations - you extend your reach and multiply your impact.
National Community Investment Fund has long been a leader in facilitating this kind of collaboration among community development banks. This conference is just one of the many ways that NCIF enables institutions to share best practices and explore strategies for improving their financial and social performance. NCIF is also a major equity investor in community development banks across the country, including City National Bank of New Jersey, First American International Bank, and Liberty Bank and Trust, among many others.
The third reason I am hopeful is that I believe in the power of vision.
The community development finance industry is rooted in a noble vision - the idea that capital can be an instrument of compassion, a tool for uplifting the poor. To me, it is not really important where this idea came from or who came up with it first. No, what matters to me more is how the idea has grown.
What matters to me is that people all over the country - all over the world - have taken this idea and made it their own and brought it to life in their own communities. And then other people have been inspired by their work and brought it to life where they live. So, over time, this idea, this vision, has been passed on from one person to another - from one heart to another - and is still being passed on today.
I know that all of you have had that very same experience. Somehow, that vision was passed on to you and you brought it to life in your communities, and that is why you are sitting here today.
And the thing is, that whole process does not end with you. Just as surely as the vision was passed on to you, you and your organizations are passing it on to others. You cannot help but pass it on, because it is a good and hopeful vision that speaks to the heart and has the power to inspire those who will listen.
So I believe that the power of vision can help you raise the bar at your organizations. If you stay true to your vision and mission, and if you tell your story, you will find your audience and you will be heard. You will reach new audiences - social investors, foundations, institutional investors, and religious investors, as well as the growing number of people who are simply seeking fair and affordable banking services - who will share your vision and offer their support.
Working with the CDFI Fund
So I believe in the power of innovation, the power of collaboration, and the power of vision, and I believe you can, too.
I also want to assure you that, as long as you remain true to your vision and mission, the CDFI Fund will support you.
The CDFI Fund has always had a keen appreciation of the work of community development banks. And the economic downturn has made it clearer than ever just how vital your work is to the communities you serve.
We recognize that you offer a lifeline to underserved and provide the financial services and training that enable them to build wealth and begin enjoying the same kind of economic opportunities that other, better off communities take for granted. We believe that this work is worth supporting, and we support you.
In 2010, for example, we provided more than half a billion dollars in new funding for CDFI banks, thrifts, and credit unions through our Community Development Capital Initiative (CDCI). Eighty-four CDFIs in 26 states, the District of Columbia, and Guam received funding to help them support small businesses and families in communities that have been among the hardest hit by the economic downturn.
And we offer a variety of other programs to support you.
Last year, we launched a new program called the Capacity Building Initiative. Its purpose is to provide technical assistance and training to help CDFIs nationwide increase their ability to serve underserved communities. We offered the first round of training sessions earlier this year, and will be offering more rounds over the coming months. I invite you to join us.
I also invite you to look into a number of other CDFI Fund programs including:
- The Bank Enterprise Award Program, which as most of you know provides monetary awards to FDIC-insured banks for increasing their investment in low-income communities or in CDFIs. I know many of you are eagerly awaiting the announcement for the BEA awards and I can promise you that you do not need to wait too much longer.
- The New Markets Tax Credit program, which offers a way for you to attract new investment capital to your communities; and,
- The new CDFI Bond Guarantee Program, which will offer CDFIs a new source of long-term, patient capital.
And while I understand that there are certain issues that affect CDFI banks differently than other CDFIs, I still encourage you to apply to our flagship program, the CDFI Program, which provides Financial Assistance and Technical Assistance Awards to certified CDFIs each year. The new round of CDFI Program awards will open later today, and more than $100 million in awards will be available. And if you don't plan to apply this year, please consider becoming a reviewer. We can always use your expertise.
And by all means, if you haven't already, please be sure to get certified as a CDFI. It is the first step to making use of most of the programs the CDFI Fund offers.
As you can see, the CDFI Fund has a variety of ways to support community development banks. At the same time, government support is limited and can never be the entire solution to the challenges the industry is facing. This is why conferences like this are so important - it's time to think about how you can find new sources of capital, individually and collaboratively. Raising the bar, especially when balancing the safety and soundness of your institutions, requires support from multiple entities. The CDFI Fund is and should be just one resource in maintaining your bank's financial and operational strength.
Remembering why you do this
Throughout this conference, you have been exploring a variety of new ideas to strengthen your industry and your institutions. But this whole practice of raising the bar is not some kind of abstract exercise. It has tangible effects in the communities you serve, communities that need you more than ever.
I would like to share a story with you about a nonprofit organization here in Chicago called the Jewish Council on Urban Affairs (JCUA).
JCUA has worked to promote economic opportunities for disadvantaged communities throughout Chicago for more than forty years. Its current projects range from affordable housing initiatives to immigration reform to a social justice institute for teens, but the one that really caught my eye is its Jewish-Muslim Community-Building Initiative.
JCUA launched the Initiative in 2001, in response to a rise in intolerance and hate crimes against Muslims following the 9/11 terrorist attacks. Unlike many interfaith projects, the Initiative is not simply a dialogue group. Its aim is to bring Jews and Muslims together to work on local issues of mutual concern, such as protecting civil rights and undoing bigotry. Over the ten years since the Initiative began, JCUA has partnered with more than a dozen local Jewish and Muslim partner organizations to build bridges between their communities.
But in 2010, JCUA faced a new challenge. Like many non-profits, it saw its funding decline as the nation's economic downturn deepened. And as it cash-flow issues mounted, JCUA faced the prospect of having to severely cut back its programs and limit its work in communities that were and still are among the most vulnerable in Chicago.
Fortunately, JCUA had been a longtime customer of ShoreBank and had continued its relationship with Urban Partnership Bank. With two loans from Urban Partnership, JCUA has been able to continue offering its full menu of programs, including its Jewish-Muslim Community-Building Initiative.
This story speaks volumes about the impact that community development banks have in their communities. I am sure each one of you has dozens of stories of your own about customers that you have helped when they needed help the most.
This story also speaks volumes about the importance of staying true to mission. JCUA's executive director, Jane Ramsey, has said that her organization chose to bank with ShoreBank and continues to bank with Urban Partnership Bank because of their commitment to communities. Indeed, JCUA wanted a financial institution that shared its vision and mission. That was what drove its decision
So I hope that as you go forward, you will always remember why you do this work and why it is so important to the communities you serve.
And I hope that you always stay true to your vision. Your vision is what sets you apart. It is your lifeblood, the source of your strength. And it will sustain you through the most challenging times.
So may you always be guided by your vision. And may you all continue raising the bar at your own institutions, and continue working with your peers to raise the bar for the entire industry.
Thank you.