Community development is one of the Fed’s core functions as the U.S. central bank. Community development work helps improve economic outcomes in low- and moderate-income communities. It’s an important responsibility of the Federal Reserve that is rooted in its mandates from Congress.

These efforts promote a healthy economy and a strong financial system and aim for people in every community to have opportunities to participate in the economy and prosper—including those who may face barriers related to income, race, ethnicity, gender or geography.

Supporting the Fed’s supervisory and monetary policy roles

The community development function arose from the Fed’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 (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) neighborhoods. To support these efforts, community development staff conduct research and outreach to understand community conditions, financial access, and economic disparities.

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 Fed 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.

Community Development in the Seventh District

All twelve Federal Reserve Banks, including the Chicago Fed, work with a broad range of community partners to help expand access to economic opportunity and improve outcomes for lower-income people. We bring people together to identify key challenges and practices to address them. We conduct and share research, and we identify emerging issues that affect underserved populations.

Each Reserve Bank tailors its community development activities to respond to the economic needs of the region it serves. In the Seventh District, the community development staff at the Chicago Fed works on a wide variety of issues. Examples include workforce development, affordable housing, access to financial services, small business development, child care access, lead service line replacement, and other efforts to revitalize urban or rural communities.