Embed Size (px)
Citation preview
ENTER TITLE
Enter Subtitle
Financial Institutions'
Engagement in
Workforce Development
Strengthening partnerships between banks and
workforce development stakeholders to access
Community Reinvestment Act qualified loans,
investments, and services
National Association of Workforce Boards
March 25, 2018
NAWB Presentation: 2/25
Financial Institutions' Engagement in Workforce Development
Presenters
• Stuart Andreason Director, Center for Workforce and Economic Opportunity
Federal Reserve Bank of Atlanta
• Jason KellerEconomic Development Director
Federal Reserve Bank of Chicago
• Steven ShepelwichSenior Community Development Advisor
Federal Reserve Bank of Kansas City
• Keith LawingPresident & CEO
Workforce Alliance of South Central Kansas Inc.
NAWB Presentation: 3/25
Agenda
• Panel Introductions
• Understanding the Federal Reserve’s Community Development Function
• Investing in America’s Workforce Initiative
o The Research
o Promising Strategies
o Opportunities for Investment
• Linking Workforce Development to The Community Reinvestment Act (CRA)
• A Framework for Complying with the CRA
• What Workforce Boards Need to Know about the CRA
• Words from a Practitioner – The Workforce Alliance of South Central Kansas, Inc.
• Conclusion/Questions
Financial Institutions' Engagement in Workforce Development
NAWB Presentation: 4/25
Standard Disclaimer
• The views expressed in this presentation are those of the authors and do not
necessarily represent those of the Federal Reserve Banks of Atlanta, Chicago,
Kansas City or the Federal Reserve System
• This presentation and the information presented herein is intended for
informational use and is not legal advice
NAWB Presentation: 5/25
Understanding the Federal Reserve’s Community Development Function
• Community Development Offices reside all across the United States:o 1st District:---------------- Boston
o 2nd District:--------------- New York
o 3rd District:---------------- Philadelphia
o 4th District:---------------- Cleveland
o 5th District:---------------- Richmond
o 6th District:---------------- Atlanta
o 7th District:---------------- Chicago
o 8th District:---------------- St. Louis
o 9th District:---------------- Minneapolis
o 10th District:--------------- Kansas City
o 11th District:--------------- Dallas
o 12th District:--------------- San Francisco
o Board of Governors:---- Washington D.C.
• Mission:
o To support the Federal Reserve System’s economic growth objectives by promoting
community and economic development and fair and impartial access to credit
• Areas of focus include:
o Affordable housing
o Community development finance
o Community Reinvestment Act (CRA)
o Fair lending
o Healthy communities
o Personal financial education
o Small business/microenterprise development
o Workforce development
o Others as needed (as defined by local demographics and economic conditions)
NAWB Presentation: 6/25
Understanding the Federal Reserve’s Community Development Function
NAWB Presentation: 7/25
Investing in America’s Workforce Initiative
• Federal Reserve System collaboration began in 2016
o John J. Heldrich Center for Workforce Development
o Ray Marshall Center for the Study of Human Resources
o W.E. Upjohn Institute for Employment Research
• Explore regional aspects of improving workforce outcomes and investments
o The Research (2017)
• National Conference in Austin, TX (October 2017)
• Book launch (Mid-year 2018)
• Targeted outreach to bankers, examiners, practitioners, government officials,
academics, etc.
NAWB Presentation: 8/25
The Research
• Federal Reserve System Collaboration began in 2016
o 50 Listening Sessions in 2017
o 32 States
o 1,000 Workforce Development Leaders
• Current challenges
o Non-skill related barriers
Addiction
Incarceration
Childcare costs
Transportation
Housing
o Technological advancement and automation’s impact on employer demands
o Quality of available jobs impeding economic mobility
NAWB Presentation: 9/25
Promising Strategies
• Better alignment of workforce and economic development efforts using sector strategies
o Intermediaries to broker relationships between employers and training providers
• Apprenticeships and other work-based training models
• Increased employer training for incumbent workers
• Increased coordination among service providers and with funders
• Changes in employer behavior that improve job access and quality while contributing to
business performance goals
NAWB Presentation: 10/25
Opportunities for Investment
• Invest in core programs and services that directly connect workers to jobs
• Direct training programs
• Career and technical education
• Employer partnerships with local community colleges
• Invest in workforce intermediaries that connect workers to jobs
• Invest in early childhood education
• Invest in community infrastructure including transportation systems and affordable housing
• Invest in efforts to increase job access and quality
• Entrepreneurship
• Small business in LMI communities
• Social enterprises
NAWB Presentation: 11/25
Linking Workforce Development to the Community Reinvestment Act
• Federal law passed in 1977
• Encourages banks to meet the credit needs of the communities they serve
• Including low- and moderate-income neighborhoods
• Consistent with safe and sound practices
NAWB Presentation: 12/25
Linking Workforce Development to the Community Reinvestment Act
• CRA focus on community development (regulatory definition)
• Four categories:
o Affordable housing for low- or moderate-income (LMI) individuals or families
o Activities that revitalize or stabilize LMI geographies; distressed or underserved non-
metropolitan middle-income geographies; or designated disaster areas (also includes
activities that help attract new, or retain existing businesses)
o Activities that promote economic development by financing small businesses and small farms
o Community services that target LMI individuals
NAWB Presentation: 13/25
Linking Workforce Development to the Community Reinvestment Act
• Definition of Economic Development
o Size Test:
Activity must finance entities that meet the size eligibility requirements of the SBA
OR have gross annual revenues of $1 million or less
o Purpose Test:
Activity that promotes permanent job creation, retention, and or improvement for
LMI people or areas or redevelopment by federal, state, local, or tribal
governments
NAWB Presentation: 14/25
Linking Workforce Development to the Community Reinvestment Act
• CRA questions and answers (Q&As)
• Guidance on the interpretation and application of the regulations (July 2016):
o Q&As §____.12(g)-1: Concerns the definition of community development. The agencies
revised it to clarify that qualified community development activities include workforce
development or job training programs for LMI or unemployed persons
o Q&As §____.12(t)-4: Provides examples of qualified investments. The agencies revised it
to expand the examples to include workforce development or job training programs for LMI
or unemployed persons
Source: https://www.federalregister.gov/documents/2016/07/25/2016-16693/community-reinvestment-act-interagency-
questions-and-answers-regarding-community-reinvestment
NAWB Presentation: 15/25
A Framework for Engaging Banks in Workforce Development
Engaging Workforce Development: A Framework for Meeting CRA Obligations
o Federal Reserve Banks of Kansas City and Dallas – released December 2016
o www.kansascityfed.org/community/workforce
• WIOA and new CRA guidance opens doors for bank engagement in workforce sector
• Both WIOA and new CRA guidance value:
o Local control
o Focus on LMI and disadvantaged populations
o Partnerships and relationship building
o Data and performance metrics
o Innovation
NAWB Presentation: 16/25
Ways Banks Can Engage in Workforce Development
• How can banks, most of which will be intermediate small banks* and large banks**,
engage in workforce development?
o Lending to community development financial institutions (CDFIs), community development
corporations (CDCs), or community-based organizations (CBOs)
o Providing financial support through an investment, equity equivalent, or grant
o Offering learn-and-earn opportunities
o Serving on a board, volunteering, providing pro bono services
o Providing financial services to program participants
What can banks do because they are banks?
*/**Assets greater than $313 million and $1.252 billion as of 1/1/2018
NAWB Presentation: 17/25
Benefits to Banks for Engaging in Workforce Development
• What are the benefits to banks for partnering with workforce development boards?
o Improve talent pipeline for the bank and their business customers
o Leverage and expand existing community development activities
o Provide value to existing business customers
o Develop access to new regional contacts and market data
o Exhibit responsiveness and innovation
How can you help a bank meet its business goals?
What value do you offer?
NAWB Presentation: 18/25
What Workforce Boards Need to Know about the Community Reinvestment Act
• Banks don’t have a ‘pot of CRA money’
• Banks are not obligated to fund any specific product, program, or service
• Articulate how your mission “qualifies” for credit under the CRA
• Be clear on what is needed, how it will be used, and the benefit/impact to the bank, your
organization and the beneficiaries
• Documentation, specifically on LMI persons or geographies served, is key
• Align the ask with the bank’s short- and long-term business plan
Focus on strategic partnerships not transactions.
NAWB Presentation: 19/25
Steps for Engaging Banks in Workforce Development
• Start the conversation
o Do you have bankers on your board?
o Who do you bank with?
o What banks are active in your community?
• Do your homework - target banks of interest
o CRA Exams, Schedules, Data – www.ffiec.gov
o Public file at each branch
• Expand your contacts
o Bank CRA Officers, lenders, management
o Bank regulators – Federal Reserve, FDIC, OCC
Be clear on the value you offer: innovation, responsiveness, access, data, impact
NAWB Presentation: 20/25
Workforce Alliance of South Central Kansas
The Workforce Alliance of South Central Kansas (WA) is a Local Workforce
Development Board (LWDB) that manages federal job training funds and oversees
the workforce development system for a six county region in South Central Kansas.
• Strategic Initiatives
o Registered Apprenticeship
o Sector Strategies
o Youth Employment Project
• Annual Budget
o $7.7 million
($3.9 million annual WIOA allocation)
NAWB Presentation: 21/25
How LWDBs Can Leverage CRA
Share Engaging Workforce Development: A Framework for Meeting CRA
Obligations report with LWDBs as a possible strategic initiative or planning tool
Develop strategy to convene banks to raise awareness of partnership
opportunities
o Research how local financial institutions are using CRA
o Map out professional or personal connections from LWDB members to banking industry
o Identify specific activities or employment strategies to meet CRA objectives and goals of
financial institutions
Use the tools of the LWDB:
Role as convener, networks of the board members and access to labor market information
NAWB Presentation: 22/25
How LWDBs Can Leverage CRA
• Examples of strategies now underway
o WA in partnership with the Federal Reserve Bank of Kansas City hosted meeting of area
bankers to present Engaging Workforce Development: A Framework for Meeting CRA
Obligations report
o WA part of community Youth Employment Project championed by Mayor Jeff Longwell
Presented at Investment Connection session hosted by the Federal Reserve Bank of
Kansas City
o Facilitating discussion with local bank and technical college on revolving scholarship fund for
short term training programs
LWDBs can serve as brokers to connect banks to workforce development priorities in the community.
NAWB Presentation: 23/25
Conclusion
• The workforce development landscape is evolving
• Opportunities for banks to engage in workforce development efforts in both urban and
rural markets are expanding
• Bank, civic, as well as agency leaders may need coaching on how to engage with local
workforce development experts/practitioners
• Federal Reserve Community Development Offices are resources
NAWB Presentation: 24/25
Conclusion
• Tools exist to help build CRA-related capacity:
o Engaging Workforce Development: A Framework for Meeting CRA Obligations
o Banks' Community Reinvestment Act (CRA) Opportunities
o Center for Workforce and Economic Opportunity
• Other Tools:
o Federal Financial Institution Examination Council (ffiec) - includes examination schedules, annual CRA
assets threshold adjustments, and the list of Distressed or Underserved Nonmetropolitan Middle-
Income Geographies
o Federal Reserve community development resources promoting people, place, policy and practice, and
small business fedcommunities (website)
o chicagofed resource (website)
o dallasfed resource (website)
o richmondfed resource (website)
o kansascityfed resource (website)
NAWB Presentation: 25/25
Questions/Contact Information
Stuart Andreason
Jason Keller
Steven Shepelwich
Keith Lawing
Financial Institutions' Engagement in Workforce Development
