American Banker, February 23, 2022, Fed capital policy puts community development aid out of some banks’ reach
A landmark Treasury Department program designed to invest billions in poor communities around the U.S. through specialized financial institutions is being hamstrung by little-known Federal Reserve guidance, significantly reducing the capital available for certain small banks.
But one of the largest and most anticipated federal efforts in community finance — the $8.75 billion Emergency Capital Investment Program, introduced by Congress’s 2021 budget — has become ensnared by conflicting supervisory rules between the Federal Reserve and Treasury Department, in some cases sharply reducing the potential investments some banks will be able to receive and put towards their communities.
