LOS ANGELES–(BUSINESS WIRE)–President and Chief Executive Officer of Cathay General Bancorp and Cathay Bank, Chang M. Liu, has been appointed by the Federal Reserve Bank of San Francisco to serve as a member on its Los Angeles Branch Board of Directors. Moreover, Mr. Liu has been elected as a California member director by the Federal Home Loan Bank of San Francisco to serve a four-year term between January 1, 2023, and December 31, 2026.

The Federal Reserve Bank of San Francisco represents the Twelfth District of the Federal Reserve System—the central bank of the United States. The Twelfth District comprises nine western states—Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington—plus the Northern Mariana Islands, American Samoa, and Guam.

The Federal Home Loan Bank of San Francisco is a cooperatively owned wholesale bank helping local lenders in Arizona, California, and Nevada build strong communities, create opportunities, and improve lives.

“I am incredibly honored and excited to take on both of these new roles. I look forward to working with the San Francisco Fed and FHLBank San Francisco to help create new opportunities in the region and build strong communities,” said Mr. Liu

In addition to serving as a board member on the Board of Directors of Cathay Bank and its holding company Cathay General Bancorp, Mr. Liu’s directorship extends to serving on the board of directors of the Western Bankers Association, the Board of Advisors for the UCLA Anderson Forecast, the American Cancer Society’s CEOs Against Cancer group, and the Foothill Family Service.

About Cathay Bank

Cathay Bank, a subsidiary of Cathay General Bancorp (Nasdaq: CATY), opened its doors in 1962 in Los Angeles to serve the growing immigrant community. Today, we operate over 60 branches across the US, with a branch in Hong Kong, and representative offices in Beijing, Shanghai, and Taipei. While much has changed over six decades, our pursuit and dedication has only grown stronger. Then, now, and always, we go above and beyond, so you can, too. Learn more at cathaybank.com. FDIC insurance coverage is limited to deposit accounts at Cathay Bank’s US domestic branch locations.

The post Chang M. Liu Appointed to the Los Angeles Department Board of Federal Reserve Financial institution of San Francisco and Elected as California Member Director of the Federal Dwelling Mortgage Financial institution of San Francisco appeared first on Los Gatos News And Events.

SAN FRANCISCO, Nov. 16, 2022 (GLOBE NEWSWIRE) — The Federal Home Loan Bank of San Francisco today announced the results of its 2022 director elections.

FHLBank San Francisco’s members elected Gary L. Trujillo to a nonmember independent director position. Mr. Trujillo is the founder and serves as president and CEO of Southwest Harvard Group, LLC, at an investment firm and family office in Phoenix, Arizona. He is also executive chairman of the Standard Printing Company, Inc.

Mr. Trujillo has been a serial entrepreneur for over 30 years with significant experience as a CEO, financier, founder, operator, and independent corporate board member, including serving on three publicly traded company boards and multiple privately owned company boards in the technology, healthcare , auto, real estate, and financial services industries. Mr. Trujillo is also recognized nationally as a dedicated community leader, having co-founded the Be A Leader Foundation in 2002, an education-focused nonprofit serving more than 14,000 students per year.

The Bank’s California members elected Chang M. Liu as a California member director. Mr. Liu is president and CEO of Cathay Bank and its holding company Cathay General Bancorp, where he serves on both entities’ board of directors. Mr. Liu has over 31 years of experience in the financial services industry. Mr. Liu joined Cathay Bank in 2014 as senior vice president and assistant chief lending officer. He has held various leadership positions of increasing responsibilities, including executive vice president and chief lending officer in 2016 and chief operating officer in 2018.

Before being named president, Mr. Liu was responsible for managing and overseeing all commercial and real estate lending, business development, and various operations. Mr. Liu also serves as a member of the Western Bankers Association board of directors and the American Cancer Society’s CEOs Against Cancer group, on the board of advisors for the UCLA Anderson Forecast, and serves on the board of directors of Foothill Family Service.

The Bank’s Arizona members re-elected Brian M. Riley as an Arizona member director. Mr. Riley is a director for the Oxford Life Insurance Company in Phoenix, Arizona.

Each of these three positions has a four-year term beginning January 1, 2023, and ending December 31, 2026.

Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California, and Nevada build strong communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions-commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies, and community development financial institutions-foster homeownership, expand access to quality housing, seed or sustain small businesses, and revitalize whole neighborhoods. Together with our members and other partners, we are making the communities we serve more vibrant, equitable, and resilient.

Photos accompanying this announcement are available at

https://www.globenewswire.com/NewsRoom/AttachmentNg/8e480285-232a-4910-b4a7-15ee401363ce

https://www.globenewswire.com/NewsRoom/AttachmentNg/b74b0418-d09e-4709-b4a4-b013aa936112

Contact: Mary Long, (415) 572-6717 longm@fhlbsf.com

Copyright 2022 GlobeNewswire, Inc.

The post Federal House Mortgage Financial institution of San Francisco Broadcasts 2022 Director Election Outcomes | Information appeared first on Los Gatos News And Events.

CHICO, Calif.–(BUSINESS WIRE)–Tri Counties Bank announced today awards totaling more than $2.1 million in grants to three organizations that qualified for the Federal Home Loan Bank of San Francisco’s (FHLBank San Francisco) Affordable Housing Program General Fund (AHP).

AHP grants are awarded annually to FHLBank San Francisco members working in partnership with affordable housing developers and community organizations. Tri Counties Bank successfully nominated three organizations to be considered for the grants: Collier Avenue (Nice, Calif.), Piper Way Senior Housing (Redding, Calif.), and Siskiyou Crossroads (Yreka, Calif.).

AHP awards are highly competitive, ranked based on an extensive scoring process and granted to the highest-ranking projects. Basic eligibility requirements include projects demonstrating a need for subsidy and both developmental and operational feasibility. Further, rental housing projects must reserve at least 20% of units for households at or below 50% of the HUD area median income (AMI) while owner-occupied housing projects must serve households at or below 80% AMI.

“We congratulate Tri Counties Bank for submitting successful AHP applications for these very important affordable housing developments,” said Marietta Núñez, Senior Vice President and Community Investment Officer at FHLBank San Francisco. “We are proud to partner with members – like Tri Counties Bank – to support organizations on the ground who are working to address pressing affordable housing needs in local communities.”

These organizations will utilize the AHP grants to help create 149 units of affordable housing to those earning less than 60% AMI, including previously unhoused veterans, extremely low-income seniors, and low-income families and individuals.

“We are fortunate to have FHLBank San Francisco as a partner in our efforts to improve the availability of affordable housing across our communities. These grants, along with the dedicated efforts and partnership of local organizations, continue to make an important and positive difference in the lives of veterans and seniors,” said Rick Smith, President and CEO of Tri Counties Bank.

About Tri Counties Bank

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, with assets of over $10 billion and more than 45 years of financial stability. Tri Counties Bank provides a unique brand of Service With Solutions® for communities throughout California with a breadth of personal, small business and commercial banking services, plus an extensive branch network, more than 37,000 surcharge-free ATMs nationwide, and advanced online and mobile banking . Tri Counties Bank participates in the Cities for Financial Empowerment (CFE) Fund’s BankOn program that seeks to ensure that everyone has access to safe and affordable financial products and services. Visit TriCountiesBank.com to learn more. Member FDIC.

About FHL Bank San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California, and Nevada build strong communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions foster homeownership, expand access to quality housing, seed or sustain small businesses, and revitalize whole neighborhoods. Each year, the Bank contributes 10% of net income to the Affordable Housing Program, which provides grants to support the acquisition, construction, or preservation of housing affordable to low- to moderate-income families and individuals. Together with our members and other partners, we are making the communities we serve more vibrant and resilient.

The post Tri Counties Financial institution and FHLBank San Francisco Award Over $2.1 Million in Grants In direction of Reasonably priced Housing appeared first on Los Gatos News And Events.

Inflation has remained at levels well above the Federal Reserve’s inflation goal of 2% for over a year. Separating the underlying data from the personal consumption expenditures price index into supply- versus demand-driven categories reveals that supply factors explain about half of the run-up in current inflation levels. Demand factors are responsible for about one-third, with the remainder resulting from ambiguous factors. While supply disruptions are widely expected to ease this year, this outcome is highly uncertain.

Inflation declined rapidly at the onset of the pandemic in the spring of 2020 before taking a dramatic turn upward in early 2021, rising to levels that remain well above the Federal Reserve’s longer-run goal of 2% on average. Researchers and policymakers have pointed to both supply and demand factors as being responsible for elevated inflation. For instance, Barnichon and Shapiro (2022) showed the impact of supply-related factors such as labor shortages, while Barnichon, Oliveira, and Shapiro (2021) and Jordà et al. (2022) demonstrated the importance of heightened demand stemming from pandemic-related fiscal relief. The extent to which either supply or demand factors are responsible for higher inflation levels has important implications for monetary policy. As Fed Chair Powell stated in a recent interview, “What [the Fed] can control is demand, we can’t really affect supply with our policies…so the question whether we can execute a soft landing or not, it may actually depend on factors that we don’t control” (Marketplace 2022).

In this Economic Letter, I quantify and track the impact of supply- and demand-related factors on personal consumption expenditures (PCE) inflation. Similar to the methodology introduced in Mahedy and Shapiro (2017), and outlined in Shapiro (2022), I assess inflation rates by spending category. I divide categories in the PCE basket into supply- and demand-driven groups. Demand-driven categories are identified as those where an unexpected change in price moves in the same direction as the unexpected change in quantity in a given month; supply-driven categories are identified as those where unexpected changes in price and quantity move in opposite directions. This methodology accounts for the evolving impact of supply- versus demand-driven factors on inflation from month to month. To help monitor these changes, the San Francisco Fed has launched a new Supply- and Demand-Driven PCE Inflation data page with monthly data updates.

My analysis highlights that both supply and demand factors are responsible for current elevated inflation levels. Supply factors explain about half of the difference between current 12-month PCE inflation and pre-pandemic inflation levels, and the effects appear to be rising more recently. Demand factors are responsible for about a third of the difference, and those effects appear to be diminishing more recently. The remainder is due to factors that cannot be definitively labeled as supply or demand. The large impact of supply factors implies that inflationary pressures will not completely subside until labor shortages, production constraints, and shipping delays are resolved. Although supply disruptions are widely expected to ease this year, this outcome is highly uncertain.

Separating supply and demand drivers

This analysis uses the more than 100 goods and services categories in the PCE index. For each month of data, I separate the categories where prices moved due to a change in demand from those where prices moved due to a change in supply. To do so, I rely on simple microeconomic theory: Shifts in demand move both prices and quantities in the same direction along the upward-sloping supply curve, meaning prices rise as demand increases. Shifts in supply move prices and quantities in opposite directions along the downward-sloping demand curve, meaning prices rise when supplies decline.

Each month I estimate the changes in the price level and quantity level of each category. It is important to isolate the unexpected components of the changes in prices and quantities, as opposed to the simple change itself. This is because prices and quantities generally continue an existing trend. These expected trend components are not likely to represent a shift in demand or supply, but instead reflect longer-run factors such as technological improvements, cost-of-living adjustments to wages, or demographic changes like population aging.

Extracting the unexpected components of the monthly changes in price and quantity for each category is an iterative process. I run 10-year-window rolling regressions for both price and quantity. For example, the first window begins in January 1988, the first period PCE data are available at the detailed level, and ends in December 1997. This generates predicted values for price and quantity in January 1998, which I then compare to the actual values of price and quantity in that same month. If the actual values of price and quantity are both above or both below their predicted values, the category is labeled as “demand-driven” in January 1998. If the difference between the actual and predicted values are of opposite signs, the category is labeled as “supply-driven” in that month. If either of the actual values is close enough to its predicted value that the difference is statistically indistinguishable from zero, the category is labeled as “ambiguous” in that month. I then roll the data window forward one month and repeat the process. I iterate this process for each month until I reach the last window of data, which for this Letter begins in May 2012 and ends in April 2022.

Categories that experience frequent supply-driven price changes include food and household products such as dishes, linens, and household paper items. Categories that experience frequent demand-driven price changes include motor vehicle-related products, used cars, and electricity. However, assessing the past two years of data reveals some changes in which categories experienced demand and supply shocks in the post-pandemic period. Specifically, categories with extraordinarily frequent supply-driven price changes in 2021 and 2022 include products with known supply constraints during the pandemic, such as new automobiles, fuel, and repair services. Categories with extraordinarily frequent demand-driven price changes during this period include many goods consumed at home—for example, furniture, clothing, toys, video equipment, and cookware—as well as services related to reopening from pandemic-related closures, such as restaurants and museums.

Figure 1 shows the contributions to 12-month headline PCE inflation from supply- (green) and demand-driven (blue) inflation between 1998 and 2022. Yellow sections show the ambiguous portion of PCE inflation that is not labeled as either demand or supply driven. I calculate the monthly contributions to inflation by multiplying the change in price for a given category by its most recent respective weight in the PCE index. The monthly contributions for demand-driven, supply-driven, and ambiguous categories are then calculated as the sum of contributions from all items within that category. The contributions for demand-driven and supply-driven inflation are then calculated as the 12-month trailing sum of their respective monthly contributions. This generates a series that can be directly compared to the year-over-year PCE inflation rate.

Figure 1
Supply-driven and demand-driven contributions to year-over-year PCE inflation

Note: Data available at Supply- and Demand-Driven PCE Inflation. Gray shading indicates NBER recession dates.

The changes in patterns over time show some intuitive dynamics. The contribution of demand-driven factors to headline PCE inflation declines during recessions. The collapse in airline travel immediately after September 11, 2001, is labeled as demand-driven and the sharp energy price declines in 2014 and 2015 are identified as supply-driven.

Inflation drivers over the pandemic period

To get a sense of whether supply or demand factors are responsible for current elevated inflation levels, I compare current supply- and demand-driven inflation to their average levels from the 10 years before the pandemic. During the pre-pandemic period, PCE inflation averaged 1.5%, considerably below the April 2022 rate of 6.3%. Figure 2 compares the most recent contributions of supply-driven inflation in panel A and demand-driven inflation in panel B against their respective 2010–2019 averages. Supply-driven inflation is currently contributing 2.5 percentage points (pp) more than its pre-pandemic average, while demand-driven inflation is currently contributing 1.4pp more. Thus, supply-driven inflation explains a little more than half of the 4.8pp gap between current levels of year-over-year PCE inflation and its pre-pandemic average level. Demand factors explain a smaller share of elevated inflation levels, accounting for about one-third of the difference. The ambiguous category, which is not shown, explains the remainder of the difference.

Figure 2
Contributions of supply- and demand-driven factors to headline PCE inflation

Note: Gray shading indicates NBER recession dates.

Repeating the same exercise with core PCE inflation, which excludes historically volatile food and energy categories, results in somewhat similar patterns. However, supply and demand factors each explain about half of elevated core inflation levels. Specifically, supply- and demand-driven factors each explain about 45% of the 3.3pp gap between current levels of year-over-year core PCE inflation and its pre-pandemic average level. Monthly results of these contributions to core PCE inflation are available on the data page.

Finally, I assess the contributions to annualized monthly changes in headline PCE inflation. This provides a higher frequency depiction of how supply and demand factors affected inflation over the pandemic period. Figure 3 breaks down these contributions over past five years, showing the one-month changes used to construct the 12-month trailing sums shown in Figure 1.

Figure 3
Contributions to annualized monthly changes in inflation

Note: Gray shading indicates NBER recession dates.

The decline in inflation at the onset of the pandemic was driven by a decrease in demand factors, while the surge in inflation in March 2021 was mainly due to the increase in demand-driven factors. During this period the economy began to reopen from pandemic-related public health policies, and the American Rescue Plan enacted in March 2021 further stimulated demand factors. These factors began to slow in the summer of 2021 with an increase COVID-19 infections associated with the Delta variant, but demand reemerged in the fall as the Delta wave subsided.

Meanwhile, supply factors began to arise in April 2021, indicating a slightly delayed response from the economy reopening. Supply-driven inflation has remained elevated since then and has accelerated more recently. This acceleration is attributable to food and energy supply disruptions, including those associated with the invasion of Ukraine.

Conclusion

Analysis in this Letter shows that supply factors are responsible for more than half of the current elevated level of 12-month PCE inflation. This in part reflects supply constraints from continued labor shortages and global supply disruptions related to the pandemic and the war in Ukraine. While demand factors played a large role in the spring of 2021, they explain only about a third of recent elevated inflation levels. Factors that cannot be labeled as either demand or supply are also playing a nontrivial role.

These results showing that factors other than demand account for about two-thirds of recent elevated inflation highlight some risks for the economy. Because supply shocks raise prices and suppress economic activity, the prevalence of supply-related factors raises the risk of entering a period of low growth and elevated inflation levels. This risk depends crucially on how long labor shortages and global supply disruptions persist. While supply disruptions are widely expected to ease this year, this outcome is highly uncertain.

Adam Hale Shapiro is a vice president in the Economic Research Department of the Federal Reserve Bank of San Francisco.

References

Jordà, Òscar, Celeste Liu, Fernanda Nechio, and Fabian Rivera-Reyes. 2022. “Why Is U.S. Inflation Higher than in Other Countries?” FRBSF Economic Letter 2022-07 (March 28).

Barnichon, Regis, Luiz E. Oliveira, and Adam Hale Shapiro. 2021. “Is the American Rescue Plan Taking Us Back to the’60s?” FRBSF Economic Letter 2021-27 (October 18).

Barnichon, Regis, and Adam Hale Shapiro. 2022. “What’s the Best Measure of Economic Slack?” FRBSF Economic Letter 2022-04 (February 22).

Mahedy, Tim, and Adam Hale Shapiro. 2017. “What’s Down with Inflation?” FRBSF Economic Letter 2017-35 (November 27).

Powell, Jerome. 2022. “Inflation, Soft Landings and the Federal Reserve.” Interview by Kai Ryssdal, Marketplace Business News Podcast, NPR, May 12. Audio, 27:38.

Shapiro, Adam Hale. 2022. “A Simple Framework to Monitor Inflation.” FRB San Francisco Working Paper 2020-29.

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CHICO, Calif.–(BUSINESS WIRE)–Tri Counties Bank announced today, in conjunction with the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), a $200,000 donation to promote Black homeownership as part of the FHLBank San Francisco’s Empowering Black Homeownership matching grant program.

The recently launched program is a key component of Tri Counties Bank and FHLBank San Francisco’s commitment to advancing racial equity in homeownership and narrowing the Black homeownership and wealth gaps. Through this new program, FHLBank San Francisco’s member financial institutions can request dollar-for-dollar matching grants, up to a total matching amount of $125,000, for their donations to approved housing counseling agencies.

“We are fortunate to have FHLBank San Francisco as a partner in our efforts to increase Black homeownership across our footprint,” said Rick Smith, President & CEO of Tri Counties Bank. “There is no better time to kick off this program than in June, both for National Homeownership Month and in appreciation of Juneteenth.”

FHLBank San Francisco matched Tri Counties Bank’s $100,000 donation for a total of $200,000, which will be distributed in $50,000 grants to four Housing Counseling Agencies (HCAs) throughout Tri Counties Bank’s footprint: Greater Sacramento Urban League, Self Help Enterprises, Community Housing Development Corporation, and San Francisco Housing Development Corporation.

“Pre- and post-homeownership counseling can be the key to sustainable homeownership, and we are thrilled that Tri Counties Bank is using our new Empowering Black Homeownership program to support four different HCAs,” said Marietta Núñez, Senior Vice President and Community Investment Officer at FHL Bank San Francisco. “The Bank’s match of Tri Counties Bank’s donations to these HCAs will magnify their impact and enable the agencies to serve more aspiring and at-risk homeowners in communities where Tri Counties Bank does business.”

Greater Sacramento Urban League

Greater Sacramento Urban League (GSUL) has been aiding youths and adults from underrepresented communities throughout Sacramento County for over 50 years, providing comprehensive housing counseling, education, job training and placement opportunities to achieve economic self-reliance.

The organization plans to use their grant from Tri Counties Bank and FHLBank San Francisco to assist with their Housing Counseling Program, which is HUD approved and offered to the public at no cost. The program offers counseling in areas such as homelessness, rental assistance, first-time home buyer, credit and budgeting, and refinancing.

“Sacramento County has the lowest Black home ownership rate in California. Far too many have lost hope in the American dream of home ownership,” said Dwayne Crenshaw, JD, President and CEO of the Greater Sacramento Urban League. “With this critical grant funding, the Greater Sacramento Urban League will strive to restore hope to families we reach by offering them personalized financial planning services to help get their families on a realistic path to actually achieving the dream.”

Self Help Enterprises

Self-Help Enterprises (SHE), located in Visalia, California, was founded in 1965 with the mission to work together with low-income families to build and sustain healthy homes and communities. SHE serves eight counties in the San Joaquin Valley: Fresno, Kern, Kings, Madera, Mariposa, Merced, Stanislaus and Tulare counties. Although this area is known as a top agricultural production region, the San Joaquin Valley has among the highest poverty rates in the State of California.

The organization will use the grant to link opportunities to enhance and create outreach campaigns in Black communities to promote the Mutual Self-Help Housing Program. Participants will be served with customized homeownership resources, educational, and home counseling needs. SHE will implement alliances and collaboration strategies with partners to pursue shared goals to raise and strengthen Black homeownership.

“We are grateful for Tri Counties Bank’s Black Homeownership Grant as it will enable us to continue to provide accessible housing opportunities for the underserved members of our community,” said Tom Collishaw, President and CEO of SHE. “This grant will help create a direct path toward sustainable homeownership for the Valley’s Black families and will empower them to build wealth for generations to come.”

Community Housing Development Corp

Community Housing Development Corporation, located in Richmond, California, provides a broad range of affordable housing opportunities and services throughout the Bay Area to enable low/moderate income residents to gain better housing and financial stability.

The organization plans to use their grant to fund the Black Wealth Initiative (BWI), which helps to close the Black wealth gap through encouraging and helping black people in the Bay Area to become homeowners. The BWI assists with both homebuying education and down payment and/or closing costs. While the program is still in its infancy, the organization has already assisted one homeowner with closing the purchase of a home and three more are already on the way towards homeownership.

“The Black Wealth Initiative (BWI) focuses on one of the leading causes of the black wealth gap, and that is the disparate number of black homeowners compared to white homeowners,” said Don Gilmore, Executive Director of the Community Housing Development Corporation. “CHDC and Tri Counties Bank hope to close that gap by helping more black families and individuals to purchase homes in the Bay Area, which will also help to build generational wealth for years to come.”

San Francisco Housing Development Corporation

San Francisco Housing Development Corporation (SFHDC) was founded in 1988 with the mission to foster financial stability through the development of affordable housing, the facilitation of homeownership and the economic empowerment and revitalization of San Francisco’s communities of color.

The Empowering Black Homeownership matching grant will support SFHDC’s Housing Counseling & Financial Empowerment Program, which provides renters, aspiring homebuyers and existing homeowners with the skills, knowledge and information they need to obtain, stabilize and maintain affordable housing, whether it’s a rental or home purchase . The program supports 1,500 clients a year, with over 80% of them individuals of color.

“Since our founding in 1988, SFHDC has focused on empowering Black San Franciscans to achieve homeownership, and providing them with other economic stability and mobility strategies to create wealth,” said David Sobel, SFHDC’s Chief Executive Officer. “The generous support of FHLBank and Tri Counties Bank will enable us to continue this urgently needed work amidst soaring housing prices, and address racial disparities within the arena of both home purchase and homeownership retention.”

About Tri Counties Bank

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, with assets of over $10 billion and more than 45 years of financial stability. Tri Counties Bank provides a unique brand of Service With Solutions® for communities throughout California with a breadth of personal, small business and commercial banking services, plus an extensive branch network, more than 37,000 surcharge-free ATMs nationwide, and advanced online and mobile banking . Visit TriCountiesBank.com to learn more. Member FDIC.

About Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California and Nevada strengthen communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions — commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies and community development financial institutions — promote homeownership, expand access to quality housing and boost economic development. Together with our members and other partners, we are making the communities we serve more vibrant, equitable and resilient.

The post Tri Counties Financial institution and FHLBank San Francisco Donate $200,000 to Black Homeownership for Nationwide Homeownership Month appeared first on Los Gatos News And Events.

CHICO, Calif.–(BUSINESS WIRE)–Jun 16, 2022–

Tri Counties Bank announced today, in conjunction with the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), a $200,000 donation to promote Black homeownership as part of the FHLBank San Francisco’s Empowering Black Homeownership matching grant program.

The recently launched program is a key component of Tri Counties Bank and FHLBank San Francisco’s commitment to advancing racial equity in homeownership and narrowing the Black homeownership and wealth gaps. Through this new program, FHLBank San Francisco’s member financial institutions can request dollar-for-dollar matching grants, up to a total matching amount of $125,000, for their donations to approved housing counseling agencies.

“We are fortunate to have FHLBank San Francisco as a partner in our efforts to increase Black homeownership across our footprint,” said Rick Smith, President & CEO of Tri Counties Bank. “There is no better time to kick off this program than in June, both for National Homeownership Month and in appreciation of Juneteenth.”

FHLBank San Francisco matched Tri Counties Bank’s $100,000 donation for a total of $200,000, which will be distributed in $50,000 grants to four Housing Counseling Agencies (HCAs) throughout Tri Counties Bank’s footprint: Greater Sacramento Urban League, Self Help Enterprises, Community Housing Development Corporation, and San Francisco Housing Development Corporation.

“Pre- and post-homeownership counseling can be the key to sustainable homeownership, and we are thrilled that Tri Counties Bank is using our new Empowering Black Homeownership program to support four different HCAs,” said Marietta Núñez, Senior Vice President and Community Investment Officer at FHL Bank San Francisco. “The Bank’s match of Tri Counties Bank’s donations to these HCAs will magnify their impact and enable the agencies to serve more aspiring and at-risk homeowners in communities where Tri Counties Bank does business.”

Greater Sacramento Urban League

Greater Sacramento Urban League (GSUL) has been aiding youths and adults from underrepresented communities throughout Sacramento County for over 50 years, providing comprehensive housing counseling, education, job training and placement opportunities to achieve economic self-reliance.

The organization plans to use their grant from Tri Counties Bank and FHLBank San Francisco to assist with their Housing Counseling Program, which is HUD approved and offered to the public at no cost. The program offers counseling in areas such as homelessness, rental assistance, first-time home buyer, credit and budgeting, and refinancing.

“Sacramento County has the lowest Black home ownership rate in California. Far too many have lost hope in the American dream of home ownership,” said Dwayne Crenshaw, JD, President and CEO of the Greater Sacramento Urban League. “With this critical grant funding, the Greater Sacramento Urban League will strive to restore hope to families we reach by offering them personalized financial planning services to help get their families on a realistic path to actually achieving the dream.”

Self Help Enterprises

Self-Help Enterprises (SHE), located in Visalia, California, was founded in 1965 with the mission to work together with low-income families to build and sustain healthy homes and communities. SHE serves eight counties in the San Joaquin Valley: Fresno, Kern, Kings, Madera, Mariposa, Merced, Stanislaus and Tulare counties. Although this area is known as a top agricultural production region, the San Joaquin Valley has among the highest poverty rates in the State of California.

The organization will use the grant to link opportunities to enhance and create outreach campaigns in Black communities to promote the Mutual Self-Help Housing Program. Participants will be served with customized homeownership resources, educational, and home counseling needs. SHE will implement alliances and collaboration strategies with partners to pursue shared goals to raise and strengthen Black homeownership.

“We are grateful for Tri Counties Bank’s Black Homeownership Grant as it will enable us to continue to provide accessible housing opportunities for the underserved members of our community,” said Tom Collishaw, President and CEO of SHE. “This grant will help create a direct path toward sustainable homeownership for the Valley’s Black families and will empower them to build wealth for generations to come.”

Community Housing Development Corp

Community Housing Development Corporation, located in Richmond, California, provides a broad range of affordable housing opportunities and services throughout the Bay Area to enable low/moderate income residents to gain better housing and financial stability.

The organization plans to use their grant to fund the Black Wealth Initiative (BWI), which helps to close the Black wealth gap through encouraging and helping black people in the Bay Area to become homeowners. The BWI assists with both homebuying education and down payment and/or closing costs. While the program is still in its infancy, the organization has already assisted one homeowner with closing the purchase of a home and three more are already on the way towards homeownership.

“The Black Wealth Initiative (BWI) focuses on one of the leading causes of the black wealth gap, and that is the disparate number of black homeowners compared to white homeowners,” said Don Gilmore, Executive Director of the Community Housing Development Corporation. “CHDC and Tri Counties Bank hope to close that gap by helping more black families and individuals to purchase homes in the Bay Area, which will also help to build generational wealth for years to come.”

San Francisco Housing Development Corporation

San Francisco Housing Development Corporation (SFHDC) was founded in 1988 with the mission to foster financial stability through the development of affordable housing, the facilitation of homeownership and the economic empowerment and revitalization of San Francisco’s communities of color.

The Empowering Black Homeownership matching grant will support SFHDC’s Housing Counseling & Financial Empowerment Program, which provides renters, aspiring homebuyers and existing homeowners with the skills, knowledge and information they need to obtain, stabilize and maintain affordable housing, whether it’s a rental or home purchase . The program supports 1,500 clients a year, with over 80% of them individuals of color.

“Since our founding in 1988, SFHDC has focused on empowering Black San Franciscans to achieve homeownership, and providing them with other economic stability and mobility strategies to create wealth,” said David Sobel, SFHDC’s Chief Executive Officer. “The generous support of FHLBank and Tri Counties Bank will enable us to continue this urgently needed work amidst soaring housing prices, and address racial disparities within the arena of both home purchase and homeownership retention.”

About Tri Counties Bank

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, with assets of over $10 billion and more than 45 years of financial stability. Tri Counties Bank provides a unique brand of Service With Solutions® for communities throughout California with a breadth of personal, small business and commercial banking services, plus an extensive branch network, more than 37,000 surcharge-free ATMs nationwide, and advanced online and mobile banking . Visit TriCountiesBank.com to learn more. Member FDIC.

About Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California and Nevada strengthen communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions — commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies and community development financial institutions — promote homeownership, expand access to quality housing and boost economic development. Together with our members and other partners, we are making the communities we serve more vibrant, equitable and resilient.

View source version on businesswire.com:https://www.businesswire.com/news/home/20220616005302/en/

CONTACT: Megan Sheehan, Community Engagement Manager

megansheehan@tcbk.com

(530) 332-2330

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OTHER PROFESSIONAL SERVICES FINANCE SOCIAL SERVICES BANKING PROFESSIONAL SERVICES PHILANTHROPY FOUNDATION BUSINESS

SOURCE: Tri Counties Bank

Copyright Business Wire 2022.

PUB: 06/16/2022 12:30 PM / DISC: 06/16/2022 12:32 PM

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The post Tri Counties Financial institution and FHLBank San Francisco Donate $200,000 to Black Homeownership for Nationwide Homeownership Month | Information appeared first on Los Gatos News And Events.

CHICO, Calif., June 16, 2022–(BUSINESS WIRE)–Tri Counties Bank announced today, in conjunction with the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), a $200,000 donation to promote Black homeownership as part of the FHLBank San Francisco’s Empowering Black Homeownership matching grant program.

The recently launched program is a key component of Tri Counties Bank and FHLBank San Francisco’s commitment to advancing racial equity in homeownership and narrowing the Black homeownership and wealth gaps. Through this new program, FHLBank San Francisco’s member financial institutions can request dollar-for-dollar matching grants, up to a total matching amount of $125,000, for their donations to approved housing counseling agencies.

“We are fortunate to have FHLBank San Francisco as a partner in our efforts to increase Black homeownership across our footprint,” said Rick Smith, President & CEO of Tri Counties Bank. “There is no better time to kick off this program than in June, both for National Homeownership Month and in appreciation of Juneteenth.”

FHLBank San Francisco matched Tri Counties Bank’s $100,000 donation for a total of $200,000, which will be distributed in $50,000 grants to four Housing Counseling Agencies (HCAs) throughout Tri Counties Bank’s footprint: Greater Sacramento Urban League, Self Help Enterprises, Community Housing Development Corporation, and San Francisco Housing Development Corporation.

“Pre- and post-homeownership counseling can be the key to sustainable homeownership, and we are thrilled that Tri Counties Bank is using our new Empowering Black Homeownership program to support four different HCAs,” said Marietta Núñez, Senior Vice President and Community Investment Officer at FHL Bank San Francisco. “The Bank’s match of Tri Counties Bank’s donations to these HCAs will magnify their impact and enable the agencies to serve more aspiring and at-risk homeowners in communities where Tri Counties Bank does business.”

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Greater Sacramento Urban League

Greater Sacramento Urban League (GSUL) has been aiding youths and adults from underrepresented communities throughout Sacramento County for over 50 years, providing comprehensive housing counseling, education, job training and placement opportunities to achieve economic self-reliance.

The organization plans to use their grant from Tri Counties Bank and FHLBank San Francisco to assist with their Housing Counseling Program, which is HUD approved and offered to the public at no cost. The program offers counseling in areas such as homelessness, rental assistance, first-time home buyer, credit and budgeting, and refinancing.

“Sacramento County has the lowest Black home ownership rate in California. Far too many have lost hope in the American dream of home ownership,” said Dwayne Crenshaw, JD, President and CEO of the Greater Sacramento Urban League. “With this critical grant funding, the Greater Sacramento Urban League will strive to restore hope to families we reach by offering them personalized financial planning services to help get their families on a realistic path to actually achieving the dream.”

Self Help Enterprises

Self-Help Enterprises (SHE), located in Visalia, California, was founded in 1965 with the mission to work together with low-income families to build and sustain healthy homes and communities. SHE serves eight counties in the San Joaquin Valley: Fresno, Kern, Kings, Madera, Mariposa, Merced, Stanislaus and Tulare counties. Although this area is known as a top agricultural production region, the San Joaquin Valley has among the highest poverty rates in the State of California.

The organization will use the grant to link opportunities to enhance and create outreach campaigns in Black communities to promote the Mutual Self-Help Housing Program. Participants will be served with customized homeownership resources, educational, and home counseling needs. SHE will implement alliances and collaboration strategies with partners to pursue shared goals to raise and strengthen Black homeownership.

“We are grateful for Tri Counties Bank’s Black Homeownership Grant as it will enable us to continue to provide accessible housing opportunities for the underserved members of our community,” said Tom Collishaw, President and CEO of SHE. “This grant will help create a direct path toward sustainable homeownership for the Valley’s Black families and will empower them to build wealth for generations to come.”

Community Housing Development Corp

Community Housing Development Corporation, located in Richmond, California, provides a broad range of affordable housing opportunities and services throughout the Bay Area to enable low/moderate income residents to gain better housing and financial stability.

The organization plans to use their grant to fund the Black Wealth Initiative (BWI), which helps to close the Black wealth gap through encouraging and helping black people in the Bay Area to become homeowners. The BWI assists with both homebuying education and down payment and/or closing costs. While the program is still in its infancy, the organization has already assisted one homeowner with closing the purchase of a home and three more are already on the way towards homeownership.

“The Black Wealth Initiative (BWI) focuses on one of the leading causes of the black wealth gap, and that is the disparate number of black homeowners compared to white homeowners,” said Don Gilmore, Executive Director of the Community Housing Development Corporation. “CHDC and Tri Counties Bank hope to close that gap by helping more black families and individuals to purchase homes in the Bay Area, which will also help to build generational wealth for years to come.”

San Francisco Housing Development Corporation

San Francisco Housing Development Corporation (SFHDC) was founded in 1988 with the mission to foster financial stability through the development of affordable housing, the facilitation of homeownership and the economic empowerment and revitalization of San Francisco’s communities of color.

The Empowering Black Homeownership matching grant will support SFHDC’s Housing Counseling & Financial Empowerment Program, which provides renters, aspiring homebuyers and existing homeowners with the skills, knowledge and information they need to obtain, stabilize and maintain affordable housing, whether it’s a rental or home purchase . The program supports 1,500 clients a year, with over 80% of them individuals of color.

“Since our founding in 1988, SFHDC has focused on empowering Black San Franciscans to achieve homeownership, and providing them with other economic stability and mobility strategies to create wealth,” said David Sobel, SFHDC’s Chief Executive Officer. “The generous support of FHLBank and Tri Counties Bank will enable us to continue this urgently needed work amidst soaring housing prices, and address racial disparities within the arena of both home purchase and homeownership retention.”

About Tri Counties Bank

Established in 1975, Tri Counties Bank is a wholly-owned subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in Chico, California, with assets of over $10 billion and more than 45 years of financial stability. Tri Counties Bank provides a unique brand of Service With Solutions® for communities throughout California with a breadth of personal, small business and commercial banking services, plus an extensive branch network, more than 37,000 surcharge-free ATMs nationwide, and advanced online and mobile banking . Visit TriCountiesBank.com to learn more. Member FDIC.

About Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California and Nevada strengthen communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions — commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies and community development financial institutions — promote homeownership, expand access to quality housing and boost economic development. Together with our members and other partners, we are making the communities we serve more vibrant, equitable and resilient.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220616005302/en/

Contacts

Megan Sheehan, Community Engagement Manager
megansheehan@tcbk.com
(530) 332-2330

The post Tri Counties Financial institution and FHLBank San Francisco Donate $200,000 to Black Homeownership for Nationwide Homeownership Month appeared first on Los Gatos News And Events.

May 26, 2022

What is the role of care work in supporting the ongoing economic recovery from the pandemic?

Research from the San Francisco Fed shows that the pandemic’s disruptions have forced many mothers with children at home to drop out of the labor market—and Black and Hispanic mothers have been hardest hit.

In a Fed Listens event hosted by the SF Fed last November, researchers and leaders from the public, private, and nonprofit sectors discussed how better supporting care work can contribute to a more inclusive economic recovery.

“Dependent care is an essential ingredient to supporting work,” said SF Fed President Mary Daly, pointing out that an overall low unemployment rate doesn’t signal that everyone who wants a job can get one. “Some of the barriers are not about job openings, but about the network of things that support work.”

Here are four takeaways from the Fed Listens dialogue with experts. Quotes are lightly edited for clarity.

1. Child care is prohibitively expensive—and even for those who can afford it, COVID has reduced availability of care.

“There is a real misalignment between when trades workers need the care and when care providers are available. Parents in the trades rely largely on informal care arrangements…because of the cost and the availability of care.”

–April Sims, Secretary Treasurer, Washington State Labor Council, AFL-CIO

This example shows how access to affordable child care is particularly challenging for workers with nontraditional or unstable work hours.

A Washington State Labor Council, AFL-CIO survey of trade workers—two-thirds of respondents who were men— found that 63% of respondents said they live in a child care desert, with low or no access to child care services.

In California, about 80% to 90% of child care programs that closed during the pandemic have reopened. The state is also reporting drops in care licensing. Currently operating programs are experiencing disruptions due to ongoing COVID cases, which result in programs being shut down for a week or more.

2. It’s not enough to focus on affordable care—we also need to invest in care professionals.

“The home care workforce is an essential workforce…they need to be prioritized.”

–Cheryl Miller, Executive Director, Oregon Home Care Commission

“We’re really quite a ways away from paying what [child care] providers and teachers need to earn in order to be valued the way that we value virtually everything else.”

–Michael Olenick, President and CEO, Child Care Resource Center

Experts at the event agreed that solutions need to focus on both reducing the cost of care and raising the income of care workers. Care professionals—a majority of whom are women, immigrants, or people of color—are often the lowest paid and undervalued for their work.

In Oregon, collective bargaining has led to increases in wages, benefits, and development opportunities for home care workers in recent years. California has also seen wages rise through collective bargaining, but it is still lower than it should be, said Olenick.

3. Offering flexibility in work schedules can help mothers stay in the job market.

“Much of the adverse impact on mothers is partially offset by the ability to set working hours and having flexibility in work schedules.”

–Nicolas Petrosky-Nadeau, Vice President, Economic Research, Federal Reserve Bank of San Francisco

Petrosky-Nadeau’s research found that the flexibility to work remotely had little effect on whether or not mothers stayed in the labor market, but those who had the flexibility to set work schedules stayed employed in greater numbers than those who could not set their schedules.

4. Businesses have an opportunity to attract and retain talent by providing benefits that matter to employees, like child care assistance, and rethinking working models.

“[There’s no better way for companies] to appreciate their staff, to show them that they care, than by coming up with programs to ensure that the children of their employees are safe, and that parents can come to work and be their best self.”

-Lilia Vergara, Director of Human Resources, Dr. Bronner’s

At Dr. Bronner’s, employees cited child care as a top concern on multiple surveys during the pandemic. To ensure that employees were supported during a time of increased demand at the soap company, Dr. Bronner’s partnered with other companies to increase their child care assistance program, offering up to $7,500 a year for child care.

In addition to child care support, companies could look at offering flexibility for workers, training and development, and consistent benefits across roles and levels to help attract and retain talent.

For more details, read the full event summary or watch the event recording on our Fed Listens page.

Fed Listens is a series of community outreach events that first launched in 2019. In 2021, the focus of Fed Listens events was on the economic recovery from the COVID-19 pandemic. Learn more about the Fed Listens initiative and other events at the Board of Governors information site.

You may also be interested in:

The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.

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May 24, 2022

Across my research on different areas of the financial system—mainly housing and credit—a common theme bubbles up: financial inclusion. While insufficient access to financial systems has long been understood as a problem for people with low incomes, I’ve been looking at how people of color and people in immigrant communities struggle for financial equity, independent of income levels.

I have experienced this paradox in my own life. I was raised in Wisconsin and Minnesota by my parents, who are immigrants from Argentina. To me, growing up in an immigrant family meant being bilingual, living far from family, and observing traditions that were sometimes different from our neighbors’. Thankfully, I never had to experience the financial challenges that I saw other immigrants—like some of my mother’s clients as a medical interpreter—face. Still, when I entered adulthood, I experienced a challenge accessing financial services related to my status as a second generation American: I couldn’t get a credit card.

I didn’t have a credit card during college. My dad told me not to worry about it until I graduated. I was on track to get a good job, so we figured I wouldn’t face any barriers. But after I graduated and got a good job, every credit card application I filled out was denied. I went to my local bank branch and asked for an explanation. It turned out I was being denied because I didn’t have a credit history.

What my family didn’t know, but some American-born parents knew, was that it’s easy to open an undergraduate student credit card and start building credit. When my brother went to college, I made sure he got a student credit card so he wouldn’t have to fight the same way I did.

An Early Focus on Asset Building

Growing up, I observed my mom’s work as a Spanish-language interpreter serving immigrants with low incomes. I saw the economic challenges many immigrant families face, and it motivated me to focus my own career on exploring and eliminating these issues. I want to make sure that people living in immigrant communities have the opportunities that I was fortunate enough to have.

When I was an undergraduate, the book The Hidden Cost of Being African American: How Wealth Perpetuates Inequality made a profound impression on me. I was shocked to learn that the wealth gap in America is much larger than the income gap. I wondered if similar research had been done about Hispanic people. I only found one or two papers on the wealth gap between Hispanic and non-Hispanic White Americans. So I made that the subject of my senior economics research project.

From that point on, I focused my research on how communities of color can build assets. Homeownership is the primary form of wealth accumulation in the United States. My passion for equity in building wealth led me to a series of engagements related to housing and homeownership: an internship at the Wisconsin Department of Commerce while pursuing my master’s degree in public policy; a stint working in both the public housing and community development divisions of the U.S. Department of Housing and Urban Development; a research assistant position at Harvard’s Joint Center for Housing Studies.

All this work helped me understand that equitable access to homeownership can play an important role in making wealth building more accessible. For most of us, the road to homeownership runs through the credit system. If you can’t secure a mortgage, you probably can’t buy a house.

So when I arrived at the San Francisco Fed as a senior researcher in Community Development and began studying access to credit and financial inclusion, this was in a way a continuation of my previous work. It turns out that people in immigrant communities and communities of color face very similar hurdles in getting small business loans, auto loans, and other types of credit as they do obtaining mortgages.

Rocio takes notes during an interview.

Barriers to the Financial System

A financial system that works for all Americans will help our country reach its full economic potential. Certain communities, including communities of color and low-income communities, lack equitable access to the traditional financial system.

Many barriers block access to financial services, including:

• Physical access. If you live in a “banking desert,” there may not be a single bank branch in your neighborhood. Without access to an in-person location, it can be difficult to open an account, deposit cash, cash a check, or troubleshoot any problems that come up. For instance, when I had trouble getting a credit card, I was able to resolve it by talking with a banker face to face. If I lived in a banking desert, I may not have had that option.
• Costs. Customers with less wealth on deposit tend to face higher account costs. Unstable income can also be a factor. For example, if you get paid irregularly, you may not have the number of direct deposits you need to avoid checking account fees, or you may get hit with overdraft fees. Recent research reveals that minimum balances and bank fees are among the top reasons people report being unbanked.
• Legacy of discrimination. Before fair lending laws, it was legal to deny credit, including mortgage loans, based on race or ethnicity. These unfair laws are gone, but they left us with a legacy of communities who don’t trust the financial system—or who don’t have experience in the financial system. If your parents or grandparents weren’t legally able to access credit, they won’t be able to pass down knowledge gained from that experience. This history of discrimination can also interact with other barriers—communities of color are more likely to be in bank deserts and account fees can be higher in communities of color—and consumers of color still sometimes face disparate treatment from employees of financial institutions.

How Inequity Persists Even After Homeownership

In my dissertation for my PhD in City and Regional Planning at UC Berkeley, I examined the differences in the neighborhoods where Hispanic and White home buyers purchase homes. A portion of this research was recently published in Cityscape and I enjoyed writing a piece on the topic for the SF Fed blog, “How Do Homeowner Experiences Vary by Race and Ethnicity? Neighborhood Differences between Hispanic and White Homebuyers.”

When scholars and policymakers talk about the benefits of homeownership in the United States, it is often discussed in the abstract. One component that’s frequently missing in these discussions: where is that homeownership taking place, and how does that shape the nature of the benefit to homeowners?

Some benefits of homeownership will be constant no matter where you buy, such as the stability that comes with a fixed-rate mortgage that, unlike rent, can’t be increased at the landlord’s will. But other benefits, such as the wealth building potential of homeownership, depend on your local market. If you were a homeowner in Detroit or Cleveland during the 2008 foreclosure crisis, those markets performed much worse than other parts of the country and haven’t recovered as much since. The Bay Area housing market, on the other hand, also declined during this time, but prices recovered much more quickly. Additionally, metro-level trends can mask variations happening at the neighborhood level.

Using mortgage data from the Home Mortgage Disclosure Act, I found that the communities in which Hispanic and White families are buying look quite different—even when the buyers have similar demographic profiles and are buying houses of the same value, with the same type and size of loans.

The data show that Hispanics are buying in neighborhoods with the following characteristics relative to Whites: fewer White residents, higher poverty rates, lower median incomes, and lower median home values. The neighborhoods are also more likely to have experienced economic decline over time.

These discoveries reveal that mere access to homeownership doesn’t eliminate inequities in housing. Factors that we may not yet understand or can’t easily measure—like discrimination or the ways in which social and knowledge networks affect how we choose our homes—persist in producing unequal outcomes.

Inequity in the Paycheck Protection Program

When it became clear that the COVID-19 pandemic was threatening the existence of millions of small businesses, Congress created the Paycheck Protection Program (PPP) to disperse conditionally forgivable loans to small firms.

I found a correlation between neighborhood income and PPP loans received. Many more of these loans went to high income areas, even when controlling for the number of businesses.

While this research couldn’t tease out the specific reasons for the disparity, researchers, policymakers, and small business advocates have hypothesized that this was an example of inequitable access to the financial system. For example, in the early stages of the program, many banks prioritized their existing customers. Businesses in the communities I study are more likely to be very small businesses—sole proprietors and those with only a few employees—as well as business owned by people of color, women, or immigrants. Entrepreneurs in all of these groups are less likely to have existing business banking relationships. So when the lending institutions, overwhelmed with applications, focused on existing customers, business owners without existing banking relationships were left out.

Can Fintech Improve Access to the Financial System?

Vice President of Community Development Bina Patel Shrimali and I co-edited an issue of the Bank’s Community Development Innovation Review exploring the potential for financial technology as a force for financial inclusion and equity for people of color. We partnered with our SF Fed Fintech team and the Aspen Institute to bring together a number of voices and experts in the field to explore whether fintech can undo some of the legacy of exclusion within the financial system, using new approaches to issues such as digital identity, analyzing credit worthiness, and practical access to services.

The article I co-authored for the issue, “The Racialized Roots of Financial Exclusion,” outlines inequities across multiple domains over time that brought us to the uneven access we have today and introduces the potential for financial technology to reduce barriers.

Another article in the issue, “The Next Frontier: Expanding Credit Inclusion with New Data and Analytical Techniques,” exposes the limits in traditional credit scoring, which contribute to financial exclusion. Credit reports generally draw on data that some people—especially people of color and those with low-to-moderate incomes—often don’t have, such as years of regular mortgage and credit card payments. In the same way that the barriers I listed earlier can keep someone from getting that first credit card, a lack of credit history may also keep potential homeowners from acquiring a mortgage. One exclusion leads to the next. The traditional financial system is limited in understanding other ways people may have established their potential as safe borrowers, such as years of on-time rent and utility payments or a healthy positive cash flow. Some fintech companies are looking to tap other data sources to produce alternative credit scores. Machine learning also may hold promise for predicting future borrower behaviors based on limited available data.

Public-Private Partnerships for Rebuilding Small Businesses

There are potential roles for the government and the private sector in growing small businesses’ access to credit. I recently completed a case study examining an innovative public-private partnership: the California Rebuilding Fund.

In 2020, when so many small businesses in California were struggling to stay afloat due to the pandemic—and as I found in my research, many were unable to secure PPP loans—community development financial institutions (CDFIs) realized they would need additional funds for lending to these businesses. But if these institutions had each raised funds individually for this effort, the scope would have been relatively limited.

Instead, the state of California partnered with CDFIs and private investors, allowing the CDFIs to draw on their experience working in low-income communities and communities of color to identify good candidates for small business loans and to process those loans. The CDFIs then transfer a majority of those loans to the Rebuilding Fund. The Fund repays the loan balance to the CDFI, enabling the CDFI to make another small business loan. This program is creating liquidity in a time and place where it is badly needed and facilitating more lending than these institutions would be able to do in the absence of the fund.

Another aspect of the California Rebuilding Fund is risk shifting: the state agreed to take the riskiest position for these loans. This allows the program to attract more private capital and to keep the costs very low for the small business borrowers.

My case study analyzes the components that went into this innovative approach to pooling capital and risk and how it could be successfully replicated to improve access to the financial system for more small businesses. It also explores the challenges exposed by this program, which future innovators could learn from.

In my two years at the Bank, I’ve been able to engage in a number of projects exploring how low-income communities and communities of color access credit, and how the financial system could be more inclusive. Whether I’m studying housing, credit, or something else, I always center my approach around how to increase and equalize access to the financial system.

Access to the banking system and other financial services is critical to building wealth and even to just living our daily lives to the fullest extent possible. As San Francisco Fed President Mary Daly has said, eliminating inequalities is fundamental to “an economy that’s sustainable and works for everyone.” I couldn’t agree more. And I remain committed to revealing and breaking down the barriers that restrict people from fully participating in our economy.

Rocio Sanchez-Moyano is a senior researcher in Community Development at the Federal Reserve Bank of San Francisco.

This essay first appeared on the San Francisco Fed’s Medium channel.

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The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.

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On Thursday/19 at 3pm, newly-hired public banking consultant HR&A Advisors will join the Reinvest in San Francisco Working Group in formulating a plan to establish San Francisco’s first public bank since the city was founded more than 200 years ago.

Last June, the Board of Supervisors took an important step towards setting up a public bank for the city by unanimously passing the Reinvest in San Francisco ordinance introduced by Supervisor Dean Preston. Another dramatic step came on April 15, 2022, with the first official meeting of the Working Group, composed of financial professionals and community representatives charged with preparing a business plan for the bank. After being approved by the Board of Supervisors, the plan will be submitted to the California Department of Financial Protection and Innovation in Sacramento.

Advocates gather in front of City Hall to push for an SF public bank.

While there are 910 public banks worldwide commanding assets of $49 trillion, the US has only one, in North Dakota. Consequently, there is no blueprint for setting up public banks in the US.

Nevertheless, San Francisco is determined to be among the first California communities leading the way for the US to join nations as diverse as Germany, Switzerland, Costa Rica, Brazil and Japan, which have had public banks successfully operating for generations.

Thomas Marois, an expert on public banking from Oxford University, will join members of the Working Group at a Local Agency Formation Commission meeting the following day, Friday/20 at 10am.

The nine-member Working Group is composed of three financial experts and four authorities in community concerns affected by the public bank, such as affordable housing, environmental justice, and small business support, in addition to representatives from the city treasurer and controller. San Francisco is fortunate to have Sylvia Chi, one of the authors of the historic California legislation authorizing public banking (AB 857), in the group.

A public bank for San Francisco would result in significant benefits for the city. Foremost, it would be able to amplify city financial resources for projects that directly improve the lives of San Franciscans. Virtually all of the receipts paid to SF (taxes, fees, fines and state and federal allocations) are currently entrusted to massive corporate banks with little interest in making substantial investments benefiting locals.

Among the advantages:

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• A public bank could assure financing for permanently affordable energy-efficient housing. The most effective means of doing this is converting existing buildings into affordable housing. Public banks can provide bridge loans and loan guarantees for purchasing existing properties, removing them from the speculative housing market by converting them into permanently affordable social housing. A public bank could speed up construction of new affordable housing by securing sources of capital more efficiently.
• A public bank could prioritize local investments in badly needed green infrastructure such as cost-saving and environmentally beneficial solar panels, LED lights, transportation electrification, and retrofits for improved insulation and energy saving appliances such as on-demand water heaters in public buildings, which will save taxpayers money while they address the climate crisis.
• A public bank could provide financing for local enterprises such as worker coops like Arizmendi Bakeries and Rainbow Grocery, as well as businesses owned by people of color and women who have been historically denied loans from banks solely focused on profit maximization.

Financial proficiency comes with the inclusion of three leaders in community banking. Jennifer Finger, executive vice president of strategy and development at Beneficial State Bancorp, has worked there since 2015, helping assets grow from $500 million to $1.4 billion. Rafael O. Morales spent nine years at the National Federation of Community Development Credit Unions, representing more than 250 community development credit unions and now serves as senior manager for development policy and impact at Self-Help Federal Credit Union. Elizabeth Dwyer who brings a decade’s experience with nonprofit Community Development Financial Institutions developing operations to deliver microcredit programs that help small businesses, and currently is director of Fondo Adelante (Mission Community Loan Fund LLC) at the Mission Economic Development Agency.[1]

Having people in the Working Group with direct experience in these arenas will provide the necessary background to assure the bank is realistic about what it can accomplish. Architect and planner Fernando Marti has more than ten years of experience in affordable housing as co-director of Council of Community Housing Organizations. Bookstore and bar owner Christin Evans is well versed in the challenges of running a small business. Michelle Pierce has 23 years of experience working in sustainability and social justice while working closely with businesses and residents of Bayview Hunters Point.

Rick Girling is co-director of the San Francisco Public Bank Coalition

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