Lael Brainard: Modernizing and strengthening CRA regulations - a conversation with minority depository institutions

Speech (via webcast) by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, to the National Bankers Association, 15 October 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I want to thank Kim Saunders and Kenneth Kelly for inviting me to join members of the National Bankers Association (NBA) for a conversation today.

As mission-driven financial institutions with a focus on serving minority households and businesses, you see the significant racial disparities in our economy every day. Going into the crisis, Black and Latinx households had significantly smaller wealth cushions to fall back on than the average American household. For instance, Federal Reserve research based on the Survey of Consumer Finances notes that, in 2019 "the typical White family has eight times the wealth of the typical Black family and five times the wealth as the typical Hispanic family."

The COVID-19 crisis has made existing racial disparities even worse. Low-wage and minority workers have experienced disproportionate harm to both their lives and livelihoods as a result of the COVID-19 crisis. As you know from the communities you serve, the crisis has exacerbated pre-existing disparities in the labor market. Black employment, in particular, is recovering at a much slower pace than employment in the overall population, and unemployment for Black and Hispanic/Latinx workers remains higher than for the workforce as a whole. As of last month, the overall unemployment rate had come down to 7.9 percent, which was a marked improvement from 14.7 percent in April. However, the September unemployment rate for Black Americans was still 12.1 percent, more than 4 percentage points higher than the overall unemployment rate.