Michael S Barr: Remarks at the "Banking on Financial Inclusion" conference

Remarks by Mr Michael S Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, at the "Banking on Financial Inclusion" conference, Hope Economic Mobility Forum, Jackson State University, Jackson, Mississippi, 7 February 2023. 

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

Thank you, Bill, and thank you to Hope Enterprise Corporation and Jackson State University for inviting me to speak today. It's good to be back in Mississippi. It's Black History Month, and I feel privileged to be at this great historically Black university, speaking on a topic of such vital importance to our country.

I made my first trip to this state as a government official a quarter century ago, to Clarksdale, Mississippi. I remember it was a sweltering July day, and we visited a local cabinet manufacturer with Bill Bynum, who, in my judgment, is one of the heroes of the economic justice movement. The company had received financing from Hope, which was then known as the Enterprise Corporation of the Delta. On that hot day, President Clinton called on banks to do more to meet the needs of their communities, to do more under a revamped Community Reinvestment Act (CRA), and to help set up or support Community Development Financial Institutions, or CDFIs, such as Hope, partnering with the newly created CDFI Fund at Treasury.

And he called on Congress to pass the New Markets Tax Credit (NMTC) to provide tax credits to individuals and corporations for making equity investments in Community Development Entities (CDEs) in places such as the Mississippi Delta. This, in turn, would help establish and grow local businesses, create jobs, increase local purchasing power, and generate more local investment opportunities.

Congress enacted the NMTC in December 2000 with bipartisan support. Since its inception, CDEs like Hope have used the program to support a wide array of job-creating businesses that increase local access to goods and services as well as to increase the availability of important community infrastructure, such as rural hospitals. To date, the NMTC program has awarded over $71 billion of tax credits, which translates, among other things, into 857,000 jobs and almost 239 million square feet of commercial real estate. In addition, the CDFI Fund has awarded more than $5.5 billion in grants and guaranteed over $2.1 billion in bonds.