Smaller banks, including community banks, are indispensable in providing access to financial products and services, especially in remote or rural areas of the U.S., Federal Reserve Governor Michelle Bowman said today. Speaking to the Alaska Bankers Association, Bowman said that while the nation has made significant progress in expanding access to financial services and deposit accounts, remaining barriers include geographic location, access to products that meet specific customer needs, the absence of financial literacy education, lack of access to the internet and technology, and language.
At the same time, Bowman pointed to the role of banks and community development financial institutions in providing access to financial services to Indigenous populations like those in Alaska.
“Here, in Alaska, your banks are the frontline providers for your communities,” she said. “As you know well, community banks support small businesses through credit and technical assistance and targeted support specific to customers in their communities.”
Bowman also spoke about the Fed’s mission to build up the institutional capacity of mission-driven organizations such as CDFIs, minority depository institutions and women-owned deposit institutions.
“These mission-driven banks and CDFIs are often vital sources of capital to many underrepresented small businesses,” Bowman said. “CDFIs generally target specific underserved markets. For example, there are many Native CDFIs, including several here in Alaska, that support Native communities by providing access to credit, capital and financial services. While there has been some significant growth in Native CDFIs, they cannot singlehandedly resolve the credit needs of this population. This effort will require partnerships with banks, state and local governments, and community stakeholders.”
