The Federal Reserve Bank of St. Louis is one of 12 Reserve banks that, along with the Federal Reserve Board of Governors, comprise the nation’s central banking system. As the central bank, the Federal Reserve has three primary responsibilities—conducting monetary policy, providing financial services to banks and the U.S. government, and regulating and supervising financial institutions. These three activities all work toward a common goal—fostering a strong and healthy economy. Community Development departments within the Federal Reserve help promote economic growth and financial stability in communities across the country, especially those in low- and moderate-income (LMI) areas. We do this by bringing together financial institutions, the private sector, nonprofits, public officials, government agencies, researchers, and practitioners to identify and address challenges that confront LMI communities and collaborate on community and economic development initiatives.

The definition of “community development” can vary. Some equate the term to neighborhood beautification projects or affordable housing efforts. Others consider broader definitions, such as initiatives that promote job creation, small-business development and supporting small farms; and any project that revitalizes or stabilizes LMI neighborhoods, such as supermarkets or day care centers. Essentially, community development finance involves economic growth in which people come together and make decisions to organize and pool assets and resources for the purpose of addressing unmet needs and opportunities.