PART 2: OUR WORK
St. Louis Fed Branch Offices
BRINGING THE FED CLOSER TO THE COMMUNITY
It wasn't long after the Federal Reserve System was created that Reserve banks saw the need for additional offices to serve their districts. St. Louis was certainly no exception. The Federal Reserve Bank of St. Louis opened Nov. 16, 1914, and in short order, branches were opened in Louisville, Ky., Memphis, Tenn., and Little Rock, Ark., in 1917, 1918 and 1919, respectively.
The roles of the branches have changed over the years. For example, the Memphis Branch was started as a seasonal agency (a limited-service office open only part of the year) to provide discount window loans and other services to area member banks during the cotton season. (See the essay "Reaching Our Constituents" for more on the history of the branches.) Today, the Memphis Branch staff is responsible for cash services, bank supervision, community development and economic education.
Branches remain important in helping the St. Louis Fed serve its region and fulfill its mission. One of the most significant contributions of our branches is gathering anecdotal economic information about their regions. These data help the St. Louis Fed president and our other economists to understand local economic conditions.
Little Rock, Ark.
Gathering in-depth information for a district covering more than 180,000 square miles would be a challenging task to accomplish from a single location, especially given the diverse nature of the businesses and local economies in the Eighth District. Branches allow not only for a more efficient collection of information, but also for deeper relationships through staff involvement in their local economies, producing a breadth and depth of information not possible from hundreds of miles away.
Branches gather some of this information through their local boards of directors and the District's Industry Councils. Each board is a diverse group of local business leaders who meet eight times per year. They provide anecdotal information on a variety of industries, such as banking, retail, health care and telecommunications. Again, this information is passed on to the Bank's president and other key staff, who consider it in monetary policy deliberations.
Industry Councils meet semiannually to keep an open line of communication between the Fed and industry representatives throughout the District. The District has four councils, focusing on agribusiness, health care, real estate and transportation. Each branch, as well as the main office in St. Louis, supports one of the councils: Louisville supports the health care council; Memphis, transportation; Little Rock, agribusiness; and St. Louis, real estate. The council members' observations complement the data and information developed through the Federal Reserve's Beige Book, the St. Louis Fed's Burgundy Books and meetings of the Bank's boards of directors.
This flow of information is truly an exchange, not just a one-way channel. It helps the public, business leaders and community bankers—the groups representing Main Street—to connect to the branches and, thus, the Fed. In turn, the exchange allows the branches to disseminate economic data and related information from higher levels of the Fed to key audiences, allowing these audiences to make more informed decisions about their organizations.
The exchange of information takes place on a one-to-one basis, too, as in the Financial Institution Touch (FIT) program carried out by the branches' executives. The FIT program was established in 2009 as a means of discussing issues and conditions with local financial institutions that may not have established contacts with the Fed, may not be member banks or are located too far away for their executives to attend Fed events. The branch executives visit each of the institutions in their zones at least once every two years.
The Community Development function at the branches is another example where the St. Louis Fed's deep knowledge and strong relationships help local community-based organizations and financial institutions. The Fed's community development specialists are out in the communities they serve, identifying and addressing an expansive range of challenges confronting low- and moderate-income communities. The relationships they develop also allow for gathering data about local community and economic development conditions, and they allow the specialists to share their expertise and act as resources for information, technical assistance and regulatory guidance to financial institutions, community-based organizations, government entities and others.
Key areas of focus include affordable housing, the Community Reinvestment Act, community and economic development, small-business lending, issues related to credit access in underserved markets, neighborhood stabilization and household financial stability. In addition, local specialists facilitate productive partnerships, bringing together various organizations to stimulate ideas and share insights, and serve as catalysts for local community and economic development initiatives.
The branches also serve their local communities through educational outreach. The education programs administered by the branches are customized for local users. Economic Education staff members at each branch use the St. Louis Fed's award-winning education programs to help local teachers better prepare for classroom instruction on economics and personal finance.
And finally, the Federal Reserve Bank of St. Louis' Banking Supervision and Regulation division, under the delegated authority of the Federal Reserve Board, oversees the safety and soundness of Eighth District bank holding companies, thrifts and state member banks. As part of this mission, the Bank conducts on-site examinations with a staff of highly trained examiners who are based out of the St. Louis headquarters, as well as out of satellite offices in the Little Rock, Louisville and Memphis branches.
All of these "branching out" efforts are aimed at providing Fed services at the grass-roots level throughout the District. These local connections also aim to ensure that the many voices of Main Streets across the District are heard by policymakers in St. Louis and Washington.