When Banks Work Together: Lessons from a CRA Association

In January 2012, staff from the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve Bank of St. Louis gathered a few local bankers together to suggest the formation of a professional organization to actively promote efforts to meet the credit needs of the community. The Metropolitan St. Louis Community Reinvestment Association (MSLCRA) was established. After just one year, we had 28 member banks and had sponsored or participated in several community outreach events, provided professional development and networking opportunities to local bankers, and shared presentations from local community-based organizations.

The MSLCRA’s purpose is to:

• work to identify the credit needs of the community and actively promote efforts to meet those needs;
• assist small-business owners to maintain and increase their capacity through providing technical assistance and training, which will result in job creation and promotion of economic development; and
• provide and promote professional development for community development professionals in the banking industry.

Any bank or savings bank that has an assessment area in the St. Louis MSA and is subject to the requirements of the Community Reinvestment Act is encouraged to join the association. Member banks pay dues of $500 annually. General body meetings are held quarterly and are open to members only.

“Signature” Events

Poverty Simulations

One of MSLCRA’s signature events is the Poverty Simulation, which allows participants to experience what life is like for families faced with poverty as a daily reality. Participants are mixed together to form various “families.” They role-play scenarios that are inspired by actual events that take place in the lives of low-income families every day.

Member banks are encouraged to send all employees—including executives—to experience the Poverty Simulation. We also encourage nonprofits, religious organizations and other individuals who work in low- and moderate-income (LMI) communities to participate, continually adding new partners to our list.

The outcomes we hope to achieve are to:

• increase understanding of poverty and create a dialogue for ways to help combat it;
• encourage member banks to take steps to assure their products and services are designed and provided in a manner that takes into consideration the needs of low-income bank customers; and
• create partnerships between banks, nonprofits, community organizations and other individuals who work with the LMI community.

Speed Networking

Similar to the dating version, the MSLCRA Speed Networking event is a great way to meet individuals and become aware of organizations that are working in the community development space. Bank representatives are set up around the room, and organizations are given seven minutes to connect/re-connect with them. Participants have reported that this is a wonderful opportunity to introduce your organization or catch up with existing partners, all in one evening. The event provides a platform to discuss issues ranging from a nonprofit’s initiatives to the banking needs of its staff.

Annual Conference

In September 2017, we hosted our third annual professional development conference, which once again kicked off with a community tour led by host guides from Beyond Housing, St. Louis Equity Fund and Rise STL. Our goal was to provide a grand tour of some of the spectacular work being done in our local communities, showcasing the work of these three fine organizations.

Participants from previous conferences found them to be an impactful two days of networking and learning the latest information about the regulatory hot topics for both compliance and community development professionals.

Advice on Starting an Association

• Identify leaders within the banking community and include representatives from all size banks.
• Utilize a local university for legal advice on creating articles of incorporation, bylaws and reporting requirements.
• Identify your community needs and community partners.
• Hold regular meetings with formal minutes.
• Create an annual budget that includes dues, assessments, fees and expenses.
• Build a website.
• Address miscellaneous items: antitrust policy and compliance guide, board member job descriptions, code of conduct, directors and officers (D&O) liability insurance, and ethics policy.

Lessons Learned

• Commitment from and availability of board members is critical.
• Early recruitment of all local institutions helps to insure all voices are heard.
• May be better suited as 501(c)(6) than 501(c)(3).
• Doesn’t conflict with individual bank programs/opportunities.
• Banks really can work together!

Benefits to the Community

• One-stop shop—provides the ability to reach the majority of local banks through one organization.
• Develops easier access to financial education opportunities.
• Creates better-informed banking partners.

Benefits to Banks

• Provides affordable local access to professional development.
• Working together to address regional credit needs creates a collaboration that helps everyone.
• Contributes to increased knowledge of local events and CRA opportunities.
• Generates heightened awareness by senior management of CRA issues.

To learn more about the MSLCRA, including membership information, visit http://mslcra.org.

Robyn Heidger is the senior vice president of Strategic Alliances & Inclusion at Enterprise Bank & Trust.