After spending almost 30 years at the Board of Governors of the Federal Reserve System, 10 of those as director of the Federal Reserve Board’s Division of Consumer and Community Affairs, Sandra Braunstein will retire early this year. As director, Braunstein is principally responsible for the development and administration of Federal Reserve policies and functions related to community development and consumer protection regarding financial services. She also oversees the community development departments, housed at the Federal Reserve Board and at the regional Reserve Banks and branch offices, which conduct community development activities and promote increased access to capital and credit in underserved markets.
In this interview, Cascade staff wanted to take the opportunity to acknowledge Braunstein’s contributions, discuss how she thinks the community development field has changed during her time at the Fed, and gain her insight into which opportunities are most promising for the field.
Sandra Braunstein, Board of Governors of the Federal Reserve System
How has the Federal Reserve changed since you started working here? What are you most proud of during your time at the Fed?
Braunstein: Coming to the Federal Reserve was a culture shock. I went from leading a Washington, D.C., neighborhood nonprofit that participated with other community organizations in filing protests against bank merger applications to working for the Federal Reserve. At that time, the community development program at the Fed was small. It focused on providing information and education about the requirements of the Community Reinvestment Act to financial institutions and community organizations. The program has become increasingly sophisticated and employs survey methodology, data analysis, and empirical research to help us understand emerging trends in low- and moderate-income (LMI) communities.
Of the many projects and activities in which I participated over the years, I’m particularly proud to have helped establish a nationally recognized, Federal Reserve–branded biennial research conference that showcases and catalyzes research in the community development field. The conference has a dedicated audience of researchers, industry and community/consumer representatives, and policy professionals and features a community development–focused keynote address by our Chairman.
What have been the most significant changes in the community development field in recent years?
Braunstein: In many LMI communities, the recent financial crisis erased much of the progress that had been made during the past 30 years. Over the past five years, rebuilding communities has been a major focus of the Federal Reserve’s community development work, which includes convening discussions and providing data and information that can be useful in stabilizing communities. Community development is difficult and painstaking work, and I’m very inspired by the people on the ground who continue to focus on creating sustainable communities.
The community development field has changed significantly over the years. Thirty years ago, there was a primary focus on housing issues, with some focus on small businesses and jobs. There is now a strong movement toward a much more holistic concept of community development. There is recognition that communities are sustainable only if all the pieces — affordable housing, jobs, access to transportation, good schools, safe streets, and access to health care and healthy foods — are in place. As a result, connections are being made between the sectors responsible for those various parts.
In your opinion, what are the biggest challenges and opportunities facing the field today?
Braunstein: Housing and community development organizations are finding that some organizations have been working in the same neighborhoods all along, although they never collaborated. Communities are now leveraging expertise and finances across what were once independent sectors. A good example in several locations is the work being done between the community development sector and health policy experts. The Federal Reserve has been on the leading edge of this work, holding forums in various locations to bring the players together. Leveraging resources and working with nontraditional partners present a huge opportunity for community development and can result in more sustainable neighborhoods.
What are the lessons from the recent financial crisis for the Federal Reserve and the Third District?
Braunstein: The financial crisis taught us a lot about effectively understanding community challenges and communicating them to key stakeholders. One of the foremost lessons from the crisis is that the Federal Reserve needs to listen to outside voices to best understand the important issues for consumers and communities.
The Federal Reserve is a data-driven organization, which is a good thing. Unfortunately, data often lag the issues. By the time an issue becomes evident in the data, it may be too late for an effective policy response. While there continues to be a need for data, other qualitative information is important to help us stay on top of emerging issues. A real benefit can be gained from the polling work currently conducted by the community development staff at the 12 Reserve Banks. This information can help us gain “real-time” insight into community needs.
Additionally, the Federal Reserve should continue to use its convening power to bring stakeholders to the table to discuss important issues. Leveraging the institution’s credible platform to make and solidify connections between the private and public sectors can facilitate conversations and, hopefully, foster innovative solutions to real problems.