The American Financial System Could Learn From the Boston Fed

The economic health of low- and moderate-income members of the local community has always been an important issue to the Federal Reserve Bank of Boston. Through innovative research and ground-breaking initiatives they have developed several programs to help improve the community.

The institution even started the first conference on income equality.

This year, The Boston Federal Reserve Bank launched the Working Cities Challenge program. As it continues to grow and gain more success it could easily become a model struggling cities throughout the United States could readily adopt. Locally, the program has challenged government officials, nonprofit organizations, and business leaders in midsize Massachusetts cities with poverty rates higher than the median to work together on a three-year plan to improve.

Then, in January, six cities were awarded, collectively, $1.8 million to get started.

Now the Federal Reserve Bank of Boston is looking for more ways to improve the disadvantaged and disenfranchised people of Massachusetts. They are considering a savings-matching program for low-income community college students which can help them pay their expenses. It is a project underwritten by the Midas Collaborative-a nonprofit network based in Allston which helps underprivileged residents build more secure financial futures.

Boston Fed president Eric S. Rosengren divulges 'Some of the other reserve banks focus just on economic issues or just on banking issues. We're a little bit more eclectic.'

But this approach seems to have been successful as the Boston Fed has a celebrated history of research and development in the field of income inequality. By taking banking outside of interest rates and account numbers and studying racial discrimination in mortgage lending, for example, they have incited many positive changes in bank practices, at least locally.

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