Equitable Access to Small Business Credit: Welcome and Introduction

SF Fed President Mary C. Daly opens Equitable Access to Small Business Credit. October 14, 2021 (video, 09:21 minutes).


The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.


  • Mary C. Daly, President and CEO, Federal Reserve Bank of San Francisco
  • Laura Choi, Senior Vice President, Public Engagement, Federal Reserve Bank of San Francisco


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Mary Daly:

Good morning and welcome. Thank you so much for joining us for this event. I know it goes without saying that the topic of equitable access to capital is critical and demands our very best work and attention. And I’m looking so forward to hearing what we have to say today, what the webinar teaches us, and what our direction will be moving forward. Now before we begin though, I want to say a few things about the importance of this topic.

In my role as a Federal Reserve Bank President, and by the way, if you don’t know me, I’m Mary Daly, President of the Federal Reserve Bank of San Francisco. But in my role as President of the Federal Reserve Bank and member of the Federal Open Market Committee, every day, literally, I’m asked about the outlook for the economy, how we’re doing, where we’re going, and what’s going to happen in the future. And over the past 18 months, the answer has been sad and simple. It’s been singular. As goes COVID so goes the economy.

But as I was reflecting on this conference and what I wanted to say, I realized I could have just as easily said over these past 18 months, “As goes small business, so goes our economy,” because in many ways, every way, small businesses have been on the front lines, bearing the burdens of shuttering, partially reopening, shuttering again, all the while managing the daily disruptions that COVID has brought to us and the regular challenges, the everyday challenges of running a small business in the first place. And needless to say, it’s been hard and some haven’t made it. And this, the struggle of these businesses over this time has been hard on the overall economy and in particular on the communities that small businesses serve.

I live in Oakland, California, and I see this literally every day. I walk up and down the streets and I saw the signs early on about small businesses shuttering, and we’ll come back, and then some came back and then some put their signs back up and we shut and then some left altogether. And watching how that affected the community and the resiliency of the community, it was a stark reminder that small businesses really matter.

But the data tell us that too. They tell us that even though these businesses are small, they play a large role in supporting jobs and supporting growth. The facts amplify what I see day to day in my own community. Small businesses employ about half of all private sector employees in the US, and they are key driver of growth and innovation and resiliency. Those people who are open when you walk up and down the street, the people who are always there when you need something from your local vendor, they’re there.

And when you put it that way, small businesses are an essential pillar of a thriving economy. And it’s through that lens, this essential pillar of a thriving economy, that the persistent fact that we have unequal access to capital to support, maintain, and open businesses, that some can get it and some can not. That is not just a problem that’s painful. It’s a problem that’s bridling our economy.

And while gaps in access by race, ethnicity, and gender have been around for a long time in our financial system. In fact, I’ve probably been to a dozen or more seminars and conferences about how we might solve it. The pandemic has been a stark reminder that the financial system works better for some than it does for others.

And so the question we bring ourselves to today is what can we do about it? And importantly, I’d like to say that this webinar is not about what we can tell each other about why it doesn’t work, but importantly, about what we can do to make sure that we’re not having another webinar five years from now that still talks about why it doesn’t work.

Now, as many of you know, the Federal Reserve plays an important role in supporting access to credit for small businesses. Our supervisory work impacts everything from the way banks assess the risks for small businesses, how they think about those, to the economics of making small dollar loans. And we also play an important role in thinking about programs like the Community Reinvestment Act. And we’ve worked hard with other regulators to modernize CRA, so that it better fits the economic landscape and the needs that we see coming, not just today, but emerging in the future.

And we are there in emergencies. For example, when COVID-19 arrived, in collaboration with the Treasury, we took unprecedented steps to support lending to small businesses by providing liquidity to the Paycheck Protection Program lenders. And we adjusted our regulations and supervisory programs to ensure that the banks, especially community banks, were there to lend to the communities and customers who needed it most.

And so as I indicated, what we ask ourselves today at this moment is not just what worked about those programs, but what more is needed to ensure that we can move closer and closer and finally to close to complete to a financial system that works for everyone. And the answers aren’t always going to be clear, but the mission is. So today we will start a conversation that we know will lead to action. We want to hear firsthand, and we will, from our stakeholders about what needs to change. We’ve asked them all one really simple thing, be bold and candid in sharing your views, tell us what the Fed and other regulators need to do and can do to foster a more equitable financial system.

When we evaluate the success of today, it will not be judged by what we hear, but what we do with what we hear. So the listening session will just be a beginning. It allows us to take what we hear and use it as a springboard for change. And as you listen to the ideas of our webinar, and as you listen to the things that people bring to the forefront, to me, it will be very important to remember the very specific thing, that this is not just about making a fairer system for fairness’ sake. That is clearly important and something we should aspire to. But at its heart, this is about making an equitable financial system that allows for better growth, promotes a healthy and stable economy that works for everyone, and importantly, delivers that kind of resiliency of community that we talked about, that I talked about at the top of the remarks.

Small businesses are the fabric of our communities. They make healthy, resilient communities. And having everybody be able to participate in that is important for the individuals, but also important for our broader economy. When more people, it’s just obvious really, but when more people have an opportunity to generate and nurture their ideas, it’s good for all of us. It makes the economic pie bigger, and it makes us stronger as a nation.

We are facing a moment in history where our situation demands action. And today I hope what we learn is that we have some ideas out there that are bold. And what we will need to do is listen to them and collectively decide how to act. It will take each and every one of us. It will take the private sector, the public sector, the Fed and community groups coming together to make the right decision. So my call to action for today is that anything less than action shortchanges our economy and our future. Thank you.

Laura Choi:

Thank you, President Daly for your remarks and for setting the stage for today’s discussion. I’m Laura Choi, Senior Vice President of Public Engagement at the Federal Reserve Bank of San Francisco, and it’s a pleasure to welcome all of you today. As President Daly mentioned, the San Francisco Fed is leading this effort to listen, learn, and most importantly, take action in ways that will support all entrepreneurs and their many contributions to the economy.

Today’s event will feature speakers from across the small business ecosystem, discussing both barriers and opportunities for expanding equitable access to small business credit. First, we’re going to hear from organizations that work directly with underserved small business borrowers, including people of color, women, and low-income entrepreneurs. Then we’ll be joined by Sheila Bair, former Chair of the FDIC who will address inclusive ways to provide financing that serves the needs of both small businesses and their lenders.

We’ll round out the event with a focused discussion on what we can learn from the research on small business credit, as well as a separate panel to hear directly from different types of small business lenders.