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LEADING
LISTENING
ANNUAL REPORT 2019

The Federal Reserve Bank of Philadelphia is one of the 12 regional Reserve Banks
in the United States that, together with the Board of Governors in Washington,
D.C., make up the Federal Reserve System — the nation’s central bank. The
System’s primary role is to ensure a sound financial system and a healthy
economy. The Philadelphia Fed serves the Third District, which is composed of
Delaware, southern New Jersey, and central and eastern Pennsylvania.

2019
TABLE OF

CONTENTS S
04

PR E S I D E NT’S LE T T E R

F I R ST V I CE PR E S I DE NT’S LE T T E R

LE A D I NG WI T H R E S E A RCH

POWE R I NG UNCOM MO N PA RT NE R S H I PS

DR I V I NG D I A LO GUE S I N O UR D I ST R I CT

BOA R D O F DI R E CTO R S

COM MUNI T Y D E POS I TO RY I NST I T UT I O NS ADVISORY COUN CIL

E CO NOM I C A ND COM MUNI T Y A DV I S O RY COUN CIL

M A NAG E M E NT COM M I T T E E

A D DI T I O NA L BA NK O F F I CE R S

F I NA NCI A L STAT E M E NTS

“WE A R E I NT E NT O N A T WO-WAY
E XCH A NG E A ND PA R A MO UNT TO T H AT
I S T H E ACT O F LI ST E NI NG.”

None of these community events, research papers, and
conferences would happen without our committed staff.
Every day, our employees work to support the mission
of the Philadelphia Fed and the Federal Reserve System
to maintain a strong economy and price stability. James

As the president of the Philadelphia Fed, I frequently

D. Narron, the Bank’s first vice president, highlights the

deliver public speeches, and our economists give

dedication and commitment of our employees (page 6).

presentations. Both communication forms are

We are immensely proud of their accomplishments.

critical for disseminating our research and data. But
engagement is about having conversations. When

Our efforts dovetail with an initiative launched by

we have these dialogues with District residents,

the Board of Governors. Called Fed Listens, the project

community and industry leaders, researchers,

aims to learn how the general public perceives the

policymakers, and others, it’s through the equally

Fed’s work, mission, and dual mandate. The Philadelphia

important lenses of leading and listening.

Fed held our own Fed Listens event in May, with a
community tour of Camden and a two-panel session

“The year 2019 was one

Leading means helping define the important issues,

made up of advisory council members, academics, and

in which we worked

contributing unbiased data, bringing the right voices

business leaders. The day gave us valuable insights

to deepen the Bank’s

to the table, and guiding the conversation toward

into public perceptions (page 23).

engagement and

actionable solutions. Our role in leading conversations

impact,” says President

focuses on two assets of the Fed: our reputation as a

The ultimate goals of this Annual Report, Fed Listens,

Patrick T. Harker.

source of compelling knowledge and our convening

and our engagement efforts are to be more open

authority. These two strengths are detailed in our essay

with the public and to explain what the Fed does and

on the Bank’s research efforts (page 8) and our story

how we are working to help local communities and

on bringing together uncommon partners (page 14).

safeguard the economy. I hope you enjoy reading

PRESIDENT’S LETTER
A

s I write this letter in early 2020 and look back on 2019, in some ways, it seems very far away. I recognize the

serious challenges a pandemic presents to families, businesses, and communities all over the United States. While
the world we live in has changed, the mission of the Federal Reserve Bank of Philadelphia — and the Federal Reserve
System — remains the same. We are committed to helping the people and communities of the Third District and the

about the work we did in 2019 to achieve those goals.
At the same time, we are intent on a two-way exchange
and paramount to that is the act of listening. That

As we move forward in 2020, these efforts will not

means other Fed leaders and I travel across the District,

change. The Federal Reserve as an institution was

meeting with residents and hearing what they have

created precisely to help the people of our country

to say about their economic situations, local business

weather challenging times. We will continue to lead

activity, and community development projects. What we

and listen and move toward solutions that benefit

learn from them is equally important to our approach.

the communities of the Third District and ensure the

You can read about our tours, roundtables, and other

strength of the overall economy.

meetings in the essay on District outreach (page 18).
Sincerely,

country thrive and to protecting the integrity of the financial system.
The year 2019 was one in which we worked to deepen the Bank’s engagement and impact. We did this by connecting
with financial industry leaders, experts in emerging fields of study, local community leaders, and our colleagues within
the Federal Reserve System.

PATRICK T. HARKER
PRESIDENT AND CEO

FIRST VICE PRESIDENT’S LETTER

“O UR BA NK’S I NI TIATIVES REFLECT THE
S E NS E O F PUBLI C SERVICE THAT DRIVES
T H I S I NST I T UT I O N.”

he achievements we accomplished in 2019, as in the years before, are a

testament to the solid foundation we have built over the years.
As I write this message in spring 2020, we find ourselves in uncharted
territory. During these turbulent times, I’m deeply gratified and proud of
our talented employees at the Philadelphia Fed. They have stepped up and
continued to support our mission as our nation and the world collectively
confront the challenge of the coronavirus pandemic. Through their efforts,
we had a very successful year in 2019, and we find ourselves on sure footing

The people who work at the Fed are passionate about

as we navigate this unprecedented situation in 2020.

our mission and about helping District communities.
Our Bank’s initiatives reflect the sense of public service

Additionally, our outreach efforts into the Third District keep expanding.

that drives this institution. We helped Philabundance

We added bankers’ roundtables to our Field Meetings in 2019, which marked

restock pantries for those in need, donated hundreds

the meetings’ 74th anniversary. These meetings give us a chance to connect

of books to the John Hancock Demonstration School,

with regional leaders in the financial industry and exchange information on

sponsored toy drives during the holidays, and assisted at

economic and business conditions.

Andrew Jackson Elementary School on Martin Luther King
Jr. Day of Service.

Likewise, William G. Spaniel, senior vice president and lending officer,
continued his series of District, Diners & Dialogue events. These meetings
with small groups of bankers in an informal setting enabled Bill to answer
any questions Third District bankers may have and to learn more about their
concerns (see page 21).

“During these turbulent times, I’m deeply gratified and

I thank our employees for their work and their

proud of our talented employees at the Philadelphia

dedication in making 2019 such a successful year. And

Fed,” says First Vice President James D. Narron.

you will undoubtedly see why in the pages that follow.

We also monitor the economic pulse of the Third District through our two
advisory councils: the Community Depository Institutions Advisory Council,
composed of members from commercial banks, thrift institutions, and credit
unions, and the Economic and Community Advisory Council, with members
from the public and private sector who help track emerging trends, issues,

JAMES D. NARRON

and market conditions. We deeply value their insights, which inform our work

FIRST VICE PRESIDENT AND

serving the Third District.

CHIEF OPERATING OFFICER

“ T HE EFFECTS O F GEN T RIFICAT IO N O N T HE W ELL-B EIN G AN D OPPORTUNITY OF
O RIGIN AL RES IDEN T ADU LTS AN D CHILDREN” J U L Y 2 0 1 9

EADING WITH RESEARCH

The influx of high-income individuals into center
urban neighborhoods has raised alarm about changing
neighborhoods and low-income residents being forced
out. But research done by Davin Reed, economic

W hen it comes to topics related to the

advisor in the Community Development and Regional
Outreach Department, shows that the story is more

LESS EDUCATED HOMEOWNERS BENEFIT
FROM RISING HOUSE VALUES, AN IMPORTANT
COMPONENT OF HOUSEHOLD WEALTH.

nuanced. His work — coauthored with Quentin Brummet

economy, financial markets and regulation,

of NORC at the University of Chicago — uses new data

which other research has shown can benefit children

that follow the same individuals over time, allowing

in particular. Less educated homeowners benefit

community development, or consumer finances,

them to directly measure things like displacement,

from rising house values, an important component

income, and neighborhood quality.

of household wealth. The research also highlights

getting the context, facts, and figures correct
is critical to both defining the issue and devising
an appropriate and workable solution.

The in-depth, nonpartisan research done by

that the alternative to a low-income neighborhood
The authors find that while gentrification does increase

gentrifying is usually not stability, but decline in the

displacement, the effect is small relative to baseline

form of falling populations and rising poverty. Overall,

mobility rates. Over a 10-year period, 70 percent of

the authors conclude that while gentrification may

less educated renters move away from nongentrifying

present some challenges, it also presents opportunities

neighborhoods, but this number only rises to 75

that policymakers should leverage in order to

percent in gentrifying neighborhoods. They also find

promote more integrated, accessible communities.

that those who move from gentrifying neighborhoods

economists and analysts throughout the Bank

do not end up in worse (higher poverty or more

The paper received media attention because it

distant) neighborhoods. At the same time, the 25

challenged conventional wisdom through the careful,

relies on unbiased data and analytic methods

to 30 percent of less educated renters who stay in

impartial analysis of a new data source. Reed’s work

gentrifying neighborhoods experience increased

was cited in stories that ran in the Financial Times,

that are free from agendas, punditry, or what may
be trending on the Internet. The work furthers our

exposure to higher-opportunity neighborhoods (lower

The Economist, The Philadelphia Inquirer, the Detroit

poverty, higher education, and higher employment),

Free Press, and The Seattle Times.

understanding of the economy, how individuals
make financial decisions, and the consequences
— intended or not — of policies or programs put
in place. In 2019, the Bank published more than 60
research-related documents and hosted dozens
of research conferences. Here is just a sampling
The automation of work is one topic covered in the many
research-related Bank documents published in 2019.

of what we found out in 2019.
Davin Reed’s research refutes the popular notion that
gentrification harms all current residents.

“UNDER THE NEW LANDSCAPE, BIG NO
LONGER BEATS SMALL, BUT FAST BEATS
SLOW — THUS, WE HAVE SEEN THE
INDUSTRY SHIFT TO THE FAST CLOUD
COMPUTING AND TO EXPLORE THE

F I NT E C H CONF E R E NC E
NOVEMBER 2019

FASTER QUANTUM COMPUTING.”
Technological innovations have been disrupting the
economy and banking industries for generations. But
Julapa Jagtiani is the organizer of
the Bank’s fintech conferences.

what’s novel and challenging in today’s world is the
speed of change. The Philadelphia Fed has been a
leader in fintech research, exploring issues surrounding
the impact on credit access, financial stability, and
consumer finance. In November, the Bank hosted
the Third Annual Fintech Conference, which brought
together scholars, regulators, and industry leaders for
two days of robust discussion.
Following a keynote address by Chicago Fed
President Charles Evans, the discussion turned to
the role of big tech in financial services, with speakers

Max Levchin, Founder and CEO of Affirm and

from Google Cloud, Harvard Law, Square Financial

Cofounder of PayPal, discusses lending challenges

Services, Amazon, and the Peterson Institute for

at the Third Annual Fintech Conference.

International Economics. “Under the new landscape, big
no longer beats small, but fast beats slow — thus, we
have seen the industry shift to the fast cloud computing
and to explore the faster quantum computing,” said
Julapa Jagtiani, senior economic advisor and economist
in Supervision, Regulation, and Credit. The panelists
covered the impacts of this shift on financial stability,
cybersecurity, and consumer protection — with
examples of the Chinese tech company Alibaba and
Capital One data breach under Amazon Web Services.

Another panel debated whether central banks should
issue digital currency themselves or take a supporting
role in issuing digital currency. Timothy Lane, deputy
governor of the Bank of Canada, announced that his
central bank had begun developing contingency plans
and studying the integration of digital currency into

THE INFORMATION-GATHERING AROUND
FINANCIAL INNOVATION IS CENTRAL
TO THE FED’S MISSION TO UNDERSTAND

the Canadian banking system.

AND SAFEGUARD THE NATION’S

Other sessions covered digital currencies, the latest in

FINANCIAL SYSTEM.

fintech regulations, and fintech’s role in small business
lending. The information-gathering around financial
innovation is central to the Fed’s mission to understand
and safeguard the nation’s financial system.

The highway projects of the 1950s and 1960s met
with protests from center-city residents who worried
about the potential harm to their neighborhoods.

The two then analyzed diminished quality of

The new field of neuroeconomics examines how

life from freeway “disamenities,” which include

the brain functions during financial decision-making.

noise, pollution, and delays in moving across

“FRE E WAY RE VOLTS!”
J U LY 2 0 1 9

neighborhoods with freeways, which caused affected
neighborhoods to decline in population, income,
and home prices. The paper notes the findings
are “ important for understanding suburbanization
and the decentralization of cities, and for

Constructing the U.S. interstate system was an
important infrastructure project started in the 1950s.
Opposition to the roads — especially in affected central
city neighborhoods — was swift and fierce. Center-city
residents organized marches and community events
to protest the projects planned to run through their
neighborhoods. At issue: While the freeways provided
increased access for regions outside of the city, the
negative impacts were felt mainly by neighborhoods

understanding the freeway revolts of the 1950s
and 1960s.”
The research highlights the importance of
considering local impact when designing any major
infrastructure project. Thoughtful planning can
mitigate negative effects by burying highways beneath
neighborhoods. One example cited in the paper
was the Big Dig in Boston, which buried a section of

closest to the city center.

Interstate 93 under the heart of the city. The authors
write, “Unambiguously, the benefits of new freeway

NE URO E CO NOM I CS CON FEREN CE

Jeffrey Brinkman, senior economist, and Jeffrey Lin,

construction could be greatly improved by considering

AUGUST 2019

vice president and economist, examined freeway revolts

disamenity effects on surrounding neighborhoods.”

and how the opposition changed the nation’s freeway
system and downtowns.

Humans may think they are rational when making
financial and job decisions. But what is really going

After the revolts took hold, completed freeways diverged

on in the brain when spending and investment choices

from initial plans, especially in central neighborhoods.

are made? In August, the Consumer Finance Institute

What Brinkman and Lin found was that the new paths

(CFI) hosted a symposium to enable Bank researchers

increasingly favored factors such as coastlines, rivers,

and other experts learn the research methods and

and historical rail routes, as well as neighborhoods that

findings of “neuroeconomics,” a new field that brings

initially had a higher proportion of black households

together economics, psychology, and neuroscience to

and less educated residents.

better understand consumer decision-making.
“Neuroeconomics may help economists and
policymakers better anticipate trends in the all-

“UNAMBIGUOUSLY, THE BENEFITS OF

important consumer sector,” said Larry Santucci, CFI
senior research fellow and organizer of the symposium.

NEW FREEWAY CONSTRUCTION COULD

For instance, the findings can be used to design

BE GREATLY IMPROVED BY CONSIDERING

better programs aimed at getting people to save for
retirement or not overextend themselves financially.

DISAMENITY EFFECTS ON SURROUNDING

The conference is an example of how CFI adds to

NEIGHBORHOODS.”

the body of research on how consumers earn, spend,
save, and invest. Defining these issues is critical
to the work being done around the Federal Reserve
System, including monetary policy decisions and
Jeffrey Lin, Vice President in the Research Department,

bank oversight.

studied how urban highways affect surrounding

neighborhoods.

OWERING UNCOMMON PARTNERSHIPS

Tesia Lemelle works on the LINC program, which tailors
each session to a community’s unique circumstances.

S upporting a strong and inclusive economy is a key objective for the

[THE LINC] PROGRAM HAS OPENED

Philadelphia Fed. Governments, nonprofit organizations, and the business

THE DIALOGUE BETWEEN NONPROFIT

community are tackling the issues facing the economy both now and in the

ORGANIZATIONS AND BANKS THAT

future. But often these entities have trouble connecting and finding

PREVIOUSLY HADN’T FOUND THE

common ground. The Philadelphia Fed uses its convening power not just

CONNECTIONS LINC HAS ENABLED.

to bring together those disparate groups but also to foster uncommon
partnerships throughout the Third District. The ability to gather different
voices to talk to one another around a table is another way that the Bank
is leading and listening in the Third District.

LI NK I NG NON P ROFITS A N D BA N K S

One reason uncommon partnerships can bring about change is because each
participant contributes insights that create tailor-made solutions for a specific locality.
That was the strategy for the Bank’s Leveraging Lending and Investment for Nonprofits
and Communities (LINC) program, which continued in 2019 to build relationships across
the region, with cohorts in Lancaster, PA, and southern New Jersey. The program, which
coaches nonprofits on building a framework for discussing their work in the context
of the Community Reinvestment Act (CRA) and the CRA’s application, then gives those
nonprofits the chance to pitch potential projects to banks at a matchmaking event.
The program found success not simply by taking a model and dropping it into a new
location but by forging partnerships and finding local voices.

“LINC’s approach really is unique by community, and

The partnerships formed out of LINC have led to

you don’t know until you start talking with nonprofits

everything from banks and nonprofits working together

in the area,” said Tesia Lemelle, program manager in

on CRA training events to one bank — in a matter of

Supervision, Regulation, and Credit (SRC). “Then you

just weeks after one LINC matchmaking session —

really understand what they need and tailor

investing $25,000 in low-income housing tax credits.

the training.”

At a wider level, the program has opened the dialogue
between nonprofit organizations and banks

Although other programs with a similar focus exist,

that previously hadn’t found the connections LINC

in just two years’ worth of outreach, LINC has

has enabled.

differentiated itself through its ability to foster new
and unique connections.

The partnerships generated by LINC haven’t been
limited to those between banks and nonprofits.

“The reaction has been overwhelmingly positive,”

The program’s events have opened up collaborations

said Sydney Diavua, community engagement advisor in

between organizations serving similar populations,

the Community Development and Regional Outreach

allowing them to have a greater impact through both

Department. “We’ve heard, ‘This has met a need for us,’

their community reach and their ability to partner

and we’ve been asked by banks and nonprofits all over

on projects.

the district to come to their regions.”

“While we would love for investments to happen

Ashley Putnam directs the Economic Growth & Mobility

right there at LINC events, we also try to build capacity

Project, which hosted Bank events on economic inequality

with the nonprofits and really try to focus on being

and workforce development.

a resource for them now and in the future,” Lemelle
said. “Something we try to emphasize is that what you
learn from us here, you can apply in the future.”

“IT IS REALLY A GREAT EXAMPLE OF

LINC has also helped Philadelphia Fed staff
build stronger partnerships with both the banks
and nonprofits involved, as well as gain critical
insights into the real-time concerns banks have in
meeting CRA obligations. The CRA was passed in
1977 to fight against discriminatory lending practices,

“IT ALLOWS US TO BETTER UNDERSTAND

TWO ORGANIZATIONS WILLING TO TAKE

THEIR CHALLENGES AROUND THEIR CRA

A RISK AND WORK TOGETHER.”

STRATEGY.”

especially in low-income areas and communities

“What we’ve learned from bringing together diverse

of color. The legislation requires banks to lend

organizations has really highlighted the need for

in all neighborhoods where they have branches.

an inclusive approach,” said Ashley Putnam, director
of EGMP. “This isn’t just a problem with job seekers

“It allows us to better understand their challenges

needing to be better skilled or educational

around their CRA strategy,” Diavua said, adding

institutions giving better training but also employers

that the stronger connections are aiding Fed staff

who need to be rethinking how they’re part of this

as they help banks be more proactive on that front.

equation. We’re not going to get to a solution to
these complex, systemic problems if we aren’t able
to work together.”

The program will continue building partnerships in
2020, with a planned Delaware cohort and an eye

The pay-for-success model demonstrates the return

toward potential opportunities in Pennsylvania and
New Jersey beyond that.

PA RT NE R S H I PS A ND BR E A K I NG
DOWN S I LOS

“When people hear about LINC, they want us to come

on investment in workers, and Putnam noted that it’s
not simply a monetary return — it’s also a community
impact return.

there,” Lemelle said. “It’s definitely demonstrating
“There’s something really incredible that happens in

that there’s a demand and a need.”
Another way in which the Bank brought together

that kind of model, where there’s a collaboration that

And LINC is finding support and cultivating

different stakeholders in 2019 was through the

might never have existed,” she said. “It is really a great

partnerships across Bank functions, including wider

Bank’s Economic Growth & Mobility Project (EGMP),

example of two organizations willing to take a risk

support in SRC, alongside efforts to make the program

which hosted events focusing on poverty, race and

and work together in an innovative way that might not

a permanent fixture at the Philadelphia Fed.

socioeconomic conditions, and economic inequality.

have otherwise happened without our engagement

EGMP’s focus was to get a wide range of organizations

and the engagement of Social Finance.”

“There’s a lot of desire within the Bank to support

to find connections to groups they might not have

the nonprofit community,” Lemelle said.

worked with before, with the most recent Research in

It’s the Philadelphia Fed’s reputation as a nonpartisan,

Action Labs having a goal of breaking down silos by

nonpolitical organization — one that can both create

advocating for a cross-sectoral effort.

partnerships directly and bring together people
and organizations around events and topics — that

Sydney Diavua says the LINC program is critical to
bringing banks and nonprofits together.

That approach is embodied in the workforce

helped foster the process that led to the pilot

development pilot program EGMP launched in the

private–public partnership.

fall of 2019, partnering Comcast, Philadelphia Works,
and Social Finance. Philadelphia Works is training

“Our convening ability allows us to bring together

75 people over three years to work in Comcast’s

people in innovative ways,” Putnam said. “One of the

business-to-business sales department. If those

strongest roles we can play at the Fed is that of a

workers stay employed for six months, Comcast will

connector; you can’t have uncommon partnerships

repay the cost of the training to Philadelphia Works.

when you don’t even know about that partner.”

RIVING DIALOGUES IN OUR DISTRICT
R eserve Banks provide an essential link between their own Districts and the
Board of Governors in Washington, D.C. The information that comes from all 12
Districts creates a clearer and more detailed picture of the national economy.
These regional insights help the Board set monetary policy. For the Philadelphia
Fed, being an essential link means connecting with people living in Delaware,
southern New Jersey, and eastern and central Pennsylvania.

During 2019, these conversations — conducted in large auditoriums and
conference rooms and around small diner tables — were central to engaging with
District residents. And make no mistake: These meetings were two-way exchanges
of information. “Outreach is about dialogues, not monologues,” said William G.
Spaniel, senior vice president and lending officer. “As the Philadelphia Fed, we can
provide data and information that can help people make business and economic
decisions. But we are there to listen, too. What we learn out in the District informs
our approach to what we do to safeguard the economy.”

On the next pages are a few highlights of our 2019 outreach in the District.
Each event exemplifies our goal of leading the conversation with economic
data, regulatory updates, and policy issues, while also listening to what our
constituents have to say.

The Bank’s conference on the Community Reinvestment Act examined ways to modernize the decades-old legislation.
The event was attended by (from left to right): Atlanta Fed President Raphael Bostic; Amanda Roberts, Senior
Community Affairs Analyst, Board of Governors; Theresa Singleton, Senior Vice President of the Bank’s Community
Development and Regional Outreach Department; and President Patrick Harker.

ON THE ROAD AGAIN:
TRAVELS IN OUR DISTRICT

The Pennsylvania Turnpike, I-80, I-81. President Patrick

“Outreach activities foster critical conversations

T. Harker and other Bank leaders hit most of the major

that deepen our understanding of local economies,

highways in Pennsylvania when they made a four-day,

provide a forum to share our resources and

550-mile trip to meet with community bankers and

expertise, and identify opportunities for future

local leaders across the Keystone State.

collaboration,” said Erin Mierzwa, strategic outreach

DISTRICT, DINERS & DIALOGUE

A diner in New Jersey may sound like an odd location
for a Fed leader to hold a meeting. But for Spaniel,

and engagement officer.

who oversees the Bank’s supervision and regulation

The first stop in Altoona, PA, began with a roundtable.

efforts, diners are the perfect place to catch up with

Community bankers joined Harker, First Vice President

local bankers.

James D. Narron, and Senior Vice President and
Lending Officer William G. Spaniel for an exchange of

Launched in 2018, District, Diners & Dialogue events

information on local economic conditions, banking

give Spaniel a chance to meet with local financial

trends, and the regulatory environment.

industry leaders over breakfast and coffee. The
informal setting encourages open discussions about

The next day brought a meeting in Altoona’s city

trends and challenges these leaders are seeing in

hall with local civic leaders and business executives.

their market areas.

A walking tour of the downtown area allowed Bank
leaders to see firsthand how cross-sector collaboration

Once again, the goal is to have a two-way exchange

among local leaders is driving the revitalization of

of information. For the bankers, it’s an opportunity

the city.

William G. Spaniel hosts District, Diners &

Williamsport, PA, was the second stop. There, Bank

Dialogue as a means to connect informally

senior leaders hosted a dinner where they listened

with local bankers.

to ask questions and learn about economic data or
regulatory updates that impact the financial services
landscape. For Spaniel and the Philadelphia Fed,
the breakfasts supplement the data on our region

to bankers discuss local business conditions.

collected through surveys and other methods.

In Scranton, PA, Fed Governor Lael Brainard joined

Spaniel has said that the encounters enhance

the group for another series of events to meet with

his perspectives on supervisory matters. “These

financial institutions and also learn about the

conversations are important,” said Spaniel. “We want

Bank’s first Research in Action Lab (which dealt with

to connect with banks in the region outside of the

equitable transit) from community partners. During

supervisory process to better understand what’s

a banker roundtable dinner, Governor Brainard

going on in the District and how it impacts financial

shared how she travels across the nation to hear

institutions in the region.”

firsthand about how people view the economy. As
the Fed considers strategies for faster payments and

The Bank held two events in 2019: one in Cherry

modernizing the Community Reinvestment Act, this

Hill, NJ, and one in Lancaster, PA. Because of the

engagement in local communities is important to

overwhelmingly positive response from financial

understanding on-the-ground conditions.

President Patrick Harker (left) tours Altoona, PA,

industry leaders, five events are planned for 2020.

with Mayor Matthew Pacifico (center), and the
Altoona-Blair County Development Corporation
President Stephen McKnight (right).

EN SU RIN G ACC ESS TO C R ED I T
IN U N DERSERV ED COMMU NI TI ES

Passed in 1977, the Community Reinvestment Act
(CRA) was designed to counteract discriminatory credit
practices. In particular, the practice of redlining
prevented borrowers, specifically communities of color,
from obtaining mortgages. The CRA attempts to remedy
this by requiring banks to lend and invest where they
have a physical presence.

“SUPPORT FOR CRA IS BROAD AND DEEP.
IN REFORM EFFORTS, WE MUST BALANCE
THE IMPORTANCE OF PLACE WITH NEW
BUSINESS MODELS.”

But with the growth of online banking, nonbank
fintech lenders entering the market, and shifts in

The following month, in partnership with the Board

needs for low- and moderate-income (LMI) consumers,

of Governors, the Philadelphia Fed hosted a research

financial institutions and the communities they serve

symposium to listen to various community development

have highlighted a need to modernize the CRA. As a

experts and financial industry leaders. Presenters

result, the Office of the Comptroller of the Currency

shared research and guided dialogue on the impact of

(OCC), the Federal Deposit Insurance Corporation (FDIC),

the CRA and the most critical areas of concern for CRA

Fed Vice Chair Richard Clarida meets with students during our Fed Listens event, which highlighted educational

and the Federal Reserve began a process to consider

modernization. Several speakers agreed that there could

opportunities through a tour of LEAP Academy in Camden, NJ.

changes to the legislation, which was last updated

be value in assessing the metrics used to evaluate CRA

in 1995.

lending in LMI communities, especially as it can impact —
and potentially accelerate — neighborhood change.

In 2019, the Federal Reserve System began to gather

Lei Ding, senior economic advisor in our Community

public input regarding the CRA. To that end, the

Development and Regional Outreach Department, shared

Philadelphia Fed engaged stakeholders in a variety

his research that found banks under CRA supervision

of roundtables and one-on-one meetings to hear

do direct more lending to LMI communities.

their insights on the future of the CRA as well as to
share research findings on the effectiveness of the

Philadelphia Fed President Harker, Fed Governor

regulation. In January, the Bank hosted two roundtables

Lael Brainard, and Atlanta Fed President Raphael

with bankers and community members to solicit

Bostic all spoke at this important conference. Governor

their feedback on updating the CRA. These findings

Brainard said that in attending the listening sessions

were consolidated with those from 27 other similar

and receiving comment letters from the public, she

roundtables held around the country into a Fed report,

learned that “support for CRA is broad and deep.

Perspectives from Main Street: Stakeholder Feedback

In reform efforts, we must balance the importance

on Modernizing the Community Reinvestment Act.

of place with new business models.”
In December, the OCC announced a Notice of
Proposed Rulemaking on Revisions to the Community
Reinvestment Act Regulations. Our Bank continues
to connect with financial institutions and key voices
on this issue to better understand the impacts of
these changes on communities.

T H E F E D LI ST E NS I N O UR D I ST R I CT

The afternoon event gathered local leaders to discuss
their perceptions of the economy, Fed policy, and the
Fed’s dual mandate of maximum employment and price

At the end of 2018, the Federal Reserve announced a
program to review how it conducts and communicates
monetary policy to the general public. Dubbed Fed
Listens, the initiative comprised events at Reserve Banks
around the country. Fed Vice Chair Richard H. Clarida,
who spearheaded the effort, visited Philadelphia to help
us host our own event on May 17.
The day started with a tour highlighting workforce
development in the nearby majority-minority city of
Camden, NJ. Vice Chair Clarida, President Harker, and
other leaders visited LEAP (Leadership, Education, and
Partnership) Academy University Charter School. The
innovative charter school helps prepare young people
for the economy of the future.

stability. To cover a wide range of viewpoints, one panel
included representatives from business and academia,
and another consisted of leaders from the philanthropic
and nonprofit sectors.
One consensus takeaway was that the Fed’s main tool,
interest rates, is a blunt tool. It can’t be used to target
communities or demographic groups that struggle
despite 10 years of nationwide economic growth. Most
panelists also agreed that the Fed should do more to
help people become financially literate.
The Philadelphia Fed is proud that our event, another
example of our engagement strategy, contributed to this
effort as the Fed strengthens its mission of ensuring
economic stability and thriving communities.

Seated, from left:
Patricia A. Hasson,
Phoebe A. Haddon,
Madeline Bell.
Standing, from left:
Timothy Snyder,

COMMUNITY DEPOSITORY INSTITUTIONS ADVISORY COUNCIL
The Community Depository Institutions Advisory Council, created in 2011, includes representatives from commercial
banks, thrift institutions, and credit unions. The council provides information, advice, and recommendations to the
Federal Reserve Bank of Philadelphia from the perspective of community depository institutions.

William S. Aichele,
Julia H. Klein, Jon
Evans, Brian McNeill,
Anthony Ibargüen

Joseph B. Bower Jr.

Thomas R. Quinn Jr.

President and CEO

CNB Bank and CNB Financial

Orrstown Bank

Corporation

Shippensburg, PA

Clearfield, PA

Eric Hoerner

Patrick L. Ryan

Chief Executive Officer

President and CEO

MidCoast Community

First Bank

Bancorp, Inc.

Hamilton, NJ

Wilmington, DE

BOARD OF DIRECTORS
As provided by the Federal Reserve Act, each of the 12 Reserve Banks is supervised by a nine-member board of directors.
The directors oversee the Bank’s direction and performance, and they participate in the formulation of the Fed’s monetary
policy through their reports on economic and financial conditions and their decisions on the Bank’s discount rate.

Brian W. Jones

J. Bradley Scovill

President/CEO and Director

President and CEO

The First National Bank

C&N Bank

of Elmer

Wellsboro, PA

Elmer, NJ

CHAIR

BOARD MEMBERS

Brian McNeill (a, c, d)

William S. Aichele (a, c)

Anthony Ibargüen (a, c)

Christopher D. Maher

Amey R. Sgrignoli

President and CEO

Chairman

President and CEO

Touchpoint, Inc.

Univest Corporation of Pennsylvania

AquaVenture Holdings, Ltd

OceanFirst Bank

Belco Community Credit Union

Concordville, PA

Souderton, PA

Tampa, FL

Toms River, NJ

Harrisburg, PA

Quench USA, Inc.
DEPUTY CHAIR

Madeline Bell (a, c)

King of Prussia, PA

President and CEO
Phoebe A. Haddon (a, b, d)

The Children’s Hospital of Philadelphia

Julia H. Klein (a, b)

Chancellor

Philadelphia

Chairwoman and CEO

Jeff March

Jeane M. Vidoni

C.H. Briggs Company, Inc.

President and CEO

Reading, PA

Citadel Federal Credit Union

Penn Community Bank

Exton, PA

Perkasie, PA

President and Executive Director

Gary S. Olson

James Wang

Clarifi

President and CEO

Philadelphia

ESSA Bank & Trust

Asian Bank

Stroudsburg, PA

Philadelphia

Rutgers University–Camden
Camden, NJ

Jon Evans (a, b, d)
President and CEO
Atlantic Community Bankers Bank

Timothy Snyder (a, b)

Camp Hill, PA

President and CEO
Fleetwood Bank

Patricia A. Hasson (a, c, d)

Fleetwood, PA

(a) Member of the Bank’s Executive Committee; (b) Member of the Bank’s Audit Committee; (c) Member of the Bank’s Management and
Budget Committee; (d) Member of the Bank’s Nominating and Governance Committee

ECONOMIC AND COMMUNITY ADVISORY COUNCIL

MANAGEMENT COMMITTEE

The Economic Advisory Council, created in 2008, was expanded and renamed the Economic and Community Advisory

The Management Committee is composed of the

Council in 2016. It is now composed of up to 15 leaders who represent businesses of different sizes and industry

Bank’s president and CEO, the first vice president and

sectors as well as nonprofit and philanthropic organizations, academic institutions, the public sector, and organized

COO, the chief of staff, the executive vice president,

labor. The council advises Federal Reserve officials on emerging trends, market conditions, and economic growth

and select senior vice presidents. Members advise the

opportunities in the Third District and the nation.

president and first vice president on matters of
Bank policy and strategy.

Rochelle L. Cameron

Angelique X. Irvin

Donald F. Schwarz

Patrick T. Harker

Arun K. Jain

Chief Executive Officer

Chairman and CEO

Senior Vice President, Program

President and

Senior Vice President,

Philadelphia International

Clear Align

Robert Wood Johnson

Chief Executive Officer

Financial Services

Airport

Eagleville, PA

Foundation
Princeton, NJ

Philadelphia

and Facilities Management
James D. Narron
First Vice President and

Michelle McClarren

Chief Operating Officer

Liaison to the Committee
Senior Vice President

Edward L. Dandridge

Sharmain Matlock-Turner

Steve Somers

Michael Dotsey

Global Chief Marketing and

President and CEO

President and Owner

Executive Vice President,

Communications Officer

Urban Affairs Coalition

Vigon International

Director of Research,

Jeanne R. Rentezelas

AIG General Insurance

Philadelphia

East Stroudsburg, PA

and Director of the Consumer

Senior Vice President

Finance Institute

and General Counsel, Legal

Donna L. Franco

William G. Spaniel

Senior Vice President and

Chief Financial Officer

Lending Officer, Supervision,

New York

and General Auditor, Audit

Susan Hakkarainen

Janice E. Nevin

Linda Thomson

Cochair and Co-CEO

President and CEO

Lutron Electronics Co., Inc.

ChristianaCare Health System

JARI

Terry E. Harris

Coopersburg, PA

Wilmington, DE

Johnstown, PA

Senior Vice President and

Patricia Wilson

Chief Information Officer,

Senior Vice President, Chief of

Information Technology

Staff, and Corporate Secretary

Regulation, and Credit

Services
Ali A. Houshmand

Michael A. Nutter

Deborah L. Hayes

President

Principal Advisor

Senior Vice President,

Rowan University

Michael A. Nutter Advisors LLC

Corporate Affairs

Glassboro, NJ

Former Mayor of
the City of Philadelphia

Mary Ann Hood

Philadelphia

Senior Vice President and EEO
Officer, Human Resources,
and Director, Office of Diversity
and Inclusion, and Law Enforcement

ADDITIONAL BANK OFFICERS
SENIOR VICE PRESIDENTS

VICE PRESIDENTS

Larry Cordell
Senior Vice President
Supervision, Regulation, and Credit

Roc Armenter
Vice President and Economist
Research

F. Deming Love
Vice President
Digital Strategy Group

Joanne M. Branigan
Assistant Vice President
Supervision, Regulation, and Credit

Christopher L. Ivanoski
Assistant Vice President
Facilities

Xudong An
Officer
Supervision, Regulation, and Credit

Robert Hunt
Senior Vice President and
Associate Director
Consumer Finance Institute

Mitchell S. Berlin
Vice President and Economist
Research

Robert F. Mucerino
Vice President
Collateral Management and
Administrative Services

Brian W. Calderwood
Assistant Vice President
End User Services

Anjanette Kichline
Assistant Vice President
Supervision, Regulation, and Credit

Jonathan S. Brown
Officer
Supervision, Regulation, and Credit

Maryann T. Connelly
Assistant Vice President and Counsel
Legal

Andrew A. Kish
Assistant Vice President
Supervision, Regulation, and Credit

Kimberly Caruso
Officer
Supervision, Regulation, and Credit

Michael T. Costello
Assistant Vice President
Supervision, Regulation, and Credit

James K. Lofton
Assistant Vice President
Cash Services

Kenneth Chin
Officer
Cash Services

Daniel W. Crouthamel
Assistant Vice President
Research

Lorraine A. Lopez
Assistant Vice President
Supervision, Regulation, and Credit

James W. Corkery Jr.
Officer
Supervision, Regulation, and Credit

Heather C. Derbyshire
Assistant Vice President
Financial Statistics

Michael P. O’Brien
Assistant Vice President
Law Enforcement

Frank J. Doto
Assistant Vice President
Human Resources

Chellappan Ramasamy
Assistant Vice President
Supervision, Regulation, and Credit

Dusty Downs
Officer
Collateral Management and
Administrative Services

Matthew R. Frame
Assistant Vice President
Supervision, Regulation, and Credit

Joshua N. Silverstein
Assistant Vice President and Contracts
Counsel
Legal

Keith Sill
Senior Vice President, Associate Director
of Research, and Director of the Real-Time
Data Research Center
Research
Theresa Y. Singleton
Senior Vice President and Community
Affairs Officer
Community Development and
Regional Outreach

Donna L. Brenner
Vice President
Enterprise Risk Management
Paul S. Calem
Vice President
Supervision, Regulation, and Credit
Paul P. Capelli
Vice President
Public Affairs
Jennifer E. Cardy
Vice President
Financial Management Services
Satyajit Chatterjee
Vice President and Economist
Research
Julia Cheney
Vice President and Assistant Director
Consumer Finance Institute
Kori A. Connelly
Vice President and Deputy
General Counsel
Legal
Joseph O. Dietzmann
Vice President and Collaboration
Services Executive
End User Services
Gregory Fanelli
Vice President
Information Technology Services
Stephen G. Hart
Vice President
Human Resources

OFFICERS

ASSISTANT VICE PRESIDENTS

Robin P. Myers
Vice President
Supervision, Regulation, and Credit
Gregory A. Ramick
Vice President
Cash Services
Robert T. Ross Jr.
Vice President
Enterprise Risk Management
Perry Santacecilia
Vice President
Supervision, Regulation, and Credit
Stanley J. Sienkiewicz
Vice President
Research
Kimberly J. Taylor
Vice President
Human Resources
Patrick F. Turner
Vice President
End User Services
Linda Van Valkenburg
Vice President
Information Technology Services
James K. Welch
Vice President
Law Enforcement and Facilities
William T. Wisser
Vice President
Supervision, Regulation, and Credit

Suzanne W. Furr
Assistant Vice President and Assistant
General Auditor
Audit
Donna Gallo
Assistant Vice President and Assistant
General Auditor
Audit
Amber Germain
Assistant Vice President
Enterprise Risk Management
Christopher C. Henderson
Assistant Vice President
Supervision, Regulation, and Credit

Charles Kirkland Jr.
Vice President
Financial Statistics

Jill Hettinger
Assistant Vice President
Supervision, Regulation, and Credit

Jeffrey Lin
Vice President and Economist
Research

Douglas J. Hovern
Assistant Vice President
Facilities

Jeffrey Fries
Officer
End User Services
Andrew Hill
Officer
Corporate Affairs

Marion W. Sindoni
Assistant Vice President
Public Affairs

Yilin Huang
Officer
Supervision, Regulation, and Credit

Stephen J. Smith
Assistant Vice President and Counsel
Legal

Daniel R. Kutschera
Officer
Supervision, Regulation, and Credit

Eric A. Sonnheim
Assistant Vice President
Supervision, Regulation, and Credit

Erin K. Mierzwa
Officer
Community Development and
Regional Outreach

Gail L. Todd
Assistant Vice President and Credit Officer
Supervision, Regulation, and Credit

Rebecca C. Robinson
Officer and Assistant Director, Office of
Minority and Women Inclusion
Office of Diversity and Inclusion
Thomas Stark
Officer and Assistant Director, Real-Time
Data Research Center
Research

Nancy R. Hunter
Assistant Vice President and Information
Security Officer
Information Technology Services

FINANCIAL STATEMENTS
The audited annual financial statements of the Federal
Reserve Bank of Philadelphia as of and for the years
ended December 31, 2019, and December 31, 2018, are
incorporated here by reference. They are available at
the Board of Governors of the Federal Reserve System
at https://www.federalreserve.gov/aboutthefed/files/
philadelphiafinstmt2019.pdf. That public disclosure also
provides: Notes to Financial Statements, Management’s
Report on Internal Control over Financial Reporting,

The Board of Governors’ Statement of Auditor

and the Independent Auditors’ Report.

Independence is provided below:

STATEMENT OF AUDITOR INDEPENDENCE
The Federal Reserve Board engaged KPMG to audit the
2019 combined and individual financial statements of
the Reserve Banks.1
In 2019, KPMG also conducted audits of internal controls
over financial reporting for each of the Reserve Banks.
Fees for KPMG services totaled $7.2 million. To ensure
auditor independence, the Board of Governors requires
that KPMG be independent in all matters relating to the
audits. Specifically, KPMG may not perform services for
the Reserve Banks or affiliates that would place it in a
position of auditing its own work, making management
decisions on behalf of the Reserve Banks, or in any
other way impairing its audit independence. In 2019, the
Bank did not engage KPMG for any non-audit services.

In addition, KPMG audited the Office of Employee Benefits of the Federal Reserve System (OEB), the Retirement Plan for Employees of

the Federal Reserve System (System Plan), and the Thrift Plan for Employees of the Federal Reserve System (Thrift Plan). The System
Plan and the Thrift Plan provide retirement benefits to employees of the Board, the Federal Reserve Banks, the OEB, and the Consumer
Financial Protection Bureau.

Full text of Annual Report of the Federal Reserve Bank of Philadelphia : Leading & Listening : Annual Report 2019

FRASER