View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Closing the Digital Divide
A Framework for Meeting CRA Obligations

Federal Reserve
Bank of Dallas
Community Development

The purpose of this publication is to provide financial institutions:
PART ONE:

An understanding of how broadband is now an integral part
of community development and meets the "primary
purpose" definition of the Community Reinvestment Act (CRA).

PART TWO:

A road map of best practices for closing the digital divide.

PART THREE:

A selection of references and examples to help identify
opportunities to close the digital divide in their communities.

PART FOUR:

A list of tips for preparing their case for digital opportunity investments and CRA reference guides to help ensure planned CRA activities
meet regulatory requirements.

PART FIVE:

A template to make their case, which highlights the types of lending,
service and investments that are valuable to their institution and
target communities.

PART SIX:

Appendixes of broadband resources for understanding the
needs and opportunities in their assessment areas.

"This publication provides a toolkit for bankers seeking to bring digital opportunity to
underserved, rural and tribal communities through access to high-speed broadband. Bank
investments as well as partnerships with local governments, nonprofits and educational
groups can help ensure equitable access to the growing digital economy."
Robert S. Kaplan
President and CEO,
Federal Reserve Bank of Dallas

Closing the Digital Divide

A Framework for Meeting CRA Obligations

July 2016

Revised December 2016

Federal Reserve Bank of Dallas

Jordana Barton, MPA
Federal Reserve Bank of Dallas, San Antonio Branch

Furthermore, as the digital economy grows, digital
inclusion represents economic inclusion. Yet broadband
access and adoption continue to lag behind for certain
population segments, including low-income and rural
communities. This is referred to as the digital divide—i.e.,
the gap between people who have access to broadband
services and know how to use the internet and those who
do not have such access or knowledge.1 The digital divide
leads to further economic, social and political disparities for
low-income and underserved populations.

rr Introduction

In recent decades, broadband has transformed our personal lives, how we do business and the economy at large.
Access to broadband has become essential to make progress in all areas of community development—education and
workforce development, health, housing, small-business
development and access to financial services.
table

1

U.S. Cities with 100,000+ Households Ranked by 'Worst Connection':
Median Household Incomes vs. Percent of Households With No Internet Access
City

Median
household
income

Percent of
households
with no
internet access

City

Median
household
income

Percent of
households
with no
internet access

City

Median
household
income

Percent of
households
with no
internet access

1

Detroit

$24,820

39.9

25 Omaha

$47,512

22.9

19.9

Miami

$31,070

36.8

26 Albuquerque

49 Boston

$53,583

2

$48,357

22.9

$51,089

19.2

3

Cleveland

$26,096

36.1

27 Pittsburgh

50 Denver

$42,004

22.7

$51,400

18.9

4

New Orleans

$36,631

33.8

28 Tampa

51 Arlington

$42,649

22.4

$49,469

18.6

5

Buffalo

$32,392

32.6

29 Fort Wayne

52 St. Paul

$39,878

22.2

$52,116

18.6

6

Memphis

$36,722

32.3

30 St. Petersburg

53 Long Beach

$43,894

22.2

$41,345

18.1

7

St. Louis

$34,488

31.9

31 Corpus Christi

54 Orlando

$49,686

22.1

$51,034

18.0

8

Milwaukee

$35,186

31.2

32 Tucson

55 Charlotte

$35,720

22.0

$50,563

18.0

9

Baltimore

$42,266

30.4

33 New York

56 Minneapolis

$52,223

21.9

$47,535

17.6

10 Cincinnati

$34,605

30.3

34 Mesa

57 Lexington-Fayette

$47,561

21.8

$49,419

16.7

11 Toledo

$31,907

29.8

35 Greensboro

58 Lincoln

$41,150

21.8

$49,142

15.6

12 Philadelphia

$36,836

29.8

36 Fort Worth

59 Aurora

$52,430

21.8

$77,485

14.9

13 El Paso

60 San Francisco

$41,129

28.7

$48,466

21.7

61 Austin

$56,351

14.9

14 Dallas

37 Los Angeles

$41,978

28.5

$46,803

21.5

62 Portland

$55,571

14.8

15 Fresno

38 Nashville-Davidson

$40,179

27.0

$46,232

21.4

63 Raleigh

$55,170

14.4

16 Wichita

39 Oklahoma City

$43,538

26.6

$47,424

21.1

64

Henderson

$60,819

13.5

17 Tulsa

40

Jacksonville

$41,495

26.2

$48,034

21.1

65

Colorado Springs

$53,550

13.2

18 Indianapolis

41

Sacramento

$41,361

26.0

$49,289

20.9

66 Madison

$49,546

12.9

19 San Antonio

42 Las Vegas

$45,399

25.3

$46,485

20.8

67 Anchorage

$79,045

12.8

20 Chicago

43 Atlanta

$47,099

24.9

$61,559

20.8

68 Seattle

$70,172

12.2

21 Houston

44 Urban Honolulu CDP

$45,353

24.9

$54,763

20.8

69 San Diego

$63,456

12.0

22 Kansas City

45 Bakersfield

$45,551

24.4

$54,394

20.2

70 San Jose

$80,977

11.6

23 Phoenix

46 Oakland

$46,601

24.1

$44,426

20.0

71 Virginia Beach

$62,855

10.5

24

47 Columbus

$44,893

24.0

48 Washington, D.C.

$67,572

20.0

72 Plano

$80,448

7.7

Louisville/Jefferson
County

SOURCE: Census Bureau, 2013 American Consumer Survey.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

1

Federal Reserve Bank of Dallas

Lack of broadband access disproportionately affects
low- and moderate-income (LMI) communities. Households in the U.S. making $25,000 or less have a broadband
adoption rate of 47 percent, while those making more than
$100,000 have an adoption rate of 92 percent.2 Table 1
compares median household income and the percentage
of households with internet access in the 72 U.S. cities with
100,000 households or more, and ranks them by internet
connectivity. The corresponding Chart 1 illustrates a clear
correlation between household income and internet access
at home.
chart

1

chart

2

Internet Adoption in the U.S. by County, 2013

U.S. Cities with 100,000+ Households Ranked
by 'Worst Connection'

Percentage of households with no internet access
45
40

Detroit

35

El Paso

30

SOURCE: Census Bureau, 2013 American Consumer Survey.

The Federal Communications Commission (FCC)
defines broadband as a download speed of 25 Mbps (megabits per second) and an upload speed of 3 Mbps. However,
communities should be aware that some applications of
broadband require connection speeds that exceed the FCC
definition. Indeed, many experts in the broadband field seek
to help communities develop next generation (i.e., gigabit)
fiber optic capacity to support current and future needs.
The CRA provides a significant opportunity to help
close the digital divide across communities while simultaneously benefiting financial institutions and improving
economic stability. The CRA is a law that encourages banks
to make loans and investments and provide services to LMI
communities. The law was passed in 1977 to address redlining—the denial of credit to individuals based on where they
live. Every year, the CRA helps bring more than $100 billion
in capital to LMI communities across the country. The law
is intended to be broad, flexible and responsive to changes
within communities.

25
Washington, D.C.

20
15

San Jose

10
5
0

$0

$10,000

$20,000

$30,000

$40,000 $50,000 $60,000
Median household income

$70,000

$80,000

$90,000

SOURCE: Census Bureau, 2013 American Consumer Survey.

The map in Chart 2 illustrates internet adoption in the
United States by county. As noted by the Census Bureau,
the map suggests that both income and geography help
explain the digital divide.³ Although the county-level data
offers a view of the big picture, even within counties with
high levels of broadband adoption, there are often LMI
neighborhoods that do not have access. Financial institutions and nonprofit community development organizations
can use the U.S. Department of Commerce National
Telecommunications and Information Administration’s
(NTIA’s) National Broadband Maps: How Connected Is
My Community? mapping tools to zoom in to the city and
neighborhood level.⁴
While these mapping tools can be used as general
guides, they are not diagnostic tools. When the mapping
tools are used in relation to a particular project, it is critical
to understand whether the local broadband network can
deliver the necessary connectivity speed for the intended
goals of a community.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

2

Federal Reserve Bank of Dallas

Understanding Broadband,
Community Development and CRA

Progress Report, 34 million Americans lack access to fixed
broadband at speeds of at least 25 Mbps for downloads
and 3 Mbps for uploads.⁶ When addressing the nature of a
community's digital divide, the "three legs of the stool" of
broadband adoption should always be considered:

PART ONE
"Like electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire
new industries and unlocking vast new possibilities for
existing ones. It is changing how we educate children,
deliver health care, manage energy, ensure public
safety, engage government, and access, organize and
disseminate knowledge."⁵
	

1. Broadband access
2. Computer access
3. Training and technical assistance
However, the three legs of the stool are not equal.
As illustrated in Diagram 1, in communities with limited
broadband infrastructure or no broadband infrastructure,
investment in computer access or skills training will not be
effective until investment in broadband infrastructure is
developed. This is because owning a computer and knowing
how to use it effectively are not relevant unless there is a
sufficient connection to the internet.
For types of broadband infrastructure expansion and
deployment strategies, see Appendix A.

— Federal Communications Commission (FCC)

rr Infrastructure

Under the CRA, infrastructure investment includes
facilitating the construction, expansion, improvement,
maintenance or operation of essential infrastructure or
facilities for health services, education, public safety, public
services, industrial parks or affordable housing. An investment or loan applied to broadband infrastructure would
need to be for the purpose of serving LMI individuals and/or
geographies or revitalizing or stabilizing an LMI geography
or nonmetro middle-income geography.
Broadband is now a basic infrastructure needed in all
communities. Yet according to the FCC’s 2016 Broadband
diagram

1

rr Workforce

Development

Workforce development, a key area of community
development under the CRA, is a valuable tool for lifting
people out of poverty and for creating upward mobility.

Broadband Infrastructure: The Prerequisite for Closing the Digital Divide

Broadband Infrastructure: The Prerequisite for Closing the Digital Divide
in Lowand Moderate-income Communities
in Low- and Moderate-Income
Communities

Limited broadband
infrastructure

No broadband
infrastructure

Affordability
Infrastructure
Expand
broadband
connectivity

Computer access programs

Infrastructure

Training

Deploy new
broadband
network

Digital inclusion programs
SOURCE: Federal Reserve Bank of Dallas.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

3

Federal Reserve Bank of Dallas

Workforce opportunities are hindered when LMI communities lack broadband access. Today, 60–70 percent of jobs
are posted online. More than 80 percent of jobs for those
with bachelor degrees or better are posted online.⁷ According to the Pew Research Center, “37 percent of nonbroadband adopters indicate that it would not be easy for them
to create a professional resume if they need to do so; 30
percent would find it difficult to contact an employer via
email, or fill out an online job application; and 27 percent
would have a hard time finding online lists of available jobs
in their area.”⁸ Additionally, many job training programs are
only offered online. For individuals who live in areas without
workforce development centers or community colleges, or
who lack transportation or experience barriers due to long
distances, internet access could help them participate in
training and certification programs.

Nearly 8 in 10 middle-skill jobs in today’s workforce
require digital skills, representing 32 percent of all labor
market demand in the nation. Digitally intensive middle-skills jobs have grown more than twice as fast as other
middle-skill jobs in the past decade, and pay wages, on
average, 18 percent higher than middle-skills jobs without
a digital component.”⁹ Indeed, middle-skill jobs that are
not digital-intensive have had the slowest growth of any
category, behind even low-skilled positions—1.9 percent for
nondigital middle-skill jobs between 2004 and 2013 compared with 2.9 percent for low-skilled jobs. These positions,
which are primarily in transportation, construction and
installation/repair, lag in pay, growth and opportunity.¹⁰
Capital One and Grovo developed the Future Edge
training program for nonprofits to prepare workers for
middle-skill and high-skill jobs that require digital literacy.
The program educates participants on 10 basic digital
competencies, including Microsoft Office Suite, computer
fundamentals and online communication and etiquette.¹¹
The program recognizes that after achieving broadband
access, the first step on the pathway to full participation in
the digital economy is digital literacy. Diagram 2 shows the
relationship between digital inclusion training programs,
such as Future Edge, and the internet economy.

Digital Skills Gap. Computer and internet skills are
critical in today’s job market. As the nation recovers from
the Great Recession, growth for digital-intensive middle-skill
jobs has been equivalent to the growth of high-skilled positions over the same period (4.8 percent for digital middle
skills and 4.7 percent for high-skill positions from 2010–13).
“Middle-skill jobs are those with less than 80 percent of
postings calling for a bachelor’s degree and with a median
hourly wage above the national living wage of $15.
diagram

2

Relationship Between Digital Literacy Training and the Internet Economy
Broadband access

Digital literacy

Financial literacy

Ability to participate in internet economy

Participation in internet economy as consumers

Participation in internet economy though online personal finance

Computer technical
skills training

Participation in internet economy as a skilled worker

Computer
programming

Participation in internet economy as an entrepreneur

SOURCE: Federal Reserve Bank of Dallas.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

4

Federal Reserve Bank of Dallas

table

2

Households with School-Age Children that Do Not Have Broadband Access

Percent lacking a high-speed connection at home

All

White

Black

Hispanic

Asian

Annual income under $50,000

31.4

24.6

$50,000+

8.4

6.7

38.6

37.4

15.5

13.0

12.8

4.0

All households with school children

82.5

88.0

Annual income under $25,000

60.3

67.9

71.5

72.2

92.3

53.6

54.8

79.0

$25,000–$49,999

75.7

80.6

$50,000–$99,999

88.2

90.5

71.2

69.2

88.8

84.1

82.1

$100,000–$149,999

94.3

94.0

95.1

91.7

90.6

96.5

$150,000+

96.7

97.0

93.5

93.9

97.9

Percent with a high-speed connection at home

SOURCE: Pew Research Center Analysis of 2013 American Community Survey.

Education and the Homework Gap. Access and skill
in using the internet effectively have become essential for
educational and economic opportunity. It is reported by
the Census Bureau that education and broadband adoption
are positively related, meaning that households with less
educational attainment have lower rates of broadband
adoption. Only 43 percent of individuals without a high
school diploma use the internet, compared with 90 percent for those with a college degree.12 Thus, to provide a
curriculum that is relevant and prepares students for the
job market, teachers are increasingly assigning homework
that requires internet access. Low-income students are
at distinct a disadvantage. It is common to hear stories of
students doing their homework in fast-food restaurants or
outside of school buildings after hours to access free Wi-Fi
hot spots.13
Eighty-four percent of the nation’s K–12 teachers
report the digital divide is growing in their classrooms
due to unequal access to essential learning technology
resources at home. As shown in Table 2, “roughly one-third
(31.4 percent) of households whose incomes fall below
$50,000 and with children ages 6 to 17 do not have a highspeed internet connection at home. This low-income group
makes up about 40 percent of all families with school-age
children in the United States. … By comparison, only 8.4
percent of households with annual incomes over $50,000
lack a broadband internet connection at home. In other
words, low-income homes with children are four times
more likely to be without broadband than their middle or
upper-income counterparts.” This is referred to as the
“homework gap.”14

Closing the Digital Divide

A Framework for Meeting CRA Obligations

rr Access

to Financial Services

The provision of retail banking services in LMI communities is fundamental to the CRA service test. Having
a relationship with a bank is an essential tool for building
wealth and assets. In a study of low-income residents in
south Dallas, the Dallas Fed reports, “… Owning a checking
account is positively related to owning a savings account,
having a mortgage and cashing paychecks through direct
deposit or at a bank. When other factors are held constant,
individuals with a checking account are 4.6 times as likely
to have a savings account and 2.3 times as likely to have a
mortgage or cash their paychecks through direct deposit or
at a bank.”15 The digital divide can be a barrier to improving
the number of people with full access to banking. And, the
reverse is also true: Closing the digital divide can open up
opportunities for LMI individuals to gain access to safe
financial services and products, especially due to the rate at
which technology is transforming banking and how people
access services.
More and more services are now available without
making a trip to a branch. A few examples include:

5

•

Online (internet) banking—accessing a bank
account via a laptop, desktop or tablet

•

Mobile banking—using a smartphone to access a
bank account

•

Remote deposit capture­—scanning checks on a
bank's mobile phone app and sending them to the
bank electronically for deposit

Federal Reserve Bank of Dallas

Additionally, banks recognize the necessity of having
an online presence. According to the Pew Research Center,
61 percent of total internet users bank online. Thirty-five
percent of cell phone users said they had used their phone
to check their bank account or perform transactions, up
from 18 percent in 2011.16 The Federal Deposit Insurance
Corp. (FDIC) notes the following trends:
•

Total number and density of banking offices
declined during the post-2008 Great Recession
period.

•

Total office closures exceeded openings since 2010.

•

The impact of technology on transactions is
strongest amongst younger consumers, i.e., weekly
branch usage was 38 percent lower among consumers aged 18-29 than among consumers aged
30-39.

•

Branch transactions have declined. From 1993 to
2013, teller transactions per office declined by 45
percent, and from 2003 to 2012, paper checks
fell from 43 percent of non-cash payments to 15
percent.17

Additionally, the ever-growing number of apps and innovations in the financial technology industry, or “fintech,”
represent a recognition of the vast market opportunity in
all income categories, especially with the millennial generation. The top fintech startup companies include, Betterment, WePay, Affirm and CommonBond.20
It is important to note that for some types of transactions, mobile or online are the most efficient choice for
banks and for people who have access. However, establishing a personal relationship with a bank can be more effective in applying for a loan or receiving financial guidance,
i.e., a personal relationship and knowledge of an individual’s
character, one of the “Five C’s of Credit” can be more accurate than an algorithm alone.21 The 2015 FDIC study shows
that lower-income people use in-person banking more than
those with higher incomes.22 And, a Gallup study confirms
that certain services—such as applying for loans—are much
more likely to happen at brick-and-mortar locations than
through mobile access.23 In “U.S. Smartphone Use in 2015,”
Pew finds that low-income Americans are more dependent
on smartphones for internet access than higher income
Americans because they lack other broadband service at
home or have limited options for getting online other than
a cell phone. Simultaneously, the study found that low-income Americans are more susceptible to lapses in their
internet service due to nonpayment or limited data plans.24
Moreover, in light of the digital divide, the need for
online access does not supplant the need for brick-andmortar presence in LMI communities. Similar to the current
national discussions on striking the most appropriate balance between in-person medical care and telemedicine, a
balance between online and face-to-face banking is optimal
to provide LMI communities the range of opportunities that
will best serve them and our nation’s financial institutions.
Under the CRA service test, banks will need to demonstrate
that their alternative delivery methods for providing retail
banking are successfully serving LMI people in their assessment area.

Based on the trends provided by the FDIC and a recent
study by the Federal Reserve System on consumers and
mobile financial services, there is a significant shift toward
mobile and online banking. According to the Federal
Reserve report, “the three most common mobile banking
activities among mobile banking users were checking
account balances or recent transactions (94 percent),
transferring money between an individual’s own accounts
(58 percent) and receiving an alert (e.g., a text message,
push notification or e-mail) from their bank (56 percent).”
Furthermore, “43 percent of adults with mobile phones and
bank accounts reported using mobile banking, an increase
of 4 percentage points from the prior year’s survey.”18
In May 2016, the FDIC released a mobile banking report
which found, “while not a cure-all, mobile financial services
can help banks address many of the core financial service
needs of underserved consumers, especially in areas where
traditional banking channels may be perceived to be less
successful.”19

Closing the Digital Divide

A Framework for Meeting CRA Obligations

6

Federal Reserve Bank of Dallas

rr Small-Business

ship in the internet economy is to promote the expansion
of broadband networks. Consider that before the advent of
the internet, telecommunications and information technology innovations happened at the center of the network and
were created by the engineers working in the industry. The
internet, however, makes unbounded innovation possible
on the periphery of the network, i.e., with a person and
a computer.29 Closing the digital divide for budding and
established entrepreneurs makes it possible for them to
have access to the internet for realizing their innovative
business ideas.
The internet is a valuable tool that makes basic business
processes, such as payroll and payments, more efficient.
Furthermore, entrepreneurs are able to capture an audience and customers, sell a product and promote and
conduct their businesses in a cost-effective and accessible
way. It opens up the global marketplace to companies
and facilitates potential partners or allies within the same
industry. This “partnering” of companies within the same
industry is clearly the trend in fintech. As fintech startup
companies have proliferated with mobile apps for payments, investing, lending and more, the discussion has
centered on the “disruptive” nature of the companies to the
traditional banking industry.
The success of the new companies in reaching more
people more efficiently and effectively can be seen as a
threat. However, the recent trend has been for banks to
partner with the fintech companies, such as the partnership
between marketplace lender OnDeck with JPMorgan Chase
& Co.30 Furthermore, the implication for rural communities
is significant since access to high-speed broadband can help
businesses thrive and no longer be dependent on physical
proximity to a broad customer base. Having broadband
infrastructure has the potential to make geography irrelevant for some types of businesses.

Development

"Uber, the world's largest taxi company, owns no
vehicles. Facebook, the world's most popular media
owner, creates no content. Alibaba, the most valuable
retailer, has no inventory. And Airbnb, the world's
largest accommodation provider, owns no real estate.
Something interesting is happening."25
			

— Tom Goodwin, Havas Media

One of the goals of the CRA is to promote economic
development through small-business development, which
broadband access profoundly impacts. Communities with
high-speed broadband infrastructure provide an environment that promotes small-business development. A 2014
study notes that “communities where gigabit broadband
was widely available enjoyed higher gross domestic product (GDP), relative to similar communities where gigabit
broadband was not widely available.” The 14 communities
in the study “enjoyed over $1 billion in additional GDP when
gigabit broadband became widely available.” The study
refers to the Chattanooga, Tennessee, municipal-owned
gigabit broadband service that has created “1,000 new jobs,
increased investments and a new population of computer
programmers, entrepreneurs and investors.”26
A recent study by the Boston Consulting Group finds
that the impact of the internet on GDP in the U.S. is 4.7
percent, i.e., the internet accounted for $684 billion, or
4.7 percent of all U.S. economic activity in 2010. The study
further reports that “the internet economy in the developed markets of the G-20 will grow at an annual rate of 8
percent over the next five years, far outpacing just about
every traditional economic sector, producing wealth and
jobs.”27 Membership in the G-20 includes 20 of the world’s
largest advanced and emerging economies “representing
about two-thirds of the world’s population, 85 percent
of global gross domestic product and over 75 percent of
global trade.”28
With some knowledge of coding and a great idea to
meet a human need, Google and Facebook were created—a
testament to the entrepreneurial spirit and innovation that
the internet unleashes. The key to growing entrepreneur-

Closing the Digital Divide

A Framework for Meeting CRA Obligations

rr Affordable

Housing

Investment in affordable housing for LMI communities
is a key aspect of community development under the CRA
and provides opportunities for banks to partner with local
public housing authorities (PHAs) and community housing
development organizations (CHDOs) to not only build
affordable housing, but to also close the digital divide.

7

Federal Reserve Bank of Dallas

Acknowledging that broadband internet connectivity
is now considered a basic public utility such as electricity
and water, federal agencies such as the U.S. Department
of Housing and Urban Development (HUD) have made
broadband access in the home a priority. For example,
ConnectHome is a joint effort of HUD and the White
House to encourage broadband adoption by residents living
in HUD-assisted housing developments across the U.S.
The pilot program includes 28 communities across the
country and encourages collaboration between local
governments, public housing agencies, internet service providers, philanthropic foundations, nonprofit organizations
and other relevant stakeholders in an effort to create local
solutions for closing the digital divide.
ConnectHome seeks to:
•

Make broadband more adoptable by building new
models to provide broadband infrastructure and to
offer residents free or discounted service

•

Make broadband internet more valuable by giving
residents localized, free and culturally sensitive
training in essential digital literacy skills that will
allow them to effectively use high-speed internet

•

Make broadband internet adoption sustainable by
providing devices and technical support to residents31

person goes to the library to apply for a job online, he may
not be able to return to the library every day to check email
to see if he has been granted an interview.
To address the need for affordable broadband access in
the home, the FCC released the Lifeline Modernization Order in April 2015. This order expands the Lifeline universal
service program to include broadband. The program “was
created in 1985 and currently provides a monthly $9.25 subsidy for telephone voice service to over 13 million low-income households.” In addition, “the FCC’s Consumer and
Governmental Affairs Bureau will develop a digital inclusion
plan. … The plan will engage consumer groups, community
and philanthropic organizations, local government, and
industry stakeholders to explore strategies to increase the
availability of affordable service and equipment, digital
literacy training, and relevance programming.”33
Another HUD program that allows funds to be used for
broadband projects is the Community Development Block
Grant (CDBG) program. The CDBG program provides
communities with resources to address a wide range of
unique community development needs, including affordable
housing and broadband. On May 17, 2016, HUD Secretary
Julián Castro issued a proposed rule change that would
require broadband infrastructure to be incorporated into
most HUD-financed multifamily housing developments
during construction or when existing facilities are rehabilitated. Secretary Castro said, “Ensuring that future HUD
funded properties are broadband ready reaffirms our commitment to closing the digital divide beyond modems and
laptops. … We want to give our residents and their children
the opportunity to connect to the world and compete in
the 21st century.”34

ConnectHome was well received in 28 pilot communities across the nation, and HUD is planning ConnectHome
2.0 to reach more communities.
A recent article in The New York Times highlights the
impact of the digital divide in Detroit, which has “the worst
rate of internet access of any big American city, with four
in 10 of its 689,000 residents lacking broadband. … The
consequences appear in the daily grind of finding connectivity, with people unable to apply for jobs online, research
new opportunities, connect with health insurance, get
college financial aid or do homework.” Public libraries are
often looked upon as replacements for broadband in the
home; however, this solution has limitations. Time limits on
computer use and long wait times at public libraries and
community centers can prevent those most in need from
accessing the internet for these basic services.32 Even if a

Closing the Digital Divide

A Framework for Meeting CRA Obligations

rr Access

to Health Care

Health is fundamental to individuals, families and the
economy. “Good health reduces poverty, protects family
assets, improves educational performance, increases labor
productivity, enhances the investment climate and, through
all of these things, stimulates economic growth.”35 Health is
considered an important area of the CRA, and in 2014, the
Dallas Fed published a framework for financial institutions
to invest in healthy communities. The publication makes
the case that good health is good for the economy at the

8

Federal Reserve Bank of Dallas

individual and household level and for regional and national
economies.36
Today, the provision of quality health care relies on the
use of digital health information and tools. Increasingly,
health providers expect their patients to use digital tools
and applications to ensure better health outcomes. Without broadband access, digital literacy training and technical
support, LMI patients are at a disadvantage when it comes
to managing their health outcomes in a digital society. In
addition, some geographies with broadband access may not
have sufficient speeds to accommodate the transmittal of
certain data used in telemedicine.

of Veterans Affairs administer the country’s largest telehealth programs, which provide direct patient care. With
broadband access at sufficient speeds, specialists can see
patients, share health information and confer with primary
care doctors who are hundreds of miles away.
State agencies, including the Texas Health and Human
Services Commission (HHSC), now offer online and mobile
applications for people to conveniently assess eligibility and
apply for state programs such as Supplemental Nutrition
Assistance Program food benefits, Medicaid, the Children’s
Health Insurance Program or Temporary Assistance for
Needy Families benefits. The goal of the “Your Texas Benefits” app is to make it possible for people to find out if they
are eligible for state benefits through their smartphone.
Additionally, as noted in an HHSC publication, “One of the
most common reasons people visit our offices is to drop
off documents, and we want to make that process easier
for people who work or have children or limited transportation.”40

The World Health Organization defines telemedicine as "the delivery of healthcare services, where
distance is a critical factor, by all health care professionals using information and communication technologies for the exchange of valid information for
diagnosis, treatment and prevention of disease and
injuries, research and evaluation, and for the continuting education of health care providers, all in the
interests of advancing the health of individuals and
their communities."37 This publication uses the terms
telehealth and telemedicine interchangeably.

Many LMI communities across the U.S. lack access to
quality and appropriate health care due to geographic location, such as the Texas–Mexico border region with a mix
of urban and rural areas that have a lower ratio of health
care professionals to population and a scarcity of specialists
in their communities.38 Broadband access is an essential
means for these communities to create alternative opportunities for accessing health care through proven technologies such as telemedicine. The Department of Health
and Human Services’ Office of the National Coordinator
for Health Information Technology identifies telehealth
as a means to improve the care provided to Americans by
addressing gaps in access and quality of health care services, assisting in the transformation of primary health care
practices, and by overcoming geographic barriers to health
care.39
Many government agencies use telehealth to serve
their diverse patient populations. In fact, federal agencies
such as the Department of Defense and the Department

Closing the Digital Divide

A Framework for Meeting CRA Obligations

9

Federal Reserve Bank of Dallas

Identifying Best Practices
PART TWO
As digital access became more important, the progress schools and other nonprofits made in closing the digital
divide came intermittently. For example, in some cases, computers would be handed out to students who had no
training or internet access at home. Or training would be given to older adults, but they would have no online access
in their daily lives. In those cases, the intended goal was not achieved. To achieve success, it is critical to invest in
community programs that include all of the “three legs of the stool” of broadband adoption:
Broadband access

Computer access

Training & technical assistance

When there is an opportunity, banks can blend or layer the types of investments they make in broadband to
include the “three legs of the stool.” An example would be investing in infrastructure with a loan for a middle-mile
fiber-optic project and supporting adoption programs through grants that provide computers and technical assistance/training to LMI families. To take their work even further, bank employees can offer online financial education/
online banking training as part of their efforts to provide relevant skills that help people apply the usefulness of the
training in their everyday lives.
Measure outcomes to identify what works. The U.S. Department of Commerce National Telecommunications
& Information Administration’s (NTIA’s) Broadband USA is working with communities to define the measures that
accelerate local, regional and national broadband efforts. The goal is to provide metrics to help communities better
measure and demonstrate the impact of their programs or projects. See NTIA Broadband USA in Appendix C.
Programs need to consider the barriers to adoption people experience: access, cost, relevance, perception
and skills. For example, an organization can make training relevant by teaching computer and internet skills by having
participants complete online workforce development certification programs or apply for jobs online or by offering
financial literacy modules that include learning how to use online banking features, such as remote deposit. Best
practices for broadband adoption are provided in the NTIA Broadband Adoption Toolkit.41
Best practices for effective public-private partnerships in providing broadband to communities can be found
in three key publications. The White House publication, “Community-based Broadband Solutions”; Gig.U’s The Next
Generation Network Connectivity Handbook: A Guide for Community Leaders Seeking Affordable, Abundant Bandwidth; and the U.S. Department of Commerce’s, National Telecommunications and Information Administration’s
NTIA: Public–Private Partnership Guide.42
Communities should consider the internet speed that will meet their economic development goals. For example, a community may have plans to work with hospitals and clinics to use telemedicine to bring health care to
underserved areas, some of which requires gigabit speed. Or, a local university may need gigabit speed to conduct
advanced research.
Training programs for youth and adults should cover the subject of internet safety and security. A useful
resource is the nonprofit Common Sense Media's K-12 digital citizenship curriculum. For this and related resources
for educators, parents and youth, visit www.commonsensemedia.org.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

10

Federal Reserve Bank of Dallas

Identifying Opportunity
PART THREE

Definitions

Become familiar with state and local experts and
projects. See Appendix C for resources to understand the
digital divide in your assessment area, and use the best
practices noted in part two to evaluate opportunities.
Use the Census Bureau and U.S. Department of Commerce NTIA for map resources showing broadband connectivity in various geographic areas—national, state and local.
See Appendixes C and D.

Middle Mile—The wire-line infrastructure that runs
between the internet service provider's central office
and internet point of presence. Middle-mile infrastructure connects places or communities to infrastructure,
but doesn't connect individual homes or buildings.
Fiber-to-the-Premises(FTTP)/Fiber-to-the-Home
(FTTH)—High-speed internet infrastructure that connects directly to residents' homes. By comparison,
some communities have fiber infrastructure that connects business districts or community anchor institutions like schools and hospitals.

rr Examples

of Initiatives to Close
   the Digital Divide
For successful examples of public-private partnerships
that provide local broadband infrastructure, see “Community-based Broadband Solutions” and The Next Generation
Network Connectivity Handbook: A Guide for Community
Leaders Seeking Affordable, Abundant Bandwidth.45 The
stories of Chattanooga, Tennessee, Lafayette, Louisiana,
the Choctaw Nation Tribal Area, Oklahoma, and others are
highlighted.
Successful examples of programs that focus on the
adoption of computers and broadband in LMI communities
can be found in the U.S. Department of Commerce’s, NTIA
Broadband Adoption Toolkit.46 Additionally, for an example
of a web tool designed to be used by digital inclusion programs, see Money Smart Kansas City, a resource created
by the FDIC, the Kansas City Fed and other partners.47
Featured below are three additional examples.

Dark Fiber—Fiber that is in place but not being
used. Communities and businesses often deploy dark
fiber during a construction project for other purposes,
such as fixing sewer lines, since the incremental cost of
such deployment is low compared with the significant
cost of construction solely for the sake of deploying the
fiber. The fiber can be “lit” at such time as the demand
justifies providing a service over fiber.43
Last Mile—Broadband service to the end-user
devices through an intermediate point of aggregation.
In most cases, the last-mile connection goes from the
end-user device (in the home) through an intermediate
point of aggregation (i.e., a remote terminal, fiber node,
wireless tower or other equivalent access point) to a primary internet provider (IP) routing entity in a centralized
facility.44

Digital Opportunity for the Rio Grande Valley
(DO4RGV), South Texas
www.dallasfed.org/microsites/cd/colonias/econop.html
In 2015, the Dallas Fed released a report about Texas
colonias—low-income peri-urban and rural informal
settlements along the Texas border region—characterized
by their lack of basic infrastructure and substandard,
often self-built housing. The study involved focus groups
with colonia residents. One theme that arose from the
conversations with residents was the lack of access to the
internet. The report found that the digital divide was a
factor preventing residents from accessing regional labor

A student from PSJA ISD's Garza-Peña Elementary School participates
in a computer skills class. Photo credit: Pharr-San Juan-Alamo ISD.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

11

Federal Reserve Bank of Dallas

market opportunities. Additionally, the report described the
challenges colonia students face in school because of their
inability to complete homework assignments due to lack
of internet service and computers at home.48 Of the 381
metropolitan areas in the U.S., those with the lowest rates
of internet use by individuals include three Texas border
metropolitan statistical areas (MSAs)(Chart 3).
chart

3

•

Out of the initial meeting, the DO4RGV was formed,
and the quest to find the solution began. The colonias
report revealed that policy approaches that address issues
in silos don’t solve the biggest challenges in the region, and
great value is left on the table. As the group discussed how
broadband had been approached in the past, members
realized that working in silos led to piecemeal or “band
aid” projects that did not get the desired results. The
group learned that what was needed was a comprehensive,
holistic approach for the region.
With the knowledge that TATOA brought to the table in
meetings with local officials, DO4RGV was able to identify
the ultimate goal: The creation of a robust fiber-optic regional network that connects the major anchor institutions
and provides the infrastructure for companies or co-ops
to cost effectively provide last-mile, fiber-to-the-home or
Wi-Fi service to LMI residents. The group began to understand how it could transform the economy of the region.
To start building the network, the group decided to
implement a demonstration middle-mile project with the
city of Pharr and PSJA ISD focusing on:

Broadband Access Falls Short in Texas Border
Metro Areas vs. Austin–Round Rock

Percent
100
90

82.8

80
70
60

51.8

50

57.4

55.2

Brownsville–
Harlingen

McAllen–
Edinburg–
Mission

40
30
20
10
0

Laredo

Austin–
Round Rock

SOURCE: Census Bureau, 2013 American Consumer Survey.

The serious concern about the digital divide in the border region led the Dallas Fed to convene a collective impact
group of Rio Grande Valley community members to discuss
the issue and determine possible approaches to solving the
problem. The members of the collective group include:
•

Dallas Fed

•

University of Texas Rio Grande Valley (UTRGV)

•

Texas Association of Telecommunications Officers
and Advisors (TATOA)

•

Pharr–San Juan–Alamo (PSJA) Independent School
District (ISD)

•

City of Pharr

•

La Joya ISD

•

Region One Educational Service Center

•

ACT

•

Health and Human Services Commission

•

City of McAllen

•

City of Brownsville

•

Deep South Texas Financial Literacy Alliance

Closing the Digital Divide

A Framework for Meeting CRA Obligations

Doctors’ Hospital at Renaissance and others

Infrastructure. DO4RGV is mobilizing resources and
working with local governments, PSJA ISD and the city of
Pharr to build and own its own broadband network that
will be used as a springboard to incentivize the last mile.
The goal is for internet service providers to lease from the
municipal network to provide the last-mile services to residents, as Google Fiber announced it would do in Huntsville,
Alabama.49 CTC Technology has been hired to complete the
strategic plan/feasibility study for the project.
School district. In fall 2016, more than 100 students
and their families from PSJA will be provided with computers, broadband access and bilingual training and technical
support as evidence of the impact DO4RGV can achieve for
the region.
The purpose of the demonstration is to create a successful replicable model to roll out across the Rio Grande
Valley. Regional anchor institution, UTRGV, has been
involved throughout the project and will be an important
player in taking the project to scale across the region. In
addition, a partnership with UTRGV’s College of Business

12

Federal Reserve Bank of Dallas

and Entrepreneurship will provide trained IT students who
will work with the students and families at PSJA. Together,
the college students and the K–12 students will make up the
“Digital Opportunity Corps” who will serve as experts in
their communities.
Local banks have stepped up to support the project.
BBVA Compass, the bank with the most branches along the
U.S.–Mexico border, has provided a grant for the strategic
plan/feasibility study. BBVA also offered to make its online
financial education program a part of the digital inclusion
training for students and parents at PSJA. Additionally,
Capital One provided seed money for the demonstration.

Even after the communities said they would be passive
investors and allow providers to retain their customers, the
incumbents were still unable to work with the cities. This
was the motivation behind the development of the fiber-optic cooperative. RS Fiber Cooperative, named because the
entire network was located in Renville and Sibley counties,
is in the first year of a six-year construction schedule to
build a $45 million telecommunications network. This
network will provide high-speed fiber-optic connectivity
to communities in south central Minnesota and provide
broadband service to homes, farms, businesses, health care
facilities, schools and local government in competition with
current commercial providers.
This unique initiative received full support from the 10
municipalities and 17 townships involved. The main objective is to provide affordable and quality broadband access
along with other services such as cable and telephone. To
achieve this, the 10 cities bonded for more than half the $15
million Phase One cost. The bond proceeds were loaned
to the cooperative, and that loan was made subordinate
to additional loans. Phase Two, which will cost $30 million,
will extend fiber-to-the-farm in each of the townships that
have elected to join the project. RS Fiber Cooperative hired
Hiawatha Broadband Communications (HBC) to provide
the internet, telephone and television services across the
network. The project is expected to result in enhanced
economic development opportunities for businesses and
job creation for local residents.
An informal consortium of community banks, including
the First National Bank of Fairfax (FNB Fairfax), has participated on a construction line of credit. FNB Fairfax has also
committed an equity investment in RS Fiber Cooperative.
It received permission to do so under the Public Welfare
Investment Authority as determined by its regulator, the
Office of the Comptroller of the Currency (OCC). FNB
Fairfax is a national bank operating in the RS Fiber Cooperative’s proposed service area.
The Public Welfare Investment Authority allows national banks to make investments that are not otherwise
expressly permitted under the National Bank Act. State
member and nonmember banks also have public welfare
investment (PWI) authority. It is a tool a bank can use
to help meet the credit needs of its communities. Banks
may make investments, directly or indirectly, that are

Objectives:
•

Improve educational opportunity and results for
Pre-K–12 students and their families across the
region (close the “homework divide”)

•

Improve access to workforce opportunities, including training and job opportunities

•

Improve access to health care providers and
telemedicine

•

Improve access to the internet and online marketing for microentrepreneurs in the region

•

Improve access to financial services and online
banking

•

Improve financial literacy through access to online
training platforms

West Central Minnesota Fiber-Optic Cooperative
www.ilsr.org/wp-content/uploads/downloads/2016/04/rs-fiberreport-2016.pdf
This example in rural Minnesota demonstrates how
banks can make loans and investments in broadband for
LMI communities or distressed and underserved nonmetro
middle-income geographies.
City councils in 10 west central communities were dissatisfied with the state of their telecommunication services.
Existing networks were insufficient to carry the volume of
data at speeds necessary to meet future economic development needs. The incumbent providers were unable to find
a way to invest in a fiber-to-the-home-and-farm network.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

13

Federal Reserve Bank of Dallas

primarily designed to promote the public welfare such as
by providing housing, services or jobs under the investment
authority in 12 USC 24 and the implementing regulation, 12
CFR 24. “Investments” include both equity investments and
debt investments, such as equity equivalent investments or
other debt. PWIs are investments that primarily benefit LMI
individuals, LMI areas (as well as distressed or underserved
nonmetropolitan middle-income areas), or other areas
targeted by a government entity for redevelopment, or if
the investments would receive consideration under 12 CFR
25.23 (the CRA regulation) as a “qualified investment.”
If consideration is to be given under the CRA, a bank’s
PWI must meet the “primary purpose” requirement and
benefit at least one of the following (12 CFR 24.3):
•

LMI individuals

•

LMI areas

•

Areas targeted by a government entity for
redevelopment

•

The investment would receive consideration under
12 CFR 25.23 (the CRA regulation) as a qualified
investment.

To meet the challenge, the superintendent, Darryl
Adams, decided to propose a novel approach. CVUSD provided iPads to students and made the school buses mobile
Wi-Fi hotspots so students could do their homework while
riding the bus to and from school. CVUSD covers a large
geography and many rural areas, so there is a great deal of
time spent on buses. However, the leadership realized that
students also needed access at home, after school hours.
So, they decided to park the buses (starting with three
buses) in the highest-need neighborhoods and reservations. The students in those communities then had 24/7
Wi-Fi access. However, they faced the challenge of how to
power the Wi-Fi devices on the buses overnight. Initially,
they were going to use the bus battery, but quickly found
that the battery would drain and the bus couldn’t start the
next morning. Not to be daunted, the leadership decided to
install solar panels on the buses, which have been an ideal
solution.51
The superintendent has now expanded the successful
program to more buses in more neighborhoods. Other
school districts have also now developed similar programs.
This CVUSD initiative to help close the homework divide
was featured on PBS NewsHour.52

This precedent, set by the OCC, makes it easier for
other banks across the country to receive approval to use
PWI to support local broadband infrastructure projects.
Fiber-optic investments are novel PWIs. It is recommended
that banks seek prior approval from their regulator before
proceeding.

Wi-Fi on Wheels, Coachella Valley Unified School
District (CVUSD), California
www.cvusd.us/pages/coachella_valley_USD
At the CVUSD in Southern California, the superintendent and school board had a serious “homework gap”
challenge—40–50 percent of their students did not have
access to Wi-Fi to search for information and complete
their homework assignments. The school district, with 22
schools in Riverside and Imperial counties, serves 18,850
students—97.2 percent are Hispanic, and 87.2 percent of
the students are eligible for free and reduced lunches.50

Closing the Digital Divide

A Framework for Meeting CRA Obligations

CVUSD students complete their homework in front of a CVUSD WiFi-enabled school bus. Photo Credit: Coachella Valley unified school
district.

14

Federal Reserve Bank of Dallas

Preparing Your Case

rr Tips

PART FOUR
Understanding how their community development activities meet CRA requirements is vital information for CRA
and compliance officers when they are communicating with
internal management, customers, community partners,
target communities and bank examiners.
In July 2016, the Federal Reserve, the Office of the
Comptroller of the Currency and the Federal Deposit
Insurance Corp. published an updated CRA guidance—the
2016 Interagency Questions and Answers. In the new Q&A,
broadband is included as a form of infrastructure investment, and the agencies identify communications infrastructure as an essential community service and describe
how investing in new or rehabilitated communications
infrastructure is consistent with the CRA regulatory definition of community development. For examples of the types
of infrastructure investment that may be needed in your
community, see Appendix A. The new Q&A also provides
guidance on alternative delivery systems for providing retail
banking services, such as online banking.
The CRA Q&A is available on the agencies’ websites and
on the Federal Financial Institutions Examination Council
website: www.ffiec.gov. The Q&A is not meant to be exhaustive; thus, the Federal Reserve Bank of Dallas produced
this publication to help financial institutions understand
how to invest in broadband access and digital inclusion. This
publication also illustrates (in Part One) how broadband
access has become an integral part of the key areas of
community development and the CRA.
To help ensure that the community development
activities they are considering or planning meet CRA
requirements in a safe and sound manner, financial institutions should refer to the information in the tips and CRA
documents listed below. For more detailed data, financial
institutions should consult the CRA webpage of the Federal
Financial Institutions Examination Council. Additionally,
they should also contact their CRA examiners to obtain
specific feedback on the strengths and weaknesses of their
community development activities and opportunities for
improvement.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

15

for Preparing Your Case

•

The Community Development (CD) definition (under
the CRA) includes activities that revitalize and stabilize
LMI areas. A bank could receive credit for helping
supply broadband to targeted LMI areas if it could
demonstrate that it helps the LMI areas/people—such
as enhancing access to banking services, social services,
health care and educational activities. The activities
would have to meet the definitions of CD loan, investment, service. Examiners will also determine whether
the activity is consistent with the community’s formal
or informal plans for the revitalization and stabilization
of the low- or moderate-income geography.

•

Q&A § __.12(g)(4)(i) – 1: What activities are considered to “revitalize or stabilize” an LMI geography,
and how are those activities considered? A1: Activities
that revitalize or stabilize a low- or moderate-income
geography are activities that help attract new, or
retain existing, businesses or residents. Examiners
will presume that an activity revitalizes or stabilizes an
LMI geography if the activity has been approved by
the governing board of an Enterprise Community or
Empowerment Zone (designated pursuant to 26 U.S.C.
1391) and is consistent with the board’s strategic plan.
They will make the same presumption if the activity
has received similar official designation as consistent
with a federal, state, local or tribal government plan for
the revitalization or stabilization of the low- or moderate-income geography.

•

Under the CRA service test, banks should provide
evidence that their “alternative delivery systems” using
online banking and financial technology are being used/
adopted and are effective in providing services to LMI
individuals. If banks support the work of nonprofits,
economic development corporations, schools and
public housing authorities that are serving communities
in closing the digital divide, they will potentially be
developing an LMI customer base that will have broadband access and knowledge of online banking (if the
training program includes online banking and financial
education, as some do). The key for banks will be to
provide the evidence. The 2016 Q&A adds evaluation

Federal Reserve Bank of Dallas

criteria that examiners will use to make this determination. The new evaluation criteria are: 1) ease of access,
whether virtual or physical; 2) cost to consumers, as
compared with the institution’s other delivery systems;
3) range of services delivered; 4) ease of use; 5) rate
of adoption and use; and 6) reliability of the system.
•

•

•

story as: “Closing the Digital Divide: A Framework for
Meeting CRA Obligations” by Jordana Barton, Federal
Reserve Bank of Dallas, July 2016.
rr CRA

Q&A § __.22(b)(5), Innovative or Flexible Lending
Practices, answers, “What are the range of practices
that examiners may consider in evaluating the innovativeness or flexibility of an institution’s lending under
the lending test applicable to large institutions?” This
Q&A describes how examiners may give consideration
for innovations when they “augment the success and
effectiveness of the institution’s lending under its loan
programs that address the credit needs of low- and
moderate-income geographies or individuals.” Thus,
a bank can go for the trifecta in its approach to the
digital divide in its community. It can provide: 1) a loan
to support broadband infrastructure deployment; 2) a
grant to provide computers and a broadband adoption
training program; and 3) bank employees who offer
technical assistance in the form of teaching or serving
as a resource for a nonprofit working to promote
digital literacy skills. The grant and technical assistance
training are intended to impact the effectiveness of
the infrastructure loan. Therefore, by supporting a
broadband adoption program, the ultimate goal of the
loan—providing broadband to LMI geographies and
individuals—is met.

A Framework for Meeting CRA Obligations

Reference Guides

“Interagency Questions and Answers (Q&A)
Regarding Community Reinvestment,” Federal
Financial Institutions Examination Council, July
2016
www.ffiec.gov/cra/qnadoc.htm
FedCommunities, Federal Reserve System
www.fedcommunities.org
CRA OneSource, Federal Reserve Bank of Kansas
City
www.kansascityfed.org/community/cdi/craonesource
“A Banker’s Quick Reference Guide to CRA,”
Federal Reserve Bank of Dallas, 2005
www.dallasfed.org/assets/documents/cd/pubs
/quickref.pdf
“CRA Loan Data Collection Grid,” Federal
Reserve Bank of Dallas, 2015
www.dallasfed.org/assets/documents/cd/pubs/craloan.pdf

New Markets Tax Credit eligible investments are
examples of qualified investments under the CRA. The
U.S. Department of the Treasury, Community Development Financial Institution Fund’s 2015 Application
FAQs include broadband as an eligible New Markets Tax
Credit (NMTC) Program investment. Question 41: “Can
NMTCs be used to finance broadband infrastructure or
related activities? Broadband infrastructure and related
activities are eligible for NMTC investments provided
that these activities meet the IRC regulations related
to a business qualifying under the NMTC program. For
additional details, please see IRC 45D and related IRS
guidance.”53

Closing the Digital Divide

Cite this publication in your community development

“Community Development Decision Flow Chart,”
e-Perspectives, vol. 7, no. 4, 2007
www.dallasfed.org/microsites/cd/epersp/2007/4_3.cfm
“An Introduction to CRA: Community Reinvestment Act,” video
www.frbsf.org/community-development/initiatives/
community-reinvestment-act

16

Federal Reserve Bank of Dallas

A Template for Financial Institutions to Tell Their CRA Story
PART FIVE

Your Financial Institution's Community Development Story
Section A: Background
I. Your mission and/or purpose
II. Your geographic market(s):
A discussion of demographic data related to income, deposit market share, Home Mortgage Disclosure Act market share, CRA small-business/small-farm share and identified needs. For demographic information, a bank can
use the Census Bureau data (some of which is provided in this report), the broadbandmaps and the community’s
economic development plan.

III. Define the CRA
Below is sample text.
ɧɧ

“Under the Community Reinvestment Act (CRA), it is our responsibility to identify and invest in low- and
moderate-income (LMI) communities. These activities must benefit both our financial institution and these
communities.”

ɧɧ

“The CRA defines community development as that which encompasses affordable housing (including
multifamily rental housing) for LMI individuals; community services targeted to LMI individuals; activities that promote economic development by financing businesses or farms that meet the size eligibility
standards of the Small Business Administration’s Development Company or Small Business Investment
Company programs or have gross annual revenues of $1 million or less; or activities that revitalize or
stabilize LMI geographies, designated disaster areas or distressed or underserved nonmetropolitan
middle-income geographies designated by the Federal Reserve Board of Governors, the Federal Deposit
Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).”

IV. Examples of how your financial institution has met your CRA obligations
Below is sample text.
ɧɧ

“There is a distinct digital divide in our assessment area (see NTIA broadband map for our assessment area
below) and this is how LMI people are affected. … Our work with (give name of partner, such as nonprofit,
economic development center or school) to bring broadband infrastructure to LMI communities is designed
to revitalize and stabilize the LMI geography. … (Provide evidence of impact on workforce development,
access to health care through telemedicine, small-business development or improved educational outcomes.)

ɧɧ

“Specifically, we provided a grant (amount) to offer home Wi-Fi and computers, as well as training for students at the local high school to help close the homework divide. The majority of students at the high school
are LMI (>51 percent of the students qualify for free and reduced lunches.)”

Closing the Digital Divide

A Framework for Meeting CRA Obligations

17

Federal Reserve Bank of Dallas

ɧɧ

“We work with (provide name of Community Development Financial Institution (CDFI)) in training LMI
small-business owners on how to use internet marketing to expand and grow their businesses.”

ɧɧ

“We work with community development housing organization (name) to provide construction loans for affordable housing that includes broadband infrastructure.” (Share success stories.)

ɧɧ

“We provide grants to CDFIs (list dollar amount in specific time period) to make broadband Wi-Fi infrastructure available to LMI microbusinesses and small businesses. These organizations are. …”

ɧɧ

“We provided an equity equivalent investment (EQ2) to a CDFI community loan fund (name) that will in turn
finance broadband infrastructure in LMI geographies and in nonmetro middle-income geographies.”

ɧɧ

“Local community leaders have identified a need for making broadband available for LMI residents. We have
joined a collective impact initiative to close the digital divide. …”

ɧɧ

“Our partnership with an LMI local middle school to close the digital divide involves training parents and
students in improving their financial literacy skills by using an online financial education platform called. …”

ɧɧ

“We partner with the public housing authority to support their Connect Home program. Specifically, we
provide funding and serve as trainers to help LMI residents who have thin or no credit to build credit. Building
a credit score is important because it is used to determine loan terms such as APR (annual percentage rate)
and the down payment amount and rates charged for insurance products such as motor vehicle insurance.
Here are examples of how we help them build credit through our online training program. …”

ɧɧ

“In an LMI community that did not have access to a brick-and-mortar bank, we worked with the local school
district to provide access to bank accounts, computers, and training for parents on how to use online banking
to meet their needs. Below are the results of our efforts. …”

ɧɧ

“Through online banking, parents are able to access products and services for their daily financial needs and
reduce trips to the brick-and-mortar branch. They learn that online banking provides the flexibility that LMI
families often need because of the difficulty in leaving work during traditional banking hours.”

ɧɧ

“We partner with a community development corporation (list name of CDC) that includes fiber to the home
as part of the design of the housing development and neighborhood. The cost-effective model the CDC has
developed fits the budget of working households that live or work in a distressed/underserved/designated
disaster area. These families would otherwise have few options for safe and affordable housing with broadband connectivity. …”

ɧɧ

“We use low-income housing tax credits to help build a multifamily housing complex (give the number of
affordable units) with the city’s Housing Authority and built-in fiber to the premises to be able to provide
online workforce development training, financial literacy and have an impact on closing the homework divide
for LMI residents. … (describe how the credits were used). Our partners were. … (List public, private and
nonprofit organizations.)”

ɧɧ

“Using New Markets Tax Credits, we helped build a new university health clinic in a low-income neighborhood that lacked access to affordable care (provide stats). We worked with the health clinic to serve as an
anchor institution in bringing broadband connectivity to the surrounding neighborhood. For neighborhoods
in our assessment area but further away from the new clinic, we provided grant support in the amount of (give
amount) to support the clinic’s efforts to serve customers long distance through telemedicine. Our partners
were. … (List public, private and nonprofit organizations.)”

Closing the Digital Divide

A Framework for Meeting CRA Obligations

18

Federal Reserve Bank of Dallas

Section B: Our Current Area(s) of Focus
I. Background: The Closing the Digital Divide Framework
ɧɧ

“Due to the detrimental effects of the digital divide on LMI communities in our assessment area, we are now
using the Dallas Fed’s "Closing the Digital Divide: A Framework for Meeting CRA Obligations" to help guide
our community development strategy.”

ɧɧ

“The digital divide disproportionately affects LMI communities, and broadband access is the foundation for
much of our work in community development. We met with community leaders who had identified the digital
divide as a key impediment to having citizens lift themselves out of poverty and access regional labor market
opportunities. For example, to have an impact on workforce development in our assessment area, it was
evident that families needed access to the online trainings that were offered through the local community
college, as well as access to online job postings and applications. As noted in the Dallas Fed’s "Closing the
Digital Divide: A Framework for Meeting CRA Obligations," 80 percent of jobs are posted online, and not
having access presents a significant barrier for LMI residents.”

II. Our Community Development Focus
ɧɧ

“LMI communities are disproportionately affected by the digital divide. As noted by the White House in its
Connect America initiative, “Internet adoption rates in the most affluent homes reach 80–90 percent, while
the homes with the lowest median incomes have internet adoption rates of around 50 percent.” At (name
your financial institution), we are becoming actively engaged in helping change this statistic in our CRA
assessment area by supporting (nonprofit, school). … This area consists of. … (Define the geographic area.)”

ɧɧ

“In the area of workforce development and human capital, we partnered with a nonprofit (name) and school
district (name) that were bringing Wi-Fi to school buses to help close the homework divide. The program
provides access to students during their ride to and from school. The program also parks the school buses
in LMI neighborhoods overnight so students can access broadband for homework. To be sure the initiative
included the “three legs of the stool” described in the Dallas Fed’s publication, "Closing the Digital Divide:
A Framework for Meeting CRA Obligations," our institution invited in university partners who developed a
program to refurbish computers and provide them to the families along with computer-skills training. We
conducted a baseline survey and year-end survey and found: 1) the number of times that the parents were
able to communicate with teachers and resolve problems increased by (state the percentage); 2) children
were performing better in school as determined by (state metrics used); 3). … ”

ɧɧ

“We conducted research on our assessment area by meeting with community leaders and local nonprofits
and used the tools laid out in Gig.U’s, The Next Generation Network Connectivity Handbook: A Guide for
Community Leaders Seeking Affordable, Abundant Bandwidth, to understand the opportunities for broadband investment in LMI communities. The following is an overview of the broadband gaps we identified, the
actions we took and partnerships we formed to close those gaps.”

ɧɧ

“As noted in the Federal Reserve Bank of Dallas report, "Las Colonias in the 21st Century: Progress Along the
Texas–Mexico Border," that covered our assessment area, the lack of broadband access in our LMI communities is a factor in keeping people from regional labor market opportunities and breaking the cycle of poverty.
We joined a collective impact group in the area with the goal of closing the digital divide in our region. As a
group, we have taken action and our institution played the following role. …” (Give specific examples.)

ɧɧ

“We decided to focus on the following local digital divide projects: (List your partnerships and activities.)”

Closing the Digital Divide

A Framework for Meeting CRA Obligations

19

Federal Reserve Bank of Dallas

Section C: Our Projected Impact
The following information may be helpful in sharing your community development story with internal management, customers, community partners, target communities and bank examiners.
ɧɧ

“We decided to focus on broadband access in conjunction with our other community development activities
because the significant digital divide in our community was an impediment to every other area of community development: workforce development, small-business development and access to financial services. As
noted in "Closing the Digital Divide: A Framework for Meeting CRA Obligations," broadband is and essential
infrastructure for all communities.

ɧɧ

(Explain which community leaders identified the need and how you decided that it made business sense.)

ɧɧ

“The consultant our local Economic Development Corporation hired to provide the feasibility study for building the city’s (give name) middle-mile network, provided a cost analysis and demonstrated the savings over
time, as well as the new income stream the city would gain by investing in the network, thus building the
productive assets of the local government. The following cost analysis was provided. … The analysis also
included the benefits to LMI residents when a local government invests in its broadband infrastructure. …”

ɧɧ

“The return-on-investment (ROI) is expected to be strong for both our financial institution and the communities in which we invest. Outlined below are estimates of the financial returns.”
ɦɦ

Financial ROI to your financial institution: (Explain who calculated this, how it was calculated and the
estimated time frame.)

ɦɦ

Financial ROI to your community partners: (Explain who calculated this, how it was calculated and the
estimated time frame.)

ɧɧ

“It will generate a savings that is estimated to be. … (Explain who calculated this, how it was calculated and
the estimated time frame.)

ɧɧ

“The impact is expected to be positive for both our financial institution and the communities in which we
invest. Written below are estimates of the financial and social impacts."
ɦɦ

Financial impact to your financial institution: (Explain who calculated this, how it was calculated and
the estimated time frame.)

ɦɦ

Financial impact to your community partners: (Explain who calculated this, how it was calculated and
the estimated time frame.)

ɦɦ

Financial impact to your community: (Explain who calculated this, how it was calculated and the
estimated time frame.)

ɦɦ

Social impact to your financial institution: (For example), “Our community development activities
entail developing and maintaining strong community partnerships, which are vital to building mutual
trust and respect between us and the community.”

ɦɦ

Social impact to your community partners: (For example), “This is what our community partners are
saying about our community development activities.”

ɦɦ

Social impact to the community: (Explain who calculated this, how it was calculated and the estimated
time frame.)

Closing the Digital Divide

A Framework for Meeting CRA Obligations

20

Federal Reserve Bank of Dallas

ɧɧ

“The financial impact of our investments in broadband infrastructure on our institution is neutral/negative in
the short term. However, the positive regulatory impact and the financial impact of creating an economy in
the region where entrepreneurship can thrive, and where all income levels have access to online banking, are
projected to generate a positive financial impact in the long term. Specifically, the people we help today will
grow into our customers tomorrow. Here’s how: . …” (Explain your strategy/plan.)

ɧɧ

(Describe the community collaborative that you’re involved in that is promoting broadband in your communities. For example), “In our assessment area, we are involved in a collaborative/partnership/initiative called. …
Its purpose is to. … The collaborative meets our community development obligations by focusing on. …” (List
at least one of the four community development purposes: 1) affordable housing; 2) community services that
target LMI individuals; 3) economic development; 4) revitalization or stabilization. Next, explain the model
that the collaborative is using to identify the community’s priority areas and assess its impact. Examples are
below.)
ɦɦ

“The model that we are using to identify our priority areas and assess our impact is outlined in the
"Closing the Digital Divide: A Framework for Meeting CRA Obligations." … These are the components of our program. … Following is a list of our accomplishments and plans in the near term.”

ɦɦ

“The model that we are using to identify our priority areas and assess our impact is the collective impact model.”54 (List the backbone and support organizations.) “We play a leadership role by serving
on the advisory committee and providing financial guidance (give specific examples of the type of
financial guidance you are providing), and we provided a grant in the amount of (provide amount) to
support the broadband infrastructure component of the project. Following is a list of our accomplishments and plans in the near term.”

Section D: Our Leadership Role
I. Our Specific Leadership Role
ɧɧ

“We are playing a leadership role in our assessment area by supporting the community development best
practices identified by (cite source, i.e. The Federal Reserve Bank of Dallas, The White House, NTIA, Gig.U or
Next Century Cities) and introducing our community partners to the community development best practices.
Here’s how. …” (List specific examples.)

ɧɧ

“Given the significant digital divide in the communities in our assessment area, we stepped up to help those
communities. We met with city officials and local nonprofits. … The description of our efforts is outlined
below. …”

II. Putting Our Leadership Role in Context
ɧɧ

“The White House and NTIA Broadband USA recognize that closing the digital divide is essential to every
area of community development, including educational attainment, workforce development small-business
development and access to financial services.”

ɧɧ

“Using the Public Welfare Investment authority to invest in broadband has not been used by financial institutions in our assessment area. The project (provide name) allowed us to demonstrate leadership in broadband
infrastructure investment. In (name) project, we used PWI authority to make an investment (amount) in a
fiber-optic infrastructure project and invoked the precedent set by the OCC in 2015 in approving the investment of First National Bank of Fairfax in the West Central Minnesota Fiber-Optic Cooperative.”

Closing the Digital Divide

A Framework for Meeting CRA Obligations

21

Federal Reserve Bank of Dallas

ɧɧ

“The initiative we funded in the amount of (provide amount) supports broadband adoption through an online
training program to promote workforce development and, specifically, digital skills to help LMI individuals
access living-wage jobs. The impact of the program is outlined below. …”

Financial institutions should touch base with their examiner throughout the planning and execution to ensure
they have the data needed to receive community development credit for their project(s). Banks should also
reassess the community development needs in their assessment area every 12 to 18 months and refresh their
plan on an ongoing basis.

rr Conclusion

Income and wealth inequality in the U.S. are at the highest levels since the Great Depression. The Federal Reserve’s 2014
Survey of Consumer Finances found that, “The top 3 percent account for 30.5 percent of all income and hold 54.4 percent
of all the net worth.”55 As noted by the Pew Research Center, “America’s upper-income families have a median net worth
that is nearly 70 times that of the country’s lower-income families, also the widest wealth gap between these families in 30
years.”56 As basic services and tools that are fundamental to upward mobility become increasingly digitized, the digital divide
creates a structural barrier to closing the income and wealth gaps. It creates a barrier to LMI individuals’ ability to move up
the economic ladder through education, workforce development programs and employment, entrepreneurship and access
to financial services.
By working with nonprofits and other local partners to bring broadband access and adoption to LMI
communities, banks can have a powerful impact on the very "infrastructure of opportunity"57 in this country.

This publication seeks to highlight best practices and “what works”58 to provide a roadmap for successful lending, service and investments to close the digital divide for LMI families and rural communities. Moreover, this framework provides
clear evidence of how investments in broadband can improve the lives of individuals and can help create an inclusive and
vibrant entrepreneurial economy.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

22

Federal Reserve Bank of Dallas

Appendixes
PART SIX
rr Appendix
diagram

3

A: Broadband Infrastructure Strategies

Strategies for Expansion of Broadband Connectivity Within Communities

Strategies for expansion

Network Architecture

Government-owned shared network

Last-mile fiber network

Utility cooperatives

– FTT* home

– FTT business

– FTT cabinet

– FTT curb

Middle-mile network
Broadband industrial park

Fixed-wireless network

University campus broadband network

– Small-cell neighborhood mesh system
– Wi-Fi neighborhood mesh system

Community Wi-Fi hotspots
Community fixed-wireless mesh hotspots
Public housing broadband network

Combined wired–wireless network

Public-private partnership network
*FTT is an acronym for "Fiber-to-the. …"
SOURCE: Federal Reserve Bank of Dallas.
diagram

4

Strategies for Deployment of New Broadband Networks Throughout a Community

Ownership model

Network architecture
Community-wide Fiber Network

Public-private partnership

– FTT* home

– FTT business

– FTT cabinet

– FTT curb

Community-wide fixed wireless network

Government-owned network

– Wi-Fi mesh network

– Municipal broadband projects

– Small cell mesh network

– Utility cooperatives

– Broadband backhaul
• Fiber
• Microwave

Privately-owned network

Combined wired–wireless network

– Google Fiber and others

*FTT is an acronym for "Fiber-to-the. …"
SOURCE: Federal Reserve Bank of Dallas.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

23

Federal Reserve Bank of Dallas

rr Appendix

B: Types of Affordability and Digital Inclusion Programs

This appendix includes lists affordability and digital inclusion programs that can be used to close the digital divide.

Affordability Programs
•

Grants for new or refurbished desktop computers and laptops

•

Computer manufacturer gift of desktop computers, tablets and laptops

•

Governmental agency gift of used desktop computers and laptops

•

University or nonprofit gift of refurbished desktop computers and laptops

•

School programs that grant students laptops

•

Municipal libraries that allow citizens to borrow laptops

•

School computer centers

•

Municipal library computer centers

•

Nonprofit technology centers with access to computers

Digital Inclusion Programs
•

City/school/nonprofit digital literacy programs—teach how to use a computer and navigate the internet

•

City/school/nonprofit financial literacy programs—teach basic concepts of personal financial management and

introduction to online banking
•

Boy Scouts of America Personal Management Merit Badge—six-month program that teaches the basics of

personal finances and budgeting, including opening and maintaining a checking account and online banking
•

School/university/nonprofit software coding training program

•

School/university/nonprofit computer refurbishing skills program

•

School/community college computer hardware and software technical skills certification and associate degree

programs

Closing the Digital Divide

A Framework for Meeting CRA Obligations

24

Federal Reserve Bank of Dallas

Corporation for Assigned Names and Numbers
(ICANN) activities

C: Experts in Closing the
Digital Divide (In Their Own Words)
rr Appendix

•

This appendix lists experts in closing the digital divide
and provides a synopsis of each entity’s activities in its own
words. The appendix information comes from the entities’
websites as of April 2016.
The appendix is not an all-inclusive list but includes
those that are well known and well documented. The Federal Reserve Bank of Dallas does not endorse these entities.

In addition to working with other executive branch
agencies to develop administration positions, NTIA represents the executive branch in both domestic and international telecommunications and information policy activities.
NTIA is also a leading source of research and data on the
status of broadband availability and adoption in America.

Department of Commerce, National Telecommunications and Information Administration
(NTIA)

NTIA Broadband USA

www.ntia.doc.gov/category/broadband-opportunity-council

www.ntia.doc.gov

The National Telecommunications and Information
Administration (NTIA), located within the Department
of Commerce, is the executive branch agency that is
principally responsible by law for advising the president on
telecommunications and information policy issues. NTIA’s
programs and policymaking focus largely on expanding
broadband internet access and adoption in America, expanding the use of spectrum by all users and ensuring that
the internet remains an engine for continued innovation
and economic growth. These goals are critical to America’s
competitiveness in the 21st century global economy and to
addressing many of the nation’s most pressing needs, such
as improving education, health care and public safety.
Specific NTIA activities include:
•

Managing the federal use of spectrum and identifying additional spectrum for commercial use

•

Administering grant programs that further the
deployment and use of broadband and other
technologies in America

•

Developing policy on issues related to the internet
economy, including online privacy, copyright
protection, cybersecurity and the global free flow
of information online

•

Promoting the stability and security of the internet’s domain name system through its participation
on behalf of the U.S. government in Internet

Closing the Digital Divide

A Framework for Meeting CRA Obligations

Performing cutting-edge telecommunications
research and engineering with both federal government and private-sector partners

Broadband USA is a U.S. Department of Commerce
NTIA program. NTIA developed BroadbandUSA in response
to public demand to provide assistance to communities
that want to expand their broadband capacity and promote
broadband adoption.
Broadband USA provides expert advice and fieldproven tools for assessing broadband adoption, planning
new infrastructure and engaging a wide range of partners
in broadband projects. Broadband USA knows each community is unique and no “one-size-fits-all” approach will
work.
BroadbandUSA brings stakeholders together to solve
problems, improve broadband policies, share best practices, connect communities to other federal agencies and
funding sources, and improve coordination among agencies.
BroadbandUSA works with stakeholders from local and
state government, federal agencies, policy organizations,
trade associations and the public to:

25

•

Provide online and in-person technical assistance
to communities as they consider how to improve
broadband access and use broadband more
effectively

•

Convene regional workshops to support decision-makers, based on best practices and lessons
learned from local communities

Federal Reserve Bank of Dallas

•

Publish guides and tools that provide communities
with proven solutions to problems in planning, 		
financing, construction and operations

•

Bring together federal agencies and broadband
stakeholder groups to promote interagency coordination, expand options for broadband funding and
ensure information and resources are getting to
communities quickly and effectively

These two questions have profound implications for
the American economy and society. America enjoys a
leadership position today in many aspects of the broadband
ecosystem because of investments made decades ago, just
as it enjoys a leadership position in research institutions
because of investments made in centuries past. That
leadership, however, will not go unchallenged. In a climate
of greater international competitiveness and constrained
public investment, leadership in both areas requires new
approaches if it is to be sustained.
To meet the dual needs of strengthening research
institutions and leadership in developing next-generation
applications, a group of leading research universities,
working in partnership with their local communities, came
together to form the University Community Next Generation Innovation Project (“the Project”).
The mission is simple: accelerate the deployment of
world-leading, next-generation networks in the United
States in a way that provides an opportunity to lead in the
next generation of ultra high-speed network services and
applications.
Through a request for information, the Project will
work with current and potential network service providers,
as well as others, to create a critical mass of next-generation test beds by accelerating the offering of ultra
high-speed network services to its communities. While
economic hurdles impede upgrading networks in all communities, those hurdles are smaller in university communities as they enjoy characteristics that both lower the cost
of deployment and increase demand, making them the
most attractive targets for initial next-generation network
deployments.
The Project will build on the foundation already in
place, such as organizing done through the Google Community Fiber initiative, to create an environment in which
private risk capital has sufficient incentives to provide
next-generation services. This effort will focus business
leadership and policymakers on a critical but often overlooked point: from both an economic and a policy perspective, a small amount of financial capital and political capital
focused on upgrading university communities can yield
major gains for both the future of America’s leadership in
research and for the American economic leadership.

President Obama on March 23, 2015, signed a presidential memorandum creating the Broadband Opportunity
Council and appointing the Commerce and Agriculture Departments as co-chairs. The Broadband Opportunity Council includes 25 federal agencies and departments that will
engage with industry and other stakeholders to understand
ways the executive branch can better support the needs of
communities seeking broadband investment. It will also help
identify regulatory barriers unduly impeding broadband
deployment, adoption or competition and recommend
steps to remove such barriers. On Sept. 21, 2015, the White
House released the council’s report, which includes action
items and milestones for each agency. BroadbandUSA will
support the council as it continues its work to monitor
implementation of the action items and explore additional
steps that can be taken to remove barriers to broadband
deployment and adoption.

The University Community Next Generation
Innovation Project (Gig.U)
www.gig-u.org
The University Community Next Generation Innovation
Project, or Gig.U, is a broad-based group of more than
30 leading research universities from across the United
States. Drawing on America’s rich history of community-led
innovation in research and entrepreneurship, Gig.U seeks to
accelerate the deployment of ultra high-speed networks to
leading U.S. universities and their surrounding communities.
How will America lead in developing the next generation of internet applications if other countries use more
advanced networks?
How will America’s research universities continue to
lead in international research if researchers, faculty and
students in other countries have access to far better tools?

Closing the Digital Divide

A Framework for Meeting CRA Obligations

26

Federal Reserve Bank of Dallas

The National Association of Telecommunications
Officers and Advisors (NATOA)
www.natoa.org/web
NATOA is the premier local government professional
association that provides support to its members on the
many local, state and federal communications laws, administrative rulings, judicial decisions and technology issues
impacting the interests of local governments.
Founded in 1980, NATOA offers a wide range of
advocacy services to individual and agency members representing cities, towns, counties and commissions across the
country. NATOA actively analyzes and addresses emerging
issues in areas such as:
•

Local government communications and internet
policy

•

Broadband planning best practices

•

Cable franchising

•

Operation of Public, Education and Government
(PEG) access channels

•

Wireless zoning

•

New technology initiatives and advancements

www.digitalinclusionalliance.org

•

Public broadband access

•

Locally trusted technology training and support

•

Build a national organization of local, regional and
national broadband adoption providers’ advocates
and individual supporters

•

Develop and empower a community of on-theground broadband adoption providers

•

Engage with affiliates and national partners to
develop or identify local, state and federal policies
that strengthen (financially and politically) local
broadband adoption programs

•

Keep affiliates informed about current and proposed local, state and federal policies that may
impact local broadband adoption programs

•

Engage with affiliates and national partners to
create new philanthropic and corporate digital 		
inclusion partnerships

•

Support the development of research and evaluation that can inform public policy and digital 		
inclusion programs

White House Connect America

The NDIA is a unified voice for local technology training, home broadband access and public broadband access
programs. It works collaboratively to craft, identify and
disseminate financial and operational resources for digital
inclusion programs while serving as a bridge to policymakers and the general public. The NDIA includes leaders of
local community organizations, public libraries, towns and
other institutions working hard to reduce digital disparities
among its neighbors. To improve the daily lives of all community members, the NDIA calls for digital inclusion public
policies that reflect its expertise and diverse experiences.
The NDIA’s approach is based on the knowledge that
broadband adoption is most effectively promoted by
community-driven efforts combining:

A Framework for Meeting CRA Obligations

Affordable home broadband service

The group’s purpose is to:

The National Digital Inclusion Alliance (NDIA)

Closing the Digital Divide

•

www.whitehouse.gov/connect-america
ConnectALL is a White House initiative to provide
Americans from every state and all income brackets not
only access to the internet, but also the tools to take full
advantage of it. On March 9, 2016, the Obama Administration submitted a recommendation that the FCC reform
a $1.5 billion per-year phone subsidy program and turn it
into a national broadband subsidy. In addition to this filing,
the administration also released a study on the economic
significance of broadband. Lastly, the administration set a
goal of connecting 20 million more Americans to broadband by 2020.
ConnectALL could be considered the second phase
of the earlier White House initiatives, ConnectED and
ConnectHome, which provided more than 20 million K–12

27

Federal Reserve Bank of Dallas

Schools, Health and Libraries Broadband (SHLB)
Coalition

students with broadband access in their classrooms and
libraries and provided 28 communities’ public housing units
with broadband access to enable students to do their online
homework at home.
Both of these initiatives shared the goal of providing
broadband access to Americans living without it, based on
research that found children who do not have broadband
access at home face a digital divide because they are placed
at an academic disadvantage in comparison with children
who do have access to broadband at home. ConnectALL
targets the much wider target demographic of LMI families
based on an issue brief by the Council of Economic Advisers
that outlines how adults, particularly job seekers, without
broadband access are disadvantaged because they are
unable to access online job search tools and otherwise participate in the internet economy. The ConnectALL initiative
seeks to accomplish its goal through several means:
•

First, it aims to increase the affordability of
broadband for low-income Americans through the
modernization of the FCC’s Lifeline program.

•

Second, it proposes the creation of a national service effort to deliver digital literacy skills through
the Corporation for National and Community
Service (CNCS), a federal agency, and the Institute
of Museum and Library Services (IMLS).

•

Third, it announced that the NTIA’s BroadbandUSA
program is launching the Community Connectivity
Initiative, which will create a comprehensive online
assessment tool to help community leaders identify
the broadband needs of their community and
connect them with expertise, tools and resources
to overcome their challenges.

•

Fourth, it also announced that Cox Communications will host more than 200 events across the
nation for low-income K–12 families to determine if
they qualify for a low-cost broadband option, and
will with partner with Univision to promote internet
adoption in several markets in the western U.S.

•

Lastly, it called on philanthropic support for digital

www.shlb.org
The SHLB Coalition promotes government policies and
programs that enable schools, libraries, health care providers and other anchor institutions and their communities
to obtain open, affordable, high-speed broadband connections to the internet.
The SHLB Coalition was created in 2009 in Washington,
D.C., to help address the shortage of adequate broadband
for anchor institutions and their communities. (“SHLB” is
pronounced “SHELL-bee.”) The SHLB Coalition is a broadbased organization of anchor institutions, commercial
companies and nonprofit broadband providers, foundations, public interest groups, and others that work together
to develop and support policies to improve broadband
connectivity for anchor institutions and their communities
in all regions of the country—urban, suburban and especially rural. The SHLB Coalition receives financial support
from membership dues, events and the Bill & Melinda Gates
Foundation.
The SHLB Coalition is founded on the belief that
deploying broadband networks to serve anchor institutions
is a cost-efficient and vitally important investment in the
nation’s future. Deploying broadband to anchor institutions can improve broadband access to millions of people
(students, low-income and elderly people, migrants, etc.)
who may not otherwise have access to the internet. Anchor
institution personnel can train people about broadband
services and technologies, thereby stimulating broadband
usage and demand. Furthermore, high-capacity middle-mile
broadband networks serving community anchor institutions
can be used as “jumping off points” to serve surrounding
residential and business consumers. Several studies show
that building high-capacity broadband for community
anchor institutions has a multiplier effect that generates
tremendous economic growth for the community and the
nation.
The SHLB Coalition urges policymakers at all levels
of government to develop and implement programs that
encourage broadband investment and enhance anchor
institutions’ ability to serve their communities through
broadband technologies.

inclusion at a summit focused on fulfilling the
initiative’s 2020 goal.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

28

Federal Reserve Bank of Dallas

Next Century Cities (NCC)

critical to involve and include multiple stakeholders
and perspectives to succeed, including businesses,
community organizations, residents, anchor institutions and others. Everyone in a community should
be able to access the internet on reasonable terms.

www.nextcenturycities.org
Next Century Cities supports community leaders across
the country as they seek to ensure that all have access to
fast, affordable and reliable internet.
Across the country, innovative municipalities are already recognizing the importance of leveraging gigabit-level
internet to attract new businesses and create jobs, improve
health care and education, and connect residents to new
opportunities. NCC is committed to celebrating these
successes, demonstrating their value and helping other
cities realize the full power of truly high-speed, affordable
and accessible broadband.
NCC believes there is no single pathway to a smart,
effective approach to next-generation broadband. What
matters is meaningful choice, dedicated leadership and
smart collaboration. Participating leaders and communities
are committed to the following principles:
•

High-Speed Internet Is Necessary Infrastructure:
Fast, reliable and affordable internet—at globally
competitive speeds—is no longer optional. Residents, schools, libraries and businesses require
next-generation connectivity to succeed.

•

The Internet Is Nonpartisan: Because the internet is
an essential resource for residents and businesses
in all communities, the provision of fast, reliable
and affordable internet transcends partisanship.
This collaboration welcomes leaders of all affiliations and beliefs who believe fast, reliable and
affordable high-speed internet access is essential to
secure America’s internet future.

•

Communities Must Enjoy Self-Determination:
Broadband solutions must align with community
needs—there is no perfect model that is universally
appropriate. Towns and cities should have the right
to consider all options—whether public, nonprofit,
corporate or some other hybrid—free from
interference.

•

High-Speed Internet Is a Communitywide Endeavor: Building effective next-generation networks
requires cooperation across communities. It is

Closing the Digital Divide

A Framework for Meeting CRA Obligations

29

•

Meaningful Competition Drives Progress: A vibrant,
diverse marketplace with transparency in offerings,
pricings and policies will spur innovation, increase
investment and lower prices. Communities, residents and businesses should have a meaningful
choice in providers.

•

Collaboration Benefits All: Innovative approaches
to broadband deployment present diverse challenges and opportunities to communities and
regions. Working together, cities can learn from the
experiences of others, lower costs and make the
best use of next-generation networks.

•

Elevating the Conversation: Cities that have
or would like to develop truly next-generation
networks are visionary cities, and their leaders
recognize what it takes to be competitive in the
21st century. NCC will work with these leaders and
their cities to make the case nationally and within
communities that next-generation internet is essential infrastructure that can deliver transformative
benefits to communities today.

•

Supporting Cities: Communities stepping into the
21st century through next-generation networks
face myriad challenges. It is essential to provide
crucial support to facilitate these innovative projects. NCC and its partners will work to assist each
other in overcoming obstacles to success.

•

Providing Tools for Success: Developing a next-generation network is a daunting task for a city of any
size. It is important that communities have access
to resources, advice and tools to develop effective
broadband internet networks. NCC is committed
to developing and aggregating resources to guide
incipient projects, as well as tools to help those
already equipped with this infrastructure better
leverage their networks to yield community
benefits.

Federal Reserve Bank of Dallas

Fiber to the Home Council Americas
(FTTH Council)

•

Helps rural residents buy or rent safe, affordable
housing and make health and safety repairs to their
homes.

•

Has a $212 billion portfolio of loans. It will administer $38 billion in loans, loan guarantees and grants
through its programs in the current fiscal year.

toolkit.ftthcouncil.org
Founded in 2001, the FTTH Council is a nonprofit
association consisting of companies and organizations that
deliver video, internet and/or voice services over high-bandwidth, next-generation, direct fiber-optic connections, as
well as companies that manufacture FTTH products and
others involved in planning and building FTTH networks.
The FTTH Council works to create a cohesive group to
share knowledge and build industry consensus on key issues
surrounding fiber to the home. Its mission is to accelerate
deployment of all-fiber access networks by demonstrating
how fiber-enabled applications and solutions create value
for service providers and their customers, promote economic development and enhance quality of life.

rr Appendix

Census Bureau
www.census.gov

American Community Survey data on computer and internet use is available for all regions of the U.S. In addition,
a collection of visualizations presents data from the Current
Population Survey and American Community Survey. The
infographic illustrates high-speed internet use by age, race,
income and educational attainment by household. In addition, maps are provided for household high-speed internet
use by state and metro area. See complete infographic
here: www.census.gov/library/visualizations/2016/comm/
digital_nation.html

United States Department of Agriculture Rural
Development (USDA RD), Community Connect
Grants
www.rd.usda.gov/programs-services/communityconnect-grants

Pew Research Center

The Community Connect Grant program helps fund
broadband deployment into rural communities where it is
not yet economically viable for private-sector providers to
deliver service.
Mission and history of USDA RD:
•

Offers loans, grants and loan guarantees to support essential services such as housing, economic
development, health care, first responder services
and equipment, and water, electric and communications infrastructure to rural communities.

•

Promotes economic development by supporting
loans to businesses through banks, credit unions
and community-managed lending pools. USDA RD
offers technical assistance and information to help
agricultural producers and cooperatives get started
and improve the effectiveness of their operations.

•

Provides technical assistance to help communities
undertake community empowerment programs.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

D: Additional Resources

www.pewinternet.org
Pew Research Center is a nonpartisan fact tank that
informs the public about the issues, attitudes and trends
shaping America and the world. It conducts public opinion
polling, demographic research, content analysis and other
data-driven social science research. The center does not
take policy positions.
Pew Research Center generates a foundation of facts
that enriches the public dialogue and supports sound
decision-making. The center is nonprofit, nonpartisan
and nonadvocacy, and it values independence, objectivity,
accuracy, rigor, humility, transparency and innovation.
Pew Research Center studies U.S. politics and policy;
journalism and media; internet, science and technology;
religion and public life; Hispanic trends; global attitudes and
trends; and U.S. social and demographic trends.
The center is committed to meeting the highest methodological standards and exploring the newest frontiers of
research.

30

Federal Reserve Bank of Dallas

Universal Service Administrative Corporation

“The Numbers Behind the Broadband ‘Homework Gap,’” by John B.
Horrigan, Pew Research Center, April 10, 2015,
www.pewresearch.org/fact-tank/2015/04/20/the-numbers-behind-thebroadband-homework-gap.
15
“Pathways to Financial Advancement: A Case Study,” by Wenhua
Di, Tammy Leonard and Emily Ryder, Federal Reserve Bank of Dallas,
Banking and Community Perspectives, no. 2, 2012, www.dallasfed.org/
assets/documents/cd/bcp/2012/bcp1202.pdf.
16
“51% of U.S. Adults Bank Online,” by Susannah Fox, Pew Research
Center, Aug. 7, 2013, www.pewinternet.org/2013/08/07/51-of-u-sadults-bank-online.
17
“Brick-and-Mortar Banking Remains Prevalent in an Increasingly Virtual
World,” FDIC Quarterly, 2015, vol. 9, no. 1.
18
“Consumers and Mobile Financial Services 2016,” Board of Governors
of the Federal Reserve System, www.federalreserve.gov/econresdata/
consumers-and-mobile-financial-services-report-201603.pdf.
19
“FDIC Report Shows Mobile Banking Can Help Underserved Consumers,” FDIC Press Release, May 25, 2016, announcing the release of the
paper, “Opportunities for Mobile Financial Services to Engage Underserved Consumers,” by Susan Burhouse, Benjamin Navarro and Yasmin
Osaki, May 25, 2016, www.fdic.gov/consumers/community/mobile/
MFS_Qualitative_Research_Report.pdf.
20
“8 Emerging Fintech Startups to Watch in 2016,” by Zoë Henry, Inc.,
Jan. 16, 2016,
www.inc.com/zoe-henry/8-emerging-fintech-startups-2016.html.
21
“5 C’s of Credit Analysis,” U.S. Department of Commerce Minority
Business Development Agency (blog),
www.mbda.gov/blogger/financial-education/5-c-s-credit-analysis.
22
See note 17.
23
“How Customers Interact with Their Banks,” by Daniela Yu and John H.
Fleming, Gallup Business Journal, May 7, 2013, www.gallup.com/
businessjournal/162107/customers-interact-banks.aspx.
24
“U.S. Smartphone Use in 2015,” by Aaron Smith, Pew Research Center,
April 1, 2015,
www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015.
25
“World Development Report 2016: Digital Dividends,” World Bank,
2016, Washington, D.C.: World Bank.
26
“Early Evidence Suggests Gigabit Broadband Drives GDP,” by David
Sosa, Analysis Group-Economic, Financial and Strategy Consultants,
2014, www.ftthcouncil.org/d/do/1686.
27
This is from the Blandin Foundation’s precis of the Boston Consulting
Group report, bcg.perspectives, www.bcgperspectives.com/content/
articles/media_entertainment_strategic_planning_4_2_trillion_
opportunity_internet_economy_g20.
28
See 2015 G20 website, www.g20.org.tr/about-g20/g20-members.
29
“Evolution of the Telecommunications Industry into the Internet
Age” by Martin Fransman, Communications and Strategies, DigiWorld
Publishing, no. 43.3, 2001, www.idate.org/fic/revue_telech/459/C&S43_
FRANSMAN.pdf.
30
“Digital Lenders Ditch Disrupting Banks to Partner with Them,” by
Zach Fox, SNL Finance, Dec. 22, 2015.
31
ConnectHome, U.S. Department of Housing and Urban Development,
connecthome.hud.gov.
32
“Unemployed Detroit Residents Are Trapped by a Digital Divide,” by
Cecilia Kang, The New York Times, May 22, 2016.
33
“FCC Releases First Details of Lifeline Broadband Program,”
Connected Nation Policy Brief, May 5, 2016,
www.connectednation.org/data-center-policy.
34
“HUD Proposes Rule Requiring Installation of Broadband Technology
During Construction of Most HUD-Financed Multifamily Housing,” Press
Release, May 17, 2016, U.S. Department of Housing and Urban Devel14

www.usac.org/default.aspx
The Universal Service Administrative Corp. (USAC) is
an independent, not-for-profit corporation designated by
the FCC as the administrator of universal service. The FCC
established USAC in 1997 to oversee the four programs created by the 1996 Telecom Act, which includes the universal
service Schools and Libraries (E-rate) program.
The E-rate program helps ensure that schools and
libraries can obtain high-speed internet access and telecommunications at affordable rates. The corporation’s website
has a detailed E-rate section, which explains the E-rate
application process in detail and provides all the necessary
forms to apply. Additionally, USAC regularly hosts conferences that teach potential applicants how to apply for the
program.
rr Notes
The Next Generation Network Connectivity Handbook: A Guide for
Community Leaders Seeking Affordable, Abundant Bandwidth, by Blair
Levin and Denise Linn, Benton Foundation, vol. 1.0, July 2015,
www.gig-u.org/cms/assets/uploads/2015/07/Val-NexGen_design_7.9_
v2.pdf.
2
Census Bureau, 2013 American Community Survey.
3
See note 2.
4
National Broadband Maps: How Connected Is My Community? U.S. Department of Commerce National Telecommunications and Information
Administration, www.broadbandmap.gov.
5
“Connecting America: The National Broadband Plan,” Federal Communications Commission, March 17, 2010. See reports in notes 25, 26 and
27 for more evidence of how broadband access and adoption impacts
economic growth.
6
2016 Broadband Progress Report, Federal Communications Commission, Jan. 29, 2016,
apps.fcc.gov/edocs_public/attachmatch/FCC-16-6A1.pdf.
7
“Understanding Online Job Ads Data: A Technical Report,” by Anthony
P. Carnevale, Tamara Jayasundera and Dimitri Repnikov, Georgetown
University, Center on Education and the Workforce, April 2004.
8
“Lack of Broadband Can be Key Obstacle, Especially for Job Seekers,”
by Aaron Smith, Pew Research Center, Dec. 28, 2015.
9
Future Edge. Get Ready for Tomorrow. Today, March 5, 2015,
www.capitaloneinvestingforgood.com/skills/future-edge-get-ready.
10
“Crunched by the Numbers: The Digital Skills Gap in the Workforce,”
Burning Glass Technologies, March 2015, www.burning-glass.com/
wp-content/uploads/2015/06/Digital_Skills_Gap.pdf.
11
See note 9.
12
"Computer and Internet Use in the United States: 2013; American
Community Survey Reports," by Thom File and Camille Ryan, Census
Bureau, Nov. 2014, www.census.gov/content/dam/Census/library/publications/2014/acs/acs-28.pdf.
13
“Bridging a Digital Divide That Leaves Schoolchildren Behind,” by
Cecilia Kang, The New York Times, Feb. 22, 2016.
1

Closing the Digital Divide

A Framework for Meeting CRA Obligations

31

Federal Reserve Bank of Dallas

opment, portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2016/HUDNo_16-074.
35
“Health and the Economy,” by Julio Frenk, Harvard International Review, June 14, 2014.
36
“Healthy Communities: A Framework for Meeting CRA Obligations,”
by Elizabeth Sobel Blum, Federal Reserve Bank of Dallas, March 2014,
www.dallasfed.org/assets/documents/cd/healthy/CRAframework.pdf.
37
Telemedicine: Opportunities and Developments in Member States,
Report on the Second Global Survey on eHealth, World Health Organization, Global Observatory for eHealth Series, vol. 2, 2010,
who.int/goe/publications/goe_telemedicine_2010.pdf.
38
For a discussion of health on the Texas Border region, see the health
section of “Las Colonias in the 21st Century: Progress Along the Texas–
Mexico Border,” by Jordana Barton, Emily Ryder Perlmeter, et.al, Federal Reserve Bank of Dallas, 2015, www.texascolonias.org.
39
Federal Health Information Technology Strategic Plan 2011­–2015,
Office of the National Coordinator for Health Information Technology,
www.healthit.gov/sites/default/files/utility/final-federal-health-itstrategic-plan-0911.pdf.
40
“Mobile App Streamlines Benefit Application Process,” In Touch, Texas
Health and Human Services Commission, 2015,
www.hhsc.state.tx.us/stakeholder/2015/jan-feb/2.shtml.
41
NTIA: Broadband Adoption Toolkit, U.S. Department of Commerce,
National Telecommunications and Information Administration, 2013,
www2.ntia.doc.gov/files/toolkit_042913.pdf.
42
“Community-Based Broadband Solutions,” The White House, January
2015, www.whitehouse.gov/sites/default/files/docs/community-based_
broadband_report_by_executive_office_of_the_president.pdf; The Next
Generation Network Connectivity Handbook: A Guide for Community
Leaders Seeking Affordable, Abundant Bandwidth, by Blair Levin and
Denise Linn, Benton Foundation, vol. 1.0, July 2015, www.gig-u.org/
cms/assets/uploads/2015/07/Val-NexGen_design_7.9_v2.pdf; “BroadbandUSA: An Introduction to Effective Public-Private Partnerships for
Broadband Investments,” U.S. Department of Commerce, National
Telecommunications and Information Administration, 2015, www2.ntia.
doc.gov/files/ntia_ppp_010515.pdf.
43
For first 3 definitions, see page 62 of the report identified in note 1.
44
“Broadband Technology Opportunities Program Glossary of Terms—
January 2010,” National Telecommunications & Information Administration, Broadband USA, www.ntia.doc.gov/legacy/broadbandgrants/
guidance/Glossary_01-29-10_v6.pdf.
45
See note 1.
46
See note 41.
47
Money Smart KC, www.moneysmartkc.org, was created by the FDIC in
cooperation with the Federal Reserve Bank of Kansas City, Central Bank
of Kansas City, CHES Inc., Sturges Word and Commerce Bank.
48”
Las Colonias in the 21st Century: Progress Along the Texas–Mexico
Border,” by Jordana Barton, Emily Ryder Perlmeter, et.al, Federal Reserve Bank of Dallas, 2015, www.texascolonias.org.
49
“Google Fiber Huntsville Deal Could Remake the Broadband Market,”
by Blair Levin, Brookings Institution, Broadband Communities, March/
April 2016, www.bbcmag.com/2016mags/Mar_Apr/BBC_Mar16_
GoogleFiberHuntsville.pdf.
50
Lucile Packard Foundation on Children’s Health, www.kidsdata.org/
region/1087/coachella-valley-unified/summary#6/demographics.
51
“Wi-Fi on Wheels Puts Two Districts on the Fast Track to 24/7 Access,”
by Bridget McCrea, The Journal, April 30, 2015,

www.thejournal.com/articles/2015/04/30/wifi-on-wheels.aspx.
52
“Wi-Fi Enabled School Buses Leave No Child Offline,” PBS NewsHour,
www.pbs.org/newshour/bb/wi-fi-enabled-school-buses-leave-no-childoffline.
53
For more information about the collective impact model, see “Collective Impact” by John Kania and Mark Kramer, Stanford Social Innovation
Review, Winter 2011, pp. 36–41, www.ssireview.org/images/
articles/2011_WI_Feature_Kania.pdf.
54
New Markets Tax Credit Program 2015 Application FAQs (updated November 9, 2015), U.S. Department of the Treasury, Community Development Financial Institution Fund, www.cdfifund.gov/Documents/2015%20
NMTC%20Application%20QA%20FINAL.pdf.
55
2013 Survey of Consumer Finances, Board of Governors of the Federal
Reserve System, www.federalreserve.gov/econresdata/scf/scfindex.htm.
56
“America’s Wealth Gap Between Middle-Income and Upper-Income
Families Is the Widest on Record,” Richard Fry and Rakesh Kochhar, Fact
Tank, Pew Research Center, Dec. 17, 2014,
www.pewresearch.org/fact-tank/2014/12/17/wealth-gap-upper-middleincome.
57
The term "infrastructure of opportunity" has been used widely, for
example, in "State of the South: Building an Infrastructure of Opportunitiy for the Next Generation," MDC, Durham, N.C., 2014, www.
stateofthesouth.org. And according to Texas Public Radio, the term is
attributed to Rep. Joaquin Castro. See "Castro Promotes 'Infrastructure of Opportunity' at Town Halls," by Eileen Pace, Texas Public Radio
Morning Edition, Aug. 30, 2013, www.tpr.org.
58
This term reflects the name of the publication, Investing in What Works
for America’s Communities: Essays on People, Place and Purpose, Nancy
O. Andrews and David Erickson, eds., San Francisco: Federal Reserve
Bank of San Francisco and Low Income Investment Fund, 2012. This
publication gives case studies of best practices in community and economic development. For details, see www.whatworksforamerica.org.

rr Acknowledgements

I would like to extend my thanks to the residents of the
Texas–Mexico border who participated in the focus groups
for the Dallas Fed’s report “Las Colonias in the 21st Century: Progress Along the Texas–Mexico Border.” It was their
testimonials describing the impact of a lack of broadband
access that made it clear to me we needed to find a solution
to the digital divide. We formed a coalition of stakeholders
in the region, Digital Opportunity for the Rio Grande Valley
(DO4RGV), to explore the issue and devise a plan. A special
thanks to Dr. Daniel King, superintendent of Pharr–San
Juan–Alamo Independent School District, Pharr Mayor Dr.
Ambrosio Hernandez, Maria Vasquez of ACT and leaders of
the DO4RGV demonstration project, whose deep commitment to the people of South Texas and vision for the region
is a model and inspiration to the group.

The views expressed are those of the author and should not be attributed to the
Federal Reserve Bank of Dallas or the Federal Reserve System.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

32

Federal Reserve Bank of Dallas

We were engaged in this conversation in South Texas
just as the U.S. Department of Housing and Urban Development (HUD) was kicking off its ConnectHome program.
Many thanks to Robbie Greenblum, senior policy adviser to
Secretary Julián Castro at HUD, who learned of our efforts
and invited me to a ConnectHome summit that convened a
group of people from across the country working to close
the digital divide. I was fortunate to become part of this
learning community engaged in the deployment of broadband technology and digital inclusion programs.
This community includes Gabriel Garcia, director and
senior counsel at CPS Energy and president of the Texas
Association of Telecommunications Officers and Advisors
(TATOA), who provided patient guidance and shared his
immense knowledge with me and DO4RGV. The TATOA
interns, Giovanna Valverde, Munirih Jester and Catherine
Barton, all from the University of Texas at San Antonio,
also offered their assistance with DO4RGV. Other leaders
in the field who generously helped guide us are Joanne
Hovis of CTC Technology and Deb Socia of Next Century
Cities. The 2016 Broadband Communities Summit (Austin)
and National Digital Inclusion Alliance (NDIA) Net Inclusion
Summit (Kansas City) also brought together leaders who
helped me understand the best practices in the field.
The Dallas Fed is committed to mentoring the next
generation of leaders in community development and
financial services through our internship program. I would
like to acknowledge the creative and hardworking community development interns for their assistance in the process
of producing this publication and implementing DO4RGV:
Fabiola Urgel from the University of Texas Rio Grande Valley
(2015) and Lorenzo Garcia from the University of Texas at
San Antonio (2016).

rr About

the Author

Jordana Barton, senior advisor for Community Development at the Federal Reserve Bank of Dallas, San Antonio
Branch, supports the Federal Reserve System’s economic
growth objectives by promoting community and economic
development and fair and impartial access to credit. Her
focus areas include the Community Reinvestment Act, community development finance, financial education, affordable
housing, workforce development, healthy communities and
micro- and small-business development. She is lead author
of the 2015 Dallas Fed report “Las Colonias in the 21st
Century: Progress Along the Texas–Mexico Border.”
Prior to joining the Federal Reserve, Barton served
as vice president for community development banking at
Capital One Bank. In this role, she built community partnerships and managed investments to promote economic
revitalization and access to financial services in low- and
moderate-income communities. In 2012, she was awarded
the Federal Deposit Insurance Corp.’s Pioneer Award in
Community Development, and Capital One was named
Corporate Philanthropist of the Year in San Antonio by the
Association of Fundraising Professionals.
Barton also served as vice president for development
and communications for the microenterprise/small-business organization Accion Texas (now LiftFund). She was a
member of the leadership team when the organization won
the NEXT Award for Opportunity Finance from the MacArthur Foundation, Wells Fargo and the Opportunity Finance
Network in 2007.
Barton grew up in Benavides, Texas, near the
Texas–Mexico border. She holds an MPA from Harvard
University’s John F. Kennedy School of Government.

The cover and publication design of Closing the
Digital Divide: A Framework for Meeting CRA Obligations were created by Lorenzo Z. Garcia, Community
Development intern of the Federal Reserve Bank of
Dallas, San Antonio Branch, and produced by the
Communications and Outreach Department of the
Federal Reserve Bank of Dallas, 2200 N. Pearl St.,
Dallas, TX 75201-2216.

Closing the Digital Divide

A Framework for Meeting CRA Obligations

33

Federal Reserve Bank of Dallas