Helping distressed communities like Puerto Rico can boost banks' bottom line
On the morning of Sept. 20, my family and friends in Puerto Rico were bracing for what was the first Category 4 cyclone to hit the island since 1932. Just days before that, I was on the ground there and committed to doing all that I could to build financial capability in communities across Puerto Rico, including my father’s small town of Orocovis. The island is still trying desperately to reflect, recover and rebuild.
I am incredibly proud of the progress that we’ve made in Puerto Rico, and the banks who have offered lending and money for aid. Disaster responses reveal what banks are made of, helping people with immediate needs while legitimizing their brand as community partners. But there is still danger on the horizon.
Puerto Rico is “plagued with deep, persistent poverty, saddled with debt and suffering from import burdens,” according to Abby Maxman, president and CEO of Oxfam America. She believes we need leaders to “bring sustainable positive change by investing in local resources and supporting community partnerships.” Otherwise, even after necessary aid, communities like Puerto Rico may fall again, she argues — and I agree. Tackling intractable issues, especially in the wake of disaster, is where banks have the potential to play a major, lasting role.
We in the financial services community can help Puerto Rico. And there’s a strong business case for doing so. For my part, financial capability can bring sustainable, positive change to struggling communities. Research shows that education revitalizes both poverty-stricken communities and those struck by disaster. I am committed to helping communities like Puerto Rico achieve financial capability and restore stability.
For financial institutions, the OCC, FDIC, and Federal Reserve have confirmed that they will give favorable CRA credit to any bank that revitalizes or stabilizes communities impacted by Hurricane Maria. Community development activities run the gamut from attracting new customers and retaining existing ones to financing local businesses and affordable housing and assisting displaced individuals. Financing, counseling and investing are core to what banks do.
Research shows that in many cases doing good — what’s known as corporate social responsibility or corporate philanthropy — is also good for the bottom line. It has helped companies gain a competitive advantage over competitors because it makes them stand out.
JPMorgan Chase, for example, recently committed $1.75 billion to provide community investments across the country, recognizing that philanthropy is “good for business.” Helping out is also good for a bank’s brand and reputation, and forming positive relationships in communities has been found to decrease the costs and risks of doing business over time. Likewise, I believe helping Puerto Rico rebuild sustainable communities will benefit both citizens’ lives and banks’ continued success.
I am hopeful for Puerto Rico. Not just because I share the island’s heritage of strength and perseverance, but because I have seen banks do incredible things for their communities. Creating a sustainable foundation for Puerto Rico can help us, too.