Bernanke Calls For More Lending In Poor Neighborhoods

April 29, 2011

Federal Reserve Chairman Ben Bernanke called for more lending to small businesses and people in lower-income neighborhoods on Friday, saying they'd been hurt disproportionally by the recession.Bernanke, speaking at a conference on community development in Arlington, Virginia, said many of the country's poorest communities had been struggling before the downturn, and things have only gotten worse.The "Great Recession" officially ended almost two years ago, and the national economy is growing at a moderate pace, but for many poor and working-class Americans the current economic climate feels nothing like a recovery.Unemployment remains stubbornly high, and job creation is improving at a seemingly glacial pace."Our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind," Bernanke said.Lending to creditworthy people and small businesses in troubled communities can stimulate economic activity in these depressed areas that would generate local tax revenues.Higher tax revenues for the local municipality could then be spent redeveloping vacant properties, providing job training, or on other development programs. That leads back into more hiring and paychecks that can help poor homeowners avoid foreclosure.