The financial capital of a community is made up of the financial resources available to invest in community capacity building, to underwrite business development, to support entrepreneurship, and to accumulate wealth for future community development (Green & Haines, 2015).
The Stowe, VT community has considerable access to local financial capital. Presently, there are not any specifically designated alternative credit institutions. However, In 1977, the federal Community Reinvestment Act (CRA) was enacted to encourage regulated deposit-taking institutions to extend credit to low-and moderate-income communities The CRA rates a bank’s compliance with its regulations and assigns one of the following ratings: Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance. The local community bank (Peoples United Bank) has earned a rating of “outstanding” since its’ inception (People’s Reinvestment).
Stowe, VT is a community with a diverse set of household incomes. The U.S. Department of Housing & Urban Development defines an income 80% of the median as low and an income 140% of the median as moderate (U.S Dept.). The median household income in Stowe is $66,479; therefore 16.7% of Stowe’s households are low-income homes while 13.85% are moderate (American Fact Finder).
As we discussed in class, a key question that community development specialists need to address when dealing with financial capital in a community is “are underrepresented individuals able to access credit locally? The CRA rating of outstanding provides the answer, yes residents of Stowe are able to access needed credit. However Morrisville, a community 5 minutes from Stowe does not have the same access to credit and therefore organizations such as the Community Capital of Vermont, statewide small business and microenterprise lender serving low and moderate-income entrepreneurs step in to fill the void. In Morrisville, The CCV has sponsored development of the Mother & Daughter led Cake & Crumb Bakery by providing debt financing (CCV).
Cake & Crumb Owners: Mother & Daughter
Green, G. P., & Haines, A. (2012). Asset Building & Community Development. Los Angeles, Calif.: SAGE.
Community Reinvestment. (n.d.). Retrieved November 10, 2016, from https://www.peoples.com/peoples/Footer/About-People’s-United/In-The-Community/Community-Reinvestment#cra
Low and Moderate Income Definitions. (n.d.). Retrieved November 10, 2016, from http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/communitydevelopment/rulesandregs/memoranda/lmidef84
Data Access and Dissemination Systems (DADS). (n.d.). American FactFinder – Community Facts. Retrieved November 10, 2016, from http://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml
Investing in Entrepreneurs Statewide. (n.d.). Retrieved November 10, 2016, from http://s3.amazonaws.com/uploads.knightlab.com/storymapjs/b643f36e9948696c92aec861f01a2bcd/on-investing-community-capital-of-vermontrepreneurs/index.html