Nebraska has historically been blessed with a very stable and resilient economy. Unemployment rates are well below the national average, per capita incomes are growing, the economy is highly diversified and exports are robust. Despite this extraordinary economic success, there are several counties and census tracts across the state that have not experienced the same level of economic prosperity. Significant efforts are underway at both the state and community levels to plan for and implement transformative changes aimed at improving the economic foundation of these economically disadvantaged areas. As community and statewide leaders, bankers will play a key role in these efforts.
The U.S. Department of Housing and Urban Development identifies 68 census tracts in 11 Nebraska counties where at least half of the households have incomes below 60% of the Area Median Gross Income or a poverty rate of more than 25%. Instinctively, we also know that every city and county in our state has both visible and invisible pockets of poverty that need increased attention.
In addition, several of Nebraska’s low-income areas are home to large concentrations of Nebraska’s Black and Brown citizens. Data recently released by the Federal Home Loan Bank of Chicago indicates that Nebraska has 46 census tracts defined as 2022 Low-Income Minority Areas. These census tracts are in eight Nebraska counties.
While the history and characteristics of these low-income regions are varied, they often share similar characteristics:
- Lower educational attainment rates
- Lack of financial understanding (financial literacy)
- Higher-than-average incarceration rates
- Below-average home ownership levels
- Limited career opportunities
- Inadequate small business and entrepreneurial opportunities
- Inexperience in navigating economic and political systems
- Language and cultural barriers (i.e., distrust of banks)
- An estimated higher percentage of unbanked and underbanked residents
Unfortunately, public policy and economic development strategies designed to improve these high-poverty areas often become political footballs. During the most recent session of the Nebraska Legislature, state senators approved American Rescue Plan Act federal expenditures of over $330 million to support generational and transformative change in low-income regions across the state, with a focus on Black and Brown communities. The legislative steering committee in charge of shepherding these community investments has engaged a consulting firm to offer guidance and has hosted numerous town halls and focus groups to discuss possible investments and priorities.
Nebraska banks are at the forefront of efforts to combat poverty in their communities. In any given year, Nebraska banks make millions of dollars in community investments and support important economic development programs focused on small businesses, including micro-lending and entrepreneurial technical assistance. Our industry is also directly involved in facilitating access to affordable housing through a myriad of public housing initiatives, including the low-income housing tax credit program. Nebraska banks also actively promote financial literacy and first-time homebuyer training. Many individuals from low-income backgrounds have also taken advantage of career opportunities in banking to improve their economic situation.
Moving forward, your NBA government relations team will remain active in discussions surrounding the ARPA fund distributions, with a focus on strategies and investments with the greatest long-term economic impact. We will also work closely on public policy to ensure poverty reduction strategies are implemented statewide. Finally, we will continue to seek member input and focus on additional efforts the banking industry can make to decrease the poverty level and increase incomes among our fellow Nebraskans. We all share the same goal of enhancing economic opportunities for all Nebraskans. Your feedback and insights around this prominent issue are especially valuable. Please feel free to reach out to any of our team members to share your thoughts and ideas.
