'It's About Access to Credit': Lessons From a Life in Community Lending

Donna Gambrell spent the years following the meltdown of the American housing market at the helm of a Treasury Department fund that makes loans to a small but important part of the financial system. They’re called Community Development Financial Institutions – or CDFIs -- specialized lenders that provide affordable capital, credit and financial services to low-wealth, low-income communities. 

She was invited to Indianapolis by the Indianapolis Neighborhood Housing Partnership, and during a visit to WFYI, Gambrell told us that she first learned about money the way most of us do -- from her family. Here's an edited transcript of our conversation:

DG: My father never had a checking account. He never had a savings account. He was very much reluctant to go into financial institutions. My father loved going down to the corner grocery store to buy money orders, and that is how he paid his bills. So I grew up without a real good appreciation of money management, of budgeting. We weren’t always in dire straits, but they (my parents) came from very humble roots, and they struggled financially most of their lives. I think in many ways I learned from watching them and saying ‘there’ve got to be some other options and alternatives.’ Maybe there’s some psychological reason why I ended up in a bank regulatory environment.

WFYI: I was wondering about that – about how early lessons affected the trajectory of your professional career.

DG: Absolutely. It’s about access to credit, and what I saw was that there was a whole population that had been shut out of that and really didn’t understand how to get their foot in the door. And that’s always fascinated me.

WFYI: And that was a lot of your work at the FDIC. (Gambrell was Deputy Director of Consumer Protection at the Federal Deposit Insurance Corporation – FDIC – and in that role managed initiatives related to reaching underserved populations and consumer education programs on issues such as identity theft, subprime and predatory lending and credit card debt.)

DG: Correct. Especially financial education. We were focused on low- and moderate-income populations in particular, so we worked with financial institutions and credit unions and community development corporations to bring people into the financial mainstream – bringing them in, and keeping them there.

WFYI: Then in 2007, 2008 we had this huge disruption in the American economy that was driven by subprime lending.

DG: And you saw the impact of what happened to so many homeowners who were forced to leave their homes, lose their homes to foreclosure. But in an interesting way it’s also been a good lesson learned – I hope – about how lending can and should be done responsibly.

WFYI: You’re in Indianapolis to give the keynote address to the Indianapolis Neighborhood Housing Partnership. What are some of this community’s assets and challenges when it comes to housing and neighborhood development?

DG: Indianapolis is a great place where you see collaboration happening in a very effective way. You’ve got for-profit and non-profit. You’ve got financial institutions, the chamber, corporations and other organizations all coming together and looking at a community development strategy. What Indianapolis does really well is to make sure that the community’s voice is heard, but the community is often taking the lead and saying ‘this is what our needs are.’ The challenge always is going to be making sure that housing is affordable and that there’s sufficient housing for everyone, especially for those people who want to be homeowners.

From 2007 to 2013, Donna Gambrell was the director of the Community Development Financial Institution Fund at the U.S. Treasury and a former deputy director of the FDIC.