Local banks step up in the fight to keep Covid-19 economic calamity at bay

In the wake of Hurricane Sandy, necessity has bred an interesting kind of financial invention for the New York MTA: the world’s first “catastrophe” bond - a reinsurance for the insurer - designed to protect public transportation infrastructure, specifically against storm surge. These bonds privatize risk for public gain, creating a kind of tool that may protect economic development against all kinds of natural and man-made disasters around the world.

Too often socially useful businesses end up failing because they get ahead of themselves and end up not being profitable. Companies now can select from an 'opportunity map' of ventures that serve the poorest individuals, and are more likely to be profitable and sustainable.

A collaborative funding organization called the Runway Project gives loans to primarily Black entrepreneurs in the Oakland area. The initiative aims to address racial disparities in startup capital by reducing the financial risk of starting a business. The program also includes personalized support as a "wrap around" approach to the lending process.

As colleges and universities across the United States have shifted to online classes and shut down their campuses, not every student simply has the ability to move home. To help support these students, many of whom are low-income or international, the Stay Together Appalachian Youth Project began working with local communities to find housing for displaced students, as well as to provide other support like money or supplies.

Europe's generous social policies, such as allowing employees to retain their salaries while taking sick time to care for themselves or family members, may help to mitigate the coronavirus outbreak while also safeguarding the economy. Although the long-term impacts are yet unknown, in the short term, government-provided incentives are helping people and businesses stay afloat.

As the U.S attempts to reopen, restaurant owners from California to Florida are expanding their restaurants into nearby outdoor space, including sidewalks and parking lots. In doing so, they are able to offer patrons a safer dining environment, as there is more room to keep tables further apart and follow social distancing precautions, and it also helps restaurants earn more revenue than if they were limited to indoor space. Some city governments are streamlining the process, including Brookhaven, Georgia, which made it free to access short-term permits for outdoor dining.

Black banks have been held up by leaders and celebrities in the community as a way to end Black poverty. Previous efforts have been made in the 1960s when Black banks gave loans to community members after being denied home loans from white banks. But those loans lost money when housing values declined as a result of redlining policies that damaged public schools. Black banking therefore was not the answer to ending Black poverty and bridging the gap between white and black wealth. One law professor believes the answer lies in public banking which is funded by tax revenue and acts as a public utility.

Comal Heritage Food Incubator trains immigrant and refugee women to start their own businesses in the food industry. Comal offers coaching, financial support, and connections to social services. It also pays trainees, which has been vital to endure the food industry shutdowns during the Covid-19 pandemic. The group also ensures members have food, rent assistance, school supplies, or diapers for their children. They partner with the Denver Metro Emergency Food Network, delivering about 290,000 meals since the pandemic began. The model is working in other cities, including Seattle and San Francisco.

The CARES Act was meant to help small businesses, including hospitals, find financial stability during the coronavirus pandemic, but confusing guidelines and a lack of oversight have impeded the success. This reality has been especially difficult for rural hospitals, some of which "have left millions in relief aid untouched, spiraling deeper into debt for fear that the wrong decision could force them to return money."

Four years before the pandemic caused unemployment compensation claims to spike, South Carolina took advantage of a federal grant to modernize its claims processing systems. That upgrade saved thousands of hours of time once claims rose sharply, which meant that people making legitimate claims got paid relatively quickly. That stands in contrast with the Virginia Employment Commission's huge backlog, which must be run through a decades-old system. The state was finally upgrading its systems when the pandemic put that work on hold, leaving some laid-off people in financial limbo for several months.