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FEDERAL DEPOSIT INSURANCE CORPORATION

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ADVISORY COMMITTEE ON ECONOMIC INCLUSION

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MEETING

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THURSDAY

OCTOBER 22, 2020

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The Advisory Committee convened at

1:00 p.m. EDT via Videoteleconference, Jelena

McWilliams, Chairman, presiding.

PRESENT:

MICHAEL S. BARR, Dean, Ford School of Public

Policy, University of Michigan Law School

RAPHAEL BOSTIC, President and CEO, Federal

Reserve Bank of Atlanta

NAOMI CAMPER, Chief Policy Officer, American

Bankers Association

JOSÉ CISNEROS, Treasurer, City and County of San

Francisco

MARTIN EAKES, Chief Executive Officer, Self-Help

Credit Union

MAURICE JONES, President and CEO, Local

Initiatives Support Corporation (LISC)

MARGARET LIBBY, President, MyPath

ALDEN J. MCDONALD, JR., President and CEO,

Liberty Bank and Trust Company

LISA MENSAH, President and CEO, Opportunity

Finance Network

JONATHAN MINTZ, President and CEO, Cities for

Financial Empowerment Fund

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PAMELA PATENAUDE, Former Deputy Secretary, U.S. 

 Department of Housing and Urban Development

JENNIFER TESCHER, President and CEO, Financial

 Health Network

CHRISTINA TETREAULT, Manager, Financial Policy,

 Consumer Reports

ALSO PRESENT:

JELENA McWILLIAMS, Chairman, FDIC

MARTIN GRUENBERG, Board of Directors, FDIC

JASON BROWN, Assistant Director, Office of

 Research, Consumer Financial Protection

 Bureau

KARYEN CHU, Chief, Banking and Consumer Research,

 FDIC Division of Insurance and Research

KEITH ERNST, Associate Director, FDIC Division of

 Depositor and Consumer Protection

FIONA GREIG, Managing Director and Director of

 Consumer Research, JPMorgan Chase Institute

KEVIN KLOWDEN, Executive Director, Center for

 Regional Economics and California Center,

 Milken Institute

MARK KUTZBACH, Senior Financial Economist, FDIC

 Division of Insurance and Research

ROB LEVY, Vice President of Research and

 Measurement, Financial Health Network

JONATHAN MILLER, Deputy Director, FDIC Division

 of Depositor and Consumer Protection

NIKITA PEARSON, Acting Director, FDIC Office of

 Minority and Women Inclusion (OMWI)

BETTY RUDOLPH, FDIC National Director of Minority

 Depository Institution (MDI) and Community

 Development Banking

JEFFREY WEINSTEIN, Senior Financial Economist,

 FDIC Division of Insurance and Research

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KANAV BHAGAT, Managing Director of Financial

 Markets Research, JPMorgan Chase Institute

LARIECE BROWN, Quantitative Analytics Director,

 Freddie Mac

KELLY COCHRAN, Deputy Director, FinRegLab

KATY DAVIS, Managing Director, ideas42

AMELIA ERWITT, Managing Director, Cities for

 Financial Empowerment Fund

LINDSAY FERGUSON, Director of Strategic

 Engagement for America Saves, Consumer

 Federation of America

RYAN GOODSTEIN, Senior Economist, FDIC DCP

JASON GROSS, CEO and Co-Founder, Petal

EMERSON HALL, Associate Director, FDIC DCP

DANIEL NESTEL, Senior Director of Government

 Relations, FICO

MARK PEARCE, Director, FDIC DCP

LAUREN SAUNDERS, Associate Director, National

 Consumer Law Center

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 CONTENTS

Opening Remarks. . . . . . . . . . . . . . . . . . 6

Members Roundtable . . . . . . . . . . . . . . . . 9

2019 FDIC Survey Results:

How America Banks. . . . . . . . . . . . . . . . .74

The Financial Status and Health of American

Households During the COVID Crisis . . . . . . . 120

Program Overviews. . . . . . . . . . . . . . . . 182

Closing Remarks. . . . . . . . . . . . . . . . . 205

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1 P-R-O-C-E-E-D-I-N-G-S

2 1:04 p.m.

3 MR. MILLER: Good afternoon,

4 everybody. Welcome. I know we're maybe having

5 -- Madam Chairwoman, can you hear me?

6 CHAIRMAN MCWILLIAMS: Yes, we can hear

7 you.

8 MR. MILLER: It's Jonathan.

9 CHAIRMAN MCWILLIAMS: Cutting up a

10 little bit, but we can hear you.

11 MR. MILLER: Now I see you. Can you

12 see me?

13 CHAIRMAN MCWILLIAMS: This is like the

14 Verizon commercial now. Now I can see you. I

15 could be Jonathan with an accent. All right,

16 we'll having a little bit of a technical issue

17 with Jonathan's mic, so I will go ahead and get

18 us started --

19 (Simultaneous speaking.) 

20 CHAIRMAN MCWILLIAMS: Welcome --

21 MR. MILLER: Can you hear me? Can you

22 hear me now?

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1 CHAIRMAN MCWILLIAMS: Yes, we can.

2 MR. MILLER: I'm sorry; we're doing my

3 sound through my phone, instead of the computer. 

4 Let me just welcome everybody. Apologize for the

5 difficulties with the technology. Welcome,

6 everybody, to the Committee on Economic Inclusion

7 meeting. We have a very tight time table today,

8 and a lot of information to get through, a lot of

9 good stuff to get through, so let me turn it over

10 to the chairman to get us started. Thank you so

11 much, Jelena.

12 CHAIRMAN MCWILLIAMS: Thank you,

13 Jonathan, and thank you, everybody, for joining

14 us today. I will say welcome to 2020, where

15 nothing is going as it's supposed to go,

16 including the technical difficulties at the FDIC.

17 I want to thank you all for taking the

18 time, and I want to apologize that we have not

19 been able to convene this important committee

20 sooner. Frankly, we have been thinking that we

21 would be able to do this in person and have you

22 here for a constructive in-person discussion, but

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1 the pandemic ended up taking a long time.

2 We kept on moving the dates in, I

3 would say, at this point, disappointing hope that

4 we would be in person. Thank you for joining us

5 virtually. Thank you for being willing to give

6 us your time. I cannot think of a better time to

7 discuss the issues that are going to affect low

8 and moderate income community and for financial

9 inclusion than what's going on right now with

10 enormous job loss in the wage labor market and

11 also among the communities of color. Thank you

12 for being willing to engage with us on those

13 topics. We have some new members to announce

14 today. I will read their names.

15 We have Naomi Camper, chief policy

16 officer of the American Bankers Association, ABA. 

17 We have Lisa Mensah, president and CEO of the

18 Opportunity Finance Network, OFN, Jennifer

19 Tescher, president and CEO of the Financial

20 Health Network, FHN, and Christina Tetreault,

21 senior policy counsel at Consumer Reports.

22 Thank you all for joining us. We're

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1 only beefing up the Panel with more expertise in

2 this area and with people who are truly out there

3 on the front lines of trying to make sure that

4 the issues with which this Committee deals with

5 are affecting communities in the right way. With

6 that, I will turn it back to you, Jonathan. I

7 really look forward to an engaging discussion

8 today.

9 MR. MILLER: Thank you very much. 

10 Thank you very much, everybody. We begin today's

11 meeting with our members roundtable. We've asked

12 each member of the Committee to describe,

13 briefly, a challenge or an issue they may be

14 facing in their communities or in their

15 organizations. As I mentioned, we're asking

16 people to stay strictly to the six minutes. 

17 Michael Barr, let me start with you, please.

18 CHAIRMAN MCWILLIAMS: Jonathan, can we

19 just take a second -- I'm sure Michael won't

20 object. Marty, would like you to make opening

21 comments, as well, please?

22 DIRECTOR GRUENBERG: Well, just to say

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1 welcome to everyone. Thank you for taking the

2 time. Good to see you, even if it's virtual.

3 I can't help but be struck that the

4 focus of our attention today around access to the

5 banking system particularly impacts the people

6 most severely and disproportionately impacted by

7 the current pandemic and economic crisis.

8 It did strike me that our discussion

9 today really may have broader implications beyond

10 the particular issue of the focus of this

11 committee. Particularly timely and helpful to

12 have you all here today and very much look

13 forward to the discussion. Thank you, Jelena.

14 CHAIRMAN MCWILLIAMS: Thank you,

15 Martin. Sorry, Jonathan and Michael, to

16 interrupt. Please go ahead.

17 MR. MILLER: Thank you. Michael,

18 unmute and start your video.

19 MEMBER BARR: I hope that everybody

20 can see and hear me at this point. It's great to

21 be here. Thank you, Chair McWilliams, for

22 convening us. It's obviously, as both you and

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1 Marty said, a pretty brutal time, especially for

2 communities of color.

3 The public health crisis is hitting

4 communities of color harder. Small businesses

5 owned by minorities are being harder hit. 

6 Employment for minorities has been harder hit

7 than for anybody else. The struggle we're having

8 in education is hitting communities of color

9 harder than anybody else.

10 It's just a brutal time for the

11 communities that we're all working in and for. I

12 thought I might highlight just a handful of

13 issues that are on my mind that I'm sure are in

14 your mind, but I think are worth some discussing. 

15 Obviously, on the small business front, the

16 really small businesses didn't get much help out

17 of the PPP program. The help they did get was

18 mostly from minority depository institutions and

19 CDFIs. They had a much harder time getting

20 access to banks beyond MDIs and CDFIs.

21 I think that's a significant issue

22 that needs to get worked on and addressed because

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1 the problem for small businesses isn't going

2 away. That was especially acute for minority

3 owned businesses, as I mentioned, were harder hit

4 in the crisis and had less access to the banking

5 system and less access to PPP loans.

6 That's got to be addressed in the next

7 -- whatever happens in the next stimulus bill, if

8 there is one. Obviously, on many people's mind

9 is the Community Re-investment Act reform. I was

10 very glad to see, Chairman McWilliams, your

11 comments about wanting to work with the fed and

12 others on reform.

13 I think that the fed's approach

14 provides a reasonable basis to begin discussions. 

15 I think it's a much better approach than the

16 approach that the OCC put forward unilaterally,

17 which I thought, itself, was a mistake. The

18 third issue just to address -- again, I know

19 you're on it -- is commercial real estate, which,

20 again, is affecting low income communities much

21 worse than anywhere else. Examiners tend to

22 thwack community banks pretty hard on commercial

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1 real estate whenever there's a downturn.

2 I worry about that time right now. 

3 Trying to figure out how to work with banks on

4 CRE issues right now is pretty critical for low

5 income communities. The fourth big issue I

6 wanted to put on the table was about the way our

7 payment system continues to disadvantage low

8 income people.

9 We've talked about this many times on

10 the Committee, but you saw it in spades when the

11 government tried to get money out the door to low

12 income communities. The people who needed it the

13 most either never got it or got it last. We need

14 to continue to push on good funds availability,

15 getting cash into the hands of the unbanked.

16 I was encouraged by the ABA's

17 announcement, its support of safe and affordable

18 bank on accounts. It's a project that the FDIC

19 has been leading on for many, many years, but I

20 do think we have, still, much more work to do to

21 make sure our payment system actually works for

22 people who need it the most. The last big set of

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1 topics -- again, I know this is on your agenda,

2 Chair McWilliams -- is about the effect of

3 technology on community banking. Again, it

4 affects community banks serving low income

5 communities significantly.

6 As people talk about central bank

7 digital currency, as we're seeing innovations in

8 fintech, unless we do take affirmative steps to

9 help CDFIs and MDIs in community banks serving

10 low income communities more broadly, they're

11 going to get left behind, and we're going to see

12 even more deterioration in access in low-income

13 communities.

14 This is an absolutely critical area. 

15 I really appreciate the chance to put those items

16 on the table. I really look forward to

17 additional input from the rest of this wonderful

18 group. I wanted to add my welcome to the new

19 members. You did a great job bringing new people

20 into the Committee. I'm really looking forward

21 to their contributions.

22 MR. MILLER: Thank you so much,

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1 Michael, and thank you for staying within the

2 time. Raphael Bostic, thanks for joining us. 

3 Please go ahead -- 

4 (Simultaneous speaking.)

5 MEMBER BOSTIC: I'm unmuted and video

6 is started. Good afternoon, everyone. Good

7 morning. It's really good to be here. Thank you

8 for convening this, Chair McWilliams. I'm really

9 pleased. I thought I would jump in quickly with

10 a few comments.

11 I totally agree with Michael's

12 commentary on CRA reform. We're going to do all

13 we can to make sure that we get a lot of input on

14 that. In terms of payments and its exclusion of

15 low income people, we just released, in

16 September, a white paper on financial inclusion

17 around the relationship between technology and

18 inclusion that I think would be important for

19 people to look at.

20 Then on technology and community

21 banking, me and my chief of supervision did an

22 op-ed on exactly this issue and how we think

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1 about having community banks be more engaged. 

2 What I wanted to put on the table are two issues. 

3 One is workforce development and really how do we

4 think about making sure that people with low

5 wages and in areas that are being disrupted can

6 get jobs. In this regard, one significant

7 barrier to economic mobility occurs when career

8 advancement actually puts a family above the

9 income eligibility threshold for public

10 assistance programs.

11 This can often lead to people losing

12 their benefits or losing more benefits than

13 they're actually making, in terms of extra

14 income, so they can be worse off by doing this. 

15 This research, for us, resulted in something --

16 an initiative we're calling the Advancing Careers

17 for Low Income Families Initiative.

18 We are putting this research into

19 action. We have partnerships with state agencies

20 in Alabama, Connecticut, Oklahoma, Florida,

21 Georgia, and Tennessee. We're working, really,

22 to change practices through the customization of

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1 something that we call a CLIFF tool, where CLIFF

2 stands for career ladder identifier and financial

3 forecaster.

4 We've been working very closely with

5 Goodwill, on the local level, to try to make

6 progress here. I would also want to call out a

7 partnership that we have stood up with the Markle

8 Foundation and over 30 organizations, ranging

9 from corporations to civil rights groups. We're

10 calling it the Rework America Alliance. This is

11 really designed to develop strategies to enable

12 unemployed and low wage workers to emerge from

13 the crisis stronger, getting better skills, and

14 being well positioned to take advantage of the

15 opportunities of tomorrow.

16 My Center for Workforce and Economic

17 Opportunity has also launched what we're calling

18 the Talent Finance Initiative, which is a

19 partnership with the U.S. Chamber, WorkingNation,

20 and the Greater Houston Partnership.

21 We're looking for ways to design --

22 new ways to fund and finance workforce

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1 development. The last thing I wanted to talk

2 about is something I'm very excited about. 

3 Hopefully, you've heard about this. Earlier this

4 month, my bank, along with the Federal Reserve

5 Banks of Minneapolis and Boston, launched a new

6 series titled Racism and the Economy.

7 It really was motivated by high

8 profile events in the past and increasing

9 recognition that this has implications for

10 macroeconomic potential. We've designed this to

11 be a seven-part series or a multipart series. 

12 We're going to cover particular topics, such as

13 employment, education, health, housing, wealth,

14 financial services, and criminal justice because

15 all of these are areas where racism is a definite

16 constraint. We're really going to focus on

17 actions.

18 We're having proposers really look to

19 offer proposals on things we might do to make

20 progress on this and have the conversation be in

21 that solution space. We had our first session on

22 October 7th. I can put the link in the chat if

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1 I'm allowed to do that.

2 I know we're not supposed to use the

3 chat for that. It was really an interesting

4 thing. We had Angela Glover Blackwell and Ursula

5 Burns as featured speakers, and then Geoffrey

6 Canada from the Harlem's Children Zone, and

7 Carmen Rojas from the Marguerite Casey Foundation

8 as speakers.

9 We closed with a panel of the three

10 presidents, myself, Eric Rosengren, and Neel

11 Kashkari. We had over 3,000 attendees. We had

12 Kai Ryssdal from Marketplace, as our moderator. 

13 I will just highlight some key themes. One is

14 that history matters and continues to play an

15 important role in shaping how things play out

16 today. The second that emerged is there's real

17 tension between incremental efforts and

18 transformational change. The speakers had really

19 different views on that.

20 A third part, which is important for

21 this conversation that we're having, as well, is

22 that there is a long run aspect to this. This is

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1 not going to be solved in a day or two. This is

2 going to take years and years and a real

3 commitment.

4 Then the last thing I would just say

5 is we're trying to place a large emphasis on

6 building coalitions with new participants,

7 bringing more people into the conversation, so

8 that this is -- so that we bring every effort and

9 every resource we can to harness and to make real

10 change. Thank you, again, for allowing me to be

11 here, and I'm looking forward to the rest of the

12 day. It's really a pleasure.

13 MR. MILLER: Thank you so much,

14 Raphael. I was one of the 3,000 attendees. It

15 was a terrific program. Welcome to Naomi Camper

16 from the ABA. Welcome to the Committee. You've

17 already gotten a shout out. Why don't you go

18 ahead and start your presentation?

19 MEMBER CAMPER: Great, thank you so

20 much. Can you guys hear me?

21 MR. MILLER: Yes, we can.

22 MEMBER CAMPER: Great. Thank you so

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1 much, and thanks for including me to be part of

2 this Panel. I am glad that I got to go after

3 Jonathan and Governor Bostic because one of the

4 themes that I really wanted to focus on was how

5 banks have been responding to essentially being

6 put in the position -- and we're very glad to be

7 in this position -- of helping to speed delivery

8 of so much of the government relief to struggling

9 consumers.

10 It has really highlighted the cost of

11 being unbanked. Because as Michael noted, the

12 stimulus payments and the EIPs, where time was

13 completely of the essence, in terms of getting to

14 consumers, if you were unbanked, you were not

15 first in line.

16 For PPP, if you were not already part

17 of a banking relationship, the way the program

18 was structured made it harder for you to be in

19 the first round. I wanted to highlight a few

20 ways that banks have been responding to being in

21 this position and some of what we're doing to

22 reduce the number of people outside the

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1 mainstream banking system and welcome them in. 

2 Of course, we were encouraged by the latest FDIC

3 data, but we were also troubled by some of the

4 persistent disparities.

5 Like everybody else, banks had to

6 transform the way they did business overnight. A

7 lot of what we've been doing has been from our

8 bedrooms or our kitchens. We emphasized -- and

9 all of the member banks have emphasized trying to

10 create and offer unprecedented flexibility for

11 individuals and families who have found

12 themselves struggling.

13 Obviously, I think you all know the

14 story of PPP, where something over 90 percent of

15 the loans flowed through banks. With the

16 stimulus payments, this was something that we

17 were gratified for the success.

18 When IRS first estimated how the

19 payments would go out, they estimated that about

20 $60 million would be made electronically. When

21 all was said and done, $122 million of those, or

22 75 percent, went out electronically. Why did

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1 that happen? Lots of collaboration for getting

2 the word out that consumers should enter their

3 direct deposit, but the banking industry really

4 made a full court press to encourage their

5 clients who were already banked to visit the IRS

6 portal and enter their routing numbers in to file

7 their taxes and have their routing numbers

8 entered in that way.

9 Also, we had a really big push to make

10 consumers aware of the ability, when we were all

11 strictly quarantined, to be able to open an

12 account completely online, without visiting a

13 branch.

14 One other element of the stimulus

15 payment program that really concerned us, and we

16 think we've made progress on, has to do with them

17 being subject to garnishment. National Consumer

18 Law Center raised the alarm early on that these

19 payments were -- the way the statute was drafted

20 were subject to garnishment.

21 We worked very collaboratively, and we

22 were very pleased to see the Senate pass language

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1 so that future stimulus payments should not be

2 subject to them. We are working very hard to

3 deliver forbearance relief to consumers, both

4 through the CARES Act programs for GSC and FHA,

5 as well as portfolio loans. While forbearance

6 numbers are decreasing, more than 70 percent of

7 loans that are in forbearance are now in an

8 extension. We are concerned about that, and

9 we're also troubled by new data showing that 7.1

10 percent of homeowners missed their September

11 mortgage payments.

12 This is an area where there's also

13 collaboration with consumer advocates in the

14 mortgage industry. We are hoping to be able to

15 launch a public awareness campaign, so that

16 people who don't know that aid is available to

17 them will be encouraged to call their bank or

18 servicer and take advantage of what's out there.

19 We have seen a huge rise in fraud and

20 phishing schemes. ABA launched its largest ever

21 consumer protection campaign in our history. 

22 Banks Never Ask That is designed to help

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1 consumers not fall prey to this. More than 1,500

2 banks are participating in the campaign.

3 We think that this kind of scale of

4 awareness can really make a difference. I don't

5 want to be the first person to go over my time

6 limit, so let me just end with the big news. 

7 Thank you to Michael Barr for mentioning it. 

8 Together with the Cities for Financial

9 Empowerment Fund, ABA launched -- and we want to

10 give a huge shout out to the nation's core

11 service providers, who provide operational

12 backbone to community banks.

13 Together, we launched an initiative to

14 encourage all banks to offer BankOn certified

15 accounts. Thank you to the FDIC and this

16 Committee for pioneering safe accounts. We know

17 2020 has reinforced, like nothing else could

18 have, the importance of being part of the banking

19 system.

20 If you don't have a bank account,

21 you're not first in line for government relief. 

22 We think that is unacceptable. At our annual

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1 convention, just on Monday, over 2,000 banks in

2 participation. Our CEO, Rob Nichols, called on

3 all banks to consider participating in BankOn to

4 offer an account.

5 We think it will make a tangible

6 difference. We know, like with so much related

7 to BankOn, it's not banks alone -- Jonathan's

8 giving me the sign --

9 (Simultaneous speaking.) 

10 MEMBER CAMPER: -- the whole Committee

11 to make sure that we get everyone into the

12 banking system. Thank you.

13 MR. MILLER: Naomi, thank you for

14 recognizing the Committee's work, and thank you

15 for your work. Jose, you will unmute. We'll

16 hand it over to you.

17 MEMBER CISNEROS: Thank you, Jonathan. 

18 Jose Cisneros, here. Great to see everyone. I'm

19 excited to be able to report what's going on from

20 San Francisco. As with everyone else, we are

21 struggling to survive through all of this. 

22 Fortunately, our government, state and local

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1 leaders, have been listening to the scientists.

2 The folks in the city have been very

3 compliant. We feel we've had some good results. 

4 In fact, for a city of nearly a million people,

5 we have fewer than 140 deaths throughout the

6 entire pandemic.

7 At the same time, we're working very

8 hard to support local businesses and the economy,

9 which, of course, have been severely impacted. 

10 The mayor put together an economic recovery task

11 force of over 100 community members and a similar

12 good-sized engagement from city staff.

13 They've come out with 41

14 recommendations for how we can continue to

15 support businesses that are suffering during this

16 time. Particularly, looking at the work that's

17 going on with regard to financial services, our

18 Office of Financial Empowerment's been working

19 hard to get good advice out to people who are

20 struggling and informing people the best ways to

21 understand and be aware of and access the various

22 types of local, state, and federal government

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1 supports that are here for individuals and for

2 businesses.

3 We're continuing to try and get that

4 word out. At the same time, we also partnered

5 with the California Reinvestment Coalition. We

6 did a local survey of all the banks and credit

7 unions in San Francisco to see how they were

8 responding and how they were supporting their

9 customers.

10 We found it was a real mixed bag, in

11 terms of support. A number of institutions were

12 doing some things, offering relief, working with

13 customers, but we saw not all institutions were

14 doing that.

15 Even the ones that were weren't always

16 making that information or that opportunity

17 available and readily understood by their

18 customers. There was a real mixed bag. I

19 encourage anybody who wants to to go to our

20 website and look at the report. It's called

21 Pre-existing Conditions, Assessing the Financial

22 Services Response to Racism, Inequality, and

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1 COVID-19. We're also continuing to do a lot of

2 work in terms of banking access and fair and

3 equitable banking access.

4 We are continuing to use our financial

5 one-on-one coaches to connect folks to the safest

6 banking services, financial services, that they

7 can access. We're also making sure that they

8 have the opportunity to access whatever relief

9 opportunities are available.

10 What we're finding is that there's

11 still this hidden obstacle for a number of people

12 who completely, oftentimes, unbeknownst to them,

13 have these hidden negative records in their check

14 systems or early warning system records. This is

15 oftentimes becoming a roadblock to them becoming

16 financially successful.

17 We're finding that a fair number of

18 these records are erroneous records. We have, I

19 believe, a real mission we want to suggest that

20 everybody join us on, which is to really reform

21 the check systems and banking record systems

22 culture and make it more similar to the credit

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1 reporting systems. This country's come a long

2 way in giving people equal and open access and

3 transparency to their credit reports, as well as

4 inform them of ways to make corrections to

5 erroneous information in their credit reports.

6 We see nothing of the like for banking

7 record history systems. It really is becoming a

8 handicap for folks who have erroneous information

9 in there, but have no idea it's there, no idea

10 how it's impacting them, and particularly no idea

11 how to correct it.

12 I really do call on everybody on this

13 Committee to find a way to work with us and see

14 if we can make some changes there. We're

15 continuing to explore new areas, where we can

16 help people in our community.

17 I'm very proud of the fact that our

18 city has joined a number of other cities across

19 the country to actually, particularly in response

20 to the pandemic, looking at income replacement

21 projects. We have a basic income project that

22 the mayor just announced to support over 100

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1 artists in the area who've been financially

2 devastated. We have another one that we launched

3 previously to support low income new mothers and

4 other groups that we're looking at. We think

5 there's some really exciting opportunities here

6 to look at things differently, find ways to be

7 responsive to what's going on in our community,

8 and make some differences for people going

9 forward. Thanks for the time.

10 MR. MILLER: Thank you very much,

11 Jose. Next up, Mart Eakes.

12 MEMBER EAKES: Good afternoon,

13 everyone. Let me start by thanking the FDIC,

14 Chairman McWilliams, and Vice Chair Gruenberg for

15 convening this group. I feel like I have worked

16 with just about every person on this Council for

17 more than decades and that it's just a privilege

18 to be included with this group.

19 I really admire just about everyone

20 who's on the Committee. For us, we view this as

21 a time of three different intersecting crises. 

22 We've got the health crisis, which is

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1 devastating.

2 Almost all of us have had, as someone

3 described it, an empty seat at our table, a

4 family table or friend table, of someone who has

5 died because of COVID, which is serious. 

6 Secondly, we've got a jobs and a recession crisis

7 that is especially impacting low income and

8 minority families across the country. Thirdly,

9 we have a moment of (audio interference) both

10 policing and from government action.

11 All three of these together make this

12 a pretty trying time, a difficult time, but also

13 some rays of sunlight have come through. I want

14 to mention priorities for us have been focusing

15 on our staff. Self-Help has about 800 staff

16 trying to keep them safe in 70 different

17 branches, working with 200,000 members.

18 About half of our energy has been to

19 make sure that we keep our staff and members safe

20 and that we survive the crisis. The other half

21 of our energy is focused on expanding in areas

22 where there are service needs, but where CDFIs

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1 and others are facing such hardship that they may

2 not make it all the way through.

3 I wanted to mention the PPP program,

4 which, for all of the criticism that it has

5 received, did a tremendous amount of good. It

6 was designed very, very quickly and was grafted

7 on top of SBA guidelines and eligibility rules,

8 which had lots of unintended consequences because

9 it wasn't really built -- those guidelines

10 weren't built to have a wide distribution

11 network. While it's true that it didn't reach

12 the smallest businesses, by the end of the third

13 round, most of the banks that I worked with --

14 and certainly, our program, we did $187 million

15 of PPP loans.

16 For a small institution, that was a

17 lot. About 65 to 70 percent were to communities

18 of color, which we targeted from the beginning. 

19 It was just a tremendous outreach. It also

20 highlighted the point that Black and Latino

21 businesses, about 90 percent of those businesses

22 do not have any employees.

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1 The vast number of very small

2 entrepreneurs didn't get any help from this

3 because it didn't really fit very well at all. 

4 Yet, by the end, for us, the median loan size was

5 below $20,000. For many of the banks that we

6 worked with, their median loan size dropped a

7 lot.

8 A lot of the criticism that came from

9 the first round, I think, had been addressed as

10 best it could in that program by the end. On

11 policy level, we've got lots of areas that are

12 just hateful. The True Lender Rule is

13 potentially one of the most dangerous things that

14 has come out in recent time. It could enable

15 payday lenders and predatory unsecured lenders to

16 come back and export their usurious products

17 nationwide, even in the states that have blocked

18 it.

19 It was very encouraging to me that the

20 Business Roundtable, the National Association of

21 Realtors, the largest banks in the country came

22 out against trying to implement the, essentially,

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1 repeal of the Disparate Impact Rule that HUD had

2 put in place and, previously, the affirmatively

3 furthering fair housing.

4 There was really unified support from

5 civil rights groups and industry groups to say

6 this is not the time to be taking that step

7 backward. Yet, during this time, debt collectors

8 have had record profits. Payday lenders are

9 expanding in areas where people are desperate for

10 cash.

11 I think our charge, our call to be

12 active on the racial wealth gap, in this moment,

13 is greater than it's ever been. I feel like this

14 Committee, the people that I know on it, we will

15 be in a position to think about that issue and

16 how to actually help our allies and others push

17 forward during this really difficult time. I'll

18 stop there. Thank you.

19 MR. MILLER: I'm sorry. Mart, can you

20 hear me?

21 MEMBER EAKES: Yes, I ended.

22 MR. MILLER: Yes, I'm sorry. I was

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1 inadvertently on mute. I didn't listen to my own

2 instructions. Thank you, Mart, for that terrific

3 presentation. Maurice.

4 MEMBER JONES: Yes. I don't know if

5 you can see me or not.

6 MR. MILLER: Yes.

7 MEMBER JONES: You can? Okay. All

8 right, good. Jonathan, thanks. Madam Chair,

9 thanks for having me. Marty, good to see you,

10 and good to see everybody on this Panel. I'm

11 going to give you some time back because I'm not

12 going to repeat a lot of stuff that has already

13 been said.

14 I would just say ditto to everything

15 that has been said before me. I did want to just

16 share one initiative that LISC is involved in. 

17 We will formally roll out the 29th of this month

18 and move it from there. We're calling it the

19 Black Economic Development Fund. It is a fund

20 that is designed to invest in Black depository

21 institutions, Black-led depository institutions,

22 so Black-led banks, Black-led credit unions, and

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1 Black-led CDFIs, with the ultimate aspiration to

2 strengthen these institutions to serve -- better

3 serve Black-led businesses.

4 What I'm excited about is the funders,

5 the investors in this initially are Netflix,

6 Costco, Square. There are two or three others

7 that I'm not at liberty to talk about at this

8 time, but they're organizations that up to now

9 have done very little in the development finance

10 space and who are answering the call this moment

11 to actually be engaged in fighting the intense

12 racial wealth, health, and opportunity gaps that

13 we have in the country.

14 We're going to launch this with about

15 $100 million in the fund in October, late

16 October, the 29th. It looks like, based on the

17 investors in the pipeline, that this will grow to

18 about a $250 million fund. The proceeds will be

19 used to make deposits in the depository

20 institutions and to provide bridge loan products

21 for those organizations and other Black -- I

22 should have said one -- where there are no

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1 Black-led financial institutions, banks, or

2 credit unions, LISC will be the Black-led CDFI

3 that's probably doing the direct lending to the

4 businesses.

5 We're going to be looking for other

6 partners, as well. The proceeds will be for

7 deposits and, largely, bridge financing. It's a

8 six to eight-year fund right now. We'll see

9 where it goes from there.

10 It's all part and parcel of the kinds

11 of things that we hope more and more particularly

12 private sector enterprises will step up to

13 investing in as we all try to, in Martin's words,

14 tackle the three -- at least the three challenges

15 and invitations that we're feeling now.

16 Otherwise, I echo with what my

17 colleagues have all said as the main challenges

18 and opportunities. I wish that everybody is

19 doing well, staying healthy, and, as I say,

20 staying sane most days in what is a crazy world. 

21 With that, Jonathan, I'll cede my time back. 

22 I'll, say, reserve my time for another day,

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1 Jonathan.

2 MR. MILLER: Noted, and thank you, and

3 good luck with what sounds like a terrific

4 initiative, Maurice. Margaret Libby.

5 MEMBER LIBBY: Okay, can you hear me

6 okay?

7 MS. GRECO: Yes, we can hear you.

8 MEMBER LIBBY: Okay, wonderful. I

9 guess, from California, I'll say good morning,

10 but good afternoon to folks on the East Coast. 

11 Let's see. As others have said, this is such an

12 amazing group of colleagues, so it's great to be

13 with all of you and welcome to the new members.

14 I think I, similar to Maurice, maybe,

15 will focus in on -- I think a lot of folks have

16 already shared some of the ways that COVID and

17 the COVID economy and the racial justice

18 movements that have already been there, but have

19 been amplified in different ways, how all of that

20 is coming together to continue to impact, but

21 even, I think, in a deeper way, the communities

22 that we care about.

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1 I think I'll just put a spin on it

2 that is coming from a youth and young adult

3 perspective because I think why all of these

4 forces are impacting young people in a different

5 way is just that as they're transitioning into

6 adulthood -- we're focused on 14 to 24 year olds

7 -- the kinds of things they're doing in their

8 lives to get economic footholds, whether it's

9 entering the workforce, entering college, trying

10 to secure housing, those kinds of foundational

11 moves that they're making in that part of their

12 life, they're really experiencing a setback on

13 those fronts from which they may not be able to

14 recover without the kinds of things that I think

15 this Committee is talking about and thinking

16 about and some of the things that we're trying to

17 do at MyPath.

18 But it's just such a critical time in

19 somebody's life. We've got young people who,

20 both of their parents have lost their jobs. 

21 They're not eligible for unemployment insurance

22 or some of the stimulus payments. There's so

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1 many young people in those kinds of circumstances

2 around the country.

3 We're focused on Black and Brown youth

4 from low income communities in that age range. I

5 think one of the things that means, as they're

6 experiencing this, in a lot of ways, isolation is

7 that one of the things that they've been telling

8 us matters for them is really looking at the

9 intersection of mental health and financial

10 health. That intersection for them and their

11 generation is critical, given that they have this

12 as a defining, shaping experience as they're

13 making this transition.

14 That's one of the things that we're

15 looking at. I know the San Francisco fed has

16 done some great research there, and others, so

17 we're looking at that as we build out our

18 financial mentoring pilots.

19 It's been something that's been in the

20 works, but as we're looking at how to support

21 young people over time, as they're moving through

22 this transition into adulthood, we are looking to

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1 scale financial mentoring, now delivered

2 virtually, on our new platform, which will be

3 something -- rather than just engaging young

4 people during a workforce experience, we'll be

5 able to engage them over time.

6 We're calling it MyPath Next. We're

7 largely working with Black and Brown tech

8 pipeline groups in what we're calling, and

9 launching in the next three weeks, the MyPath

10 Wealth Equity Lab, which is a place where we will

11 be engaging Black and Brown tech groups to build

12 out this next iteration of our platform, which we

13 see as something that will be a resource to the

14 thousands of young people that we've already

15 engaged across the country, as they're making

16 financial and economic decisions, and then giving

17 them those supports that they need.

18 I think the thing that I also -- I

19 want to echo what Jose shared about the check

20 systems reforms, but also reiterate what I think

21 I touched on in my first meeting with this group.

22 I am hopeful that we can build on the

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1 great work that the Committee has done with the

2 safe accounts by really looking at how to add a

3 transactional non-custodial account for young

4 people, so that we're really aligning those

5 timelines.

6 When you're old enough to work

7 independently, you're old enough to bank

8 independently. Because if those timelines aren't

9 lined up, we're essentially leaving the Black and

10 Brown young people that we're working with to

11 using check cashers and getting on that financial

12 path. Excited to continue those conversations

13 about how we build on the great work and add that

14 transactional account. The other thing that

15 we're focused on -- and this is -- I think Jose

16 also touched on this, but is really looking at

17 guaranteed income as a critical support alongside

18 financial capability, so alongside banking access

19 and alongside financial mentoring.

20 We have a pilot in Santa Clara County

21 with foster youth who are emancipating from the

22 foster care system. We're bringing the financial

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1 mentoring through a partnership with a credit

2 union to provide those young people with the

3 support and skills and that coaching relationship

4 that they'll need to really maximize the impact

5 of those guaranteed income payments.

6 Then we're also getting a pilot

7 started with teen parents, so really looking at,

8 from an equity lens, who are the people who can

9 most benefit from the guaranteed income, and then

10 coupling it with the banking access and the

11 financial supports.

12 I think I will pause there, but just

13 to say that -- echoing what others have said is

14 that especially with the stimulus payments, we've

15 seen that without access to banking -- if you're

16 not on the rails, you just can't access the kinds

17 of benefits that are out there, so just the

18 importance -- to end by echoing the importance of

19 extending those rails to people who are already

20 participating in the economy when they're 15 and

21 16, but without access to those rails. Thank you

22 so much. Excited to hear from the rest of you. 

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1 Thank you, Jonathan. I will go back on mute.

2 MR. MILLER: Thank you very much,

3 Margaret. Alden. Alden McDonald. There you

4 are. Now I hear you.

5 MEMBER MCDONALD: Yes, there we go. 

6 Good. Can you see me, hear me? Hello? Can you

7 hear me?

8 MS. GRECO: Yes, we can hear you.

9 MEMBER MCDONALD: Okay, good. Thank

10 you very much. Welcome all of the new members to

11 the Committee. I, like Martin, we've been around

12 for a while. We feel like dinosaurs, almost,

13 representing on this Committee. This Committee,

14 in the past years, has done a tremendous amount

15 of work. What I'd like to share from where I

16 sit, to this Committee, is that a lot of the work

17 we've done, it's almost like if someone punched

18 us in the gut because from where I sit, a lot of

19 the good work we've done, there's a changing

20 guard and there's a change in direction for a lot

21 of these items.

22 For example, what we see, we see a lot

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1 of individuals losing their jobs. We see a lot

2 of individuals going back in the marketplace with

3 less income. We see a lot of small business, a

4 lot of minority business, a lot of

5 African-American owned business that will have a

6 hard time rebounding.

7 All of this relates to jobs in

8 different ways in the challenged communities. We

9 also see housing costs getting way out of hand. 

10 The housing costs, we see the increase in housing

11 cost. It's going to put some pressure on the

12 ratio, not only for home ownership, but for

13 renters, as well.

14 We see escrow bound to increase

15 because of taxes, because of the upward trend in

16 property values and reassessments. We see

17 insurance costs increasing. We're beginning to

18 see a lot of new pressures in the industry. On

19 top of all of this, we also see the fintech

20 companies, a lot of new fintech companies come

21 into play. A lot of these fintech companies, at

22 one point, did, in fact, provide some answers to

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1 the small wage earner, but we see new fintech

2 companies putting new products in place, there

3 is, as Martin talked about, a whole new payday

4 lending effort.

5 We see a lot of this coming into the

6 community. We see a lot of it coming into the

7 marketplace and my immediate thought on what do

8 we do about this? Maybe Jonathan through some

9 future date can take an inventory of where we

10 were pre-pandemic and some of the new issues that

11 are popping up post-pandemic and sort of take a

12 balancing act and see what it is that we need to

13 press forward with.

14 The other piece on the fintech

15 companies, a lot of fraud that is popping up out

16 there to the minority community, what are the

17 products and how the products are being offered

18 is opening up the wallet, so to speak, of

19 individuals who cannot afford to have a hiccup. 

20 The whole fraud piece, the whole disclosure

21 piece, I think we need to look at. The CRA

22 reform effort, I think it's much needed. I think

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1 the FDIC has been moving down this road. I'd

2 like to challenge our staff to look at a

3 simplified version for community banks.

4 A lot of community banks are willing

5 to jump in and to reach out to some of these

6 individuals, but the rules are not clear, and

7 there's no simplified version for them to jump

8 in, take hold of something, and make something

9 happen.

10 Everybody's trying to do the balancing

11 act with security, investments, and lending. I

12 think on the community bank side, that is a very

13 simple way that we can maybe have discussion on

14 in the future. We see a very strong challenge to

15 returning the economy, particularly the

16 African-American community or any community.

17 It's going to be a challenge to get

18 the economy going again, whether it's the jobs,

19 whether it's the small business, whether it's

20 lending, the whole bit. The return of the

21 economy, different cities are managing that

22 differently. Whereas, normal return of an

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1 economic downturn with this large a policy would

2 normally take three years, three to four years,

3 the minority community, it takes ten years. We

4 have to keep this in mind and look at the number

5 of items we are dealing with. Maurice talked

6 about his new effort at LISC. I think that's

7 right on point. I think partnerships are going

8 to develop out of this.

9 Hopefully, we will have more community

10 banks joining in to maximize the credit

11 available. My last speech is on the education

12 front. We have a lot of individuals in the

13 minority communities really having trouble with

14 the education online.

15 A lot of them do not have table

16 service to really (audio interference). We're

17 going to have an education setback in these

18 communities. I don't know how we chime in and

19 maybe get our fiscal education efforts into that

20 side. I want to stop there.

21 I have a number of things I could talk

22 about, but I think, for the most part,

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1 everybody's been working to make this recovery

2 come back and the work of the FDIC has been very,

3 very much successful. This new challenge, I feel

4 we can get by with these. Thank you.

5 MR. MILLER: Thank you. Thank you

6 very much, Alden. I appreciate it. Lisa Mensah,

7 welcome to the Committee.

8 MEMBER MENSAH: Thank you.

9 MR. MILLER: You're up.

10 MEMBER MENSAH: Thank you, Jonathan,

11 and thank you Chairman McWilliams and Director

12 Gruenberg. It's really a pleasure to be here. I

13 feel like others who have said there are so many

14 friends and people I adore and love working with

15 on this Committee, so it was an easy yes.

16 I am looking forward to the rest of

17 the deliberations and to learning some things. I

18 will take a page out of being a little bit

19 focused on this question of challenge. The God

20 honest truth is that I am challenged by pulling

21 off OFN's biggest event, which is our wonderful

22 Finance Justice annual conference.

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1 I hope you'll all sign up. It's

2 November 9 through 12. We think thousands will

3 gather virtually. Unfortunately, it will not be

4 in L.A., as we hoped to be, but it will be

5 strong. We're very thankful to you, Raphael

6 Bostic, for doing a message for us. Many of the

7 folks on this call will be part of our various

8 sessions. The theme of finance justice really

9 describes what I think is in front of us as a

10 movement of community development, financial

11 institutions. I would say that I want to borrow

12 a phrase that was coined by Robert Smith, who

13 said CDFIs function as the capillaries of a

14 financial bloodstream.

15 To me, our challenge right now is to

16 be the capillaries. We're being asked to do a

17 tremendous amount. That's really what several of

18 our other folks have stepped in. Let me tell you

19 what it looks like from my shoes.

20 That is that we actually have, in some

21 cases, 40 years of experience in operating loan

22 funds and credit unions and the banks, but that

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1 many of our absolutely strong players are very

2 small. There is a line in the famous movie Jaws,

3 for those of you who are of my generation, where

4 they say we're going to need a bigger boat.

5 I feel that is the challenge of the

6 capillaries right now. We've got to be stronger,

7 swifter, and bigger to meet this moment. That's

8 where I think these new partnerships are so

9 essential. I want to echo what Maurice said. I

10 think the surprise of this year, in all of its

11 difficulty, is new partnerships, and many of them

12 pulled by old partners, partners like FDIC,

13 partners like our banking partners. For us, this

14 was the new partnership with Google this year. I

15 think folks have heard of this, but Google placed

16 $170 million of treasury money with us for over

17 ten years to reach small businesses, particularly

18 in minority communities, especially in

19 African-American communities.

20 That money was five times

21 over-subscribed amongst the OFN membership. Of

22 the thousand CDFIs that are certified, about half

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1 of them are loan funds. OFN's membership is

2 around 330.

3 When we say that we were

4 over-subscribed five times for $170 million, it

5 shows you that people want to be good

6 capillaries, want to have access to funding that

7 is very efficient, very perfectly timed for the

8 moment.

9 This is where we need to push our

10 partners. We've spent a lot of time showing we

11 could get the money back to people. We're having

12 to make the tough case that this is when we need

13 deeply discounted debt and grants. We've got

14 balance sheets to build. Here, I want to really

15 thank the members of Congress and folks who've

16 stood up to look for other places where we could

17 support a field that exists, but needs to be

18 stronger. I think that's why we're hopeful that

19 both in recovery funds from the federal level,

20 that in expanded CDFI appropriations, we can be

21 better capillaries.

22 We can be a bigger, stronger boat. 

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1 Because I think -- and Naomi's comments really

2 made this clear -- we need to do our work. Our

3 work is to extend where the formal banking sector

4 can't always reach into those sole

5 proprietorships, on native reservations, into

6 communities of deeply persistent poverty, whether

7 those are rural or urban pockets.

8 I am looking forward to our

9 discussions today. I won't take any more time. 

10 Big challenge, be the kind of capillaries we were

11 meant to be for this moment, and it will take

12 partnerships. That's what we're really focused

13 on, so thanks.

14 MR. MILLER: Thank you so much, Lisa. 

15 That's a great analogy, great image to have in

16 mind. Thank you. Jonathan Mintz.

17 MEMBER MINTZ: Thank you. It's really

18 inspiring to be with this group. I have to say

19 that the work over the last several months has

20 spanned from emptying my dishwasher two to three

21 times per day or being on the phone with the

22 FDIC, with the ABA, with a bunch of folks that

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1 are on this great Commission.

2 I'm really grateful for all of that. 

3 I want to start with some conversation we've

4 already had a little bit about the importance of

5 banking. The inspiring part of this pandemic,

6 this moment, is that the importance of being

7 connected to the mainstream banking system has

8 catapulted, I think, into the national

9 consciousness.

10 Being unbanked isn't just an

11 adjective. It means you are unable, particularly

12 during COVID, to be able to do the primary, basic

13 things that one needs to be able to do,

14 including, of course, receive government

15 benefits, like the stimulus.

16 I am so deeply thrilled and impressed

17 and grateful to the FDIC's work with the IRS, who

18 agreed to open up a portal allowing people to

19 enter in bank account information, if it wasn't

20 already there, in their system, so that they

21 could get the stimulus payment quicker and safer

22 through direct deposit. Then so grateful to the

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1 FDIC, and through the FDIC, both the IRS and CDC,

2 to tell Americans that, in fact, being banked

3 wasn't just a good idea, but that there were safe

4 and appropriate and affordable and useful bank

5 and credit union accounts out there, as certified

6 by the BankOn program.

7 A nod to Jose Cisneros, who always

8 told me this would be a good national platform. 

9 I think it made a really big difference that the

10 traffic that we saw and that the IRS saw, in

11 regard to people adding bank accounts and opening

12 up new bank accounts, was tremendous.

13 Our partners really stepped forward in

14 the financial institutions who had certified

15 accounts, particularly those who had accounts

16 that could be opened online, entirely, by new

17 customers.

18 That's a really big deal and, I think,

19 a clear call to the banking industry and to those

20 who support them about the importance of that

21 kind of functionality. I think that this

22 announcement this week by the American Bankers

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1 Association, which is so amazing, which is to

2 really coalesce, as a whole field, across banking

3 and government and community organizations and

4 advocates, really come together to the idea that

5 these kinds of accounts need to be made

6 available. This is not a charitable ask. These

7 accounts are sustainable.

8 They are doing really well for the

9 financial institutions. When the ABA, this week,

10 told their thousands of members that the big push

11 was to get them all to open an account, the

12 traffic that we have been fielding at the CFE

13 Fund in just the last couple of days is inspiring

14 and a little bit scary.

15 I also want to say, in addition to the

16 importance of banking and the progress around

17 safe banking during these times, I want to talk a

18 little bit about the cities that we've been

19 working with. We're working in about 100, a

20 little over 100 cities and counties around the

21 country.

22 Mayors and county leaders are stepping

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1 forward and putting financial empowerment

2 programs, not just banking, but also financial

3 counseling and the like, putting it front and

4 center in their emergency responses to COVID. I

5 think that kind of positioning of this work is

6 also one of the great reveals of this terrible

7 pandemic. Just in the financial counseling

8 field, alone, we have either helped create or

9 beef up, because of increased demand, these kinds

10 of public services in over 50 cities and counties

11 in just the last few months.

12 While that's a lot of work on our end,

13 as I know you all have been working so hard, I

14 think what it really speaks to is a clear

15 understanding by local government about how

16 critical individual financial stability is and

17 that there are programs that deliver to be able

18 to genuinely help people.

19 The last thing I just want to say real

20 quickly is that not only are these programs being

21 avidly consumed and highlighted and distributed

22 by local government, but most importantly, people

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1 are taking advantage of them.

2 I think this is one of my big

3 lightbulbs during this pandemic, which is that

4 even in a crisis, even when health and safety and

5 kids and dishwashers are at the forefront of

6 people's minds, when help is made available,

7 people go to great lengths to consume that help

8 and to use that help to better their lives, to

9 figure out how to navigate a new IRS portal to

10 put in a bank account, to figure out how to talk

11 about their finances remotely with a stranger,

12 and to be able to start to negotiate around debt

13 and build their credit scores up, all those other

14 things that are so critical.

15 I'm very inspired by what I'm seeing

16 in local government and, most importantly, in

17 underscoring this idea that financial empowerment

18 is a key to pandemic response. Thank you.

19 MR. MILLER: Thank you so much,

20 Jonathan. I want you to know we really -- the

21 FDIC really values the partnership that we have

22 with your organization and others. Pam

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1 Patenaude.

2 MEMBER PATENAUDE: Jonathan?

3 MR. MILLER: Yes, I can hear you.

4 MEMBER PATENAUDE: Can you see me?

5 MR. MILLER: Not yet, but that could

6 be my video. We're a little slow here. Why

7 don't you go ahead and get started, and you'll

8 pop up. There you are. Now I see you.

9 MEMBER PATENAUDE: Thank you,

10 Jonathan. Good afternoon, Chairwoman McWilliams

11 and Director Gruenberg. It's wonderful to be

12 here, at least virtually, with all of you today. 

13 I'm so inspired by hearing from my fellow

14 Advisory Board members. I'd like to focus on

15 something that I'm very passionate about. Those

16 of you that know me personally, I continue to

17 focus on the recovery efforts, the long-term

18 recovery efforts, primarily in Puerto Rico, but

19 in the continental United States, as well. 

20 Something that the pandemic has certainly

21 hampered the recovery efforts, not just in Puerto

22 Rico, but in other areas.

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1 But in particular, in Puerto Rico,

2 there are more than 6,000 homeowners who are

3 eligible and waiting more than three years, since

4 Hurricane Maria struck the island, for permanent

5 reconstruction of their homes. Only 175 of those

6 homeowners have had their homes permanently

7 repaired or reconstructed.

8 By comparison, Texas, who had close to

9 the economic damages that Puerto Rico did, 2,000

10 homeowners' homes have been completed to date. 

11 It's just, by comparison, obviously still very,

12 very slow, painfully slow in Texas, as well. 

13 What comes to mind is that of these homeowners,

14 many of them who, pre-pandemic, had reasonable

15 credit scores, with their homes in disrepair,

16 they're unable to tap equity that may have helped

17 them ride through the COVID recession. The folks

18 that we're dealing with are the fortunate ones

19 right now.

20 Of the nearly $20 billion in disaster

21 recovery funds, HUD funds alone, only a fraction,

22 less than $1 billion, has been spent to date, an

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1 estimated $70 to $80 billion in FEMA money in

2 addition to that. I bring that to your

3 attention.

4 The other area I'd just like to touch

5 on -- and it's been brought up by other Advisory

6 Board members -- the increase in housing costs. 

7 I can't help but think how we are going to build

8 any affordable housing in this country with the

9 skyrocketing lumber prices and, certainly, not --

10 we're not going to see any reduction in lumber

11 prices in the near term.

12 I wanted to bring that up. The other

13 area that came up was the lack of skilled labor. 

14 I think there's enormous opportunity. One of the

15 non-profits that I serve on the board of, the

16 Homebuilders Institute, is laser focused on job

17 training in the construction industry. I'm going

18 to yield back my time to you, Jonathan. Thank

19 you for the opportunity to share my concerns.

20 MR. MILLER: Thank you very much, Pam,

21 for bringing to the Committee a number of

22 concerns that I think we need to think about. 

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1 Another new member, Jennifer Tescher, welcome to

2 the Committee. Look forward to hearing your

3 discussion.

4 MEMBER TESCHER: Great. Good

5 afternoon, everybody. Thanks so much for the

6 invitation to join this Committee. Like others

7 have said, I feel like I'm really among friends. 

8 I think I know almost every single person on this

9 group, and if I don't know you yet, I look

10 forward to getting to know you. Thank you to the

11 chairman and vice chair for being here and for

12 convening this group. Tons of important points

13 have already been made.

14 I just want to highlight a couple of

15 them, and then talk about a couple of other

16 things on my mind. I want to echo what many of

17 you have said around how the challenge of getting

18 the government stimulus payments out has really

19 re-awakened people to the issue of the unbanked. 

20 I would really like to think that this represents

21 maybe our best moment ever to think about how we

22 get rid of the unbanked problem once and for all. 

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1 I know we're going to hear from the FDIC on its

2 latest research, which shows a trend line of

3 decline in the number of unbanked, although

4 recognizing that data was pre-pandemic.

5 But what is it really going to take

6 to, once and for all, get rid of that number? 

7 It's a relatively small number. I'd love for us

8 to use our creativity to really think about that

9 and, as they say, not waste a good crisis.

10 I also want to acknowledge something

11 else that's been going on out in the market that

12 hasn't been getting quite as much attention,

13 given all of the other crises we're dealing with. 

14 That is a number of institutions, large banks, in

15 particular, starting to offer small-dollar credit

16 products. Most recently, Bank of America

17 announced the creation of a small-dollar credit

18 product. I just want to take a minute to

19 acknowledge the FDIC's leadership on this topic. 

20 You, more than any of the regulators, have

21 really, for a decade now, been really promoting

22 this. I think hats off to you. I think some of

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1 the new efforts we're seeing out in the market

2 are really due to your long-standing efforts. 

3 I want to talk a little bit about

4 technology. I know Michael Barr, at the top of

5 this section of the agenda, talked about the

6 importance of making sure that smaller banks,

7 community banks, aren't put at a disadvantage

8 because they don't have the resources or

9 abilities as it relates to technology. We're

10 hearing a lot about anti-competitive behavior as

11 it relates to big tech. I'm thinking about the

12 Google announcement the other day from the

13 Justice Department. We have our own

14 anti-competitiveness issue in the banking

15 industry as it relates to the core processing

16 vendors.

17 We actually just published a paper a

18 couple of months ago called What Banks Need for

19 their Tech Stack to Support Consumer Financial

20 Health. The report looked at the fact that

21 there's all these incredible enhancements that,

22 in many cases, fintech or challenger banks have

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1 developed that would make for obvious additions

2 to basic checking accounts at every bank and

3 credit union offers. What's often holding those

4 institutions back is the inability to get their

5 tech vendor to make it happen for them,

6 particularly an issue for small community banks.

7 I want to reference the fact that the

8 FDIC is obviously thinking about this and put out

9 an RFI over the summer about the potential

10 establishment of a standards based voluntary

11 certification framework around technology

12 vendors. I think there's a tremendous amount of

13 work to be done in this arena. It's a

14 complicated one, but I'm glad to see the FDIC is

15 thinking about that. I think there's work that

16 the regulators could do to together on this

17 issue.

18 I think it's going to be of great

19 import. Finally, I want to just say -- I want to

20 raise one more issue, as it relates to race

21 equity. I was so glad to hear about -- from

22 Raphael Bostic, his series on racism and the

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1 American economy. I saw the marketing for the

2 first episode -- or first session, but I didn't

3 realize it was going to be a series. We run a

4 network of 150-160 companies and organizations,

5 many of them financial services providers. Based

6 on what I'm hearing and seeing, I don't find that

7 there are enough safe places for dialogue,

8 particularly among bankers, on this topic and on

9 what to do about it.

10 We've seen lots of big announcements

11 from the big banks, but I think elsewhere in the

12 industry, on this topic of race equity, whether

13 it relates to your own internal hiring practices

14 or as it relates to your external practices with

15 your customers, I think there's been a paucity of

16 conversation and dialogue.

17 I think it can be complicated, but

18 there's a responsibility for all of us at this

19 table, and I think the regulators have an

20 important role to play to create safe space for

21 that dialogue, to help people understand what

22 they might be able to do differently.

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1 One thing we're hearing -- I'm getting

2 the stink eye from Jonathan. One of the things

3 that we're hearing directly from bankers is that

4 they don't have the data that they need to be

5 able to understand the disparities between their

6 customers, in a funny way, because fair lending

7 rules prevent them from collecting that data,

8 aside from their mortgage and small business

9 borrowers. It's sort of an interesting potential

10 challenge here. On the one hand, we want to make

11 sure that institutions are lending fairly and not

12 using data that might disadvantage people, but at

13 the same time, it's really hard to diagnose the

14 problem without that data.

15 That's something that I've now heard

16 from a number of financial institutions and look

17 forward to having an opportunity to talk about it

18 with this group. Thank you.

19 MR. MILLER: Jennifer, thank you so

20 much. I'll be happy to learn more about the

21 concerns that you just mentioned. Finally, I

22 want to welcome the last new member of the Panel,

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1 Christina Tetreault. Christina, so glad to have

2 you. Go ahead.

3 MEMBER TETREAULT: It's wonderful to

4 be here. Thank you so much. I'm going to talk

5 about two different things, the first of which is

6 Consumer Reports' research on the financial

7 impacts of the pandemic. Then separately, I'm

8 going to share some thoughts on the role of

9 digital finance during the pandemic and pull on

10 some of the threads that have been mentioned here

11 today. Just a quick note. I'm happy to connect

12 offline about methodology and additional finding

13 from Consumer Reports' research, but in the

14 interest of time, I'm not going to spend -- I'm

15 not going to do a deep dive on that.

16 What do the data say about what the

17 financial impact is on households? This won't

18 come as a surprise to anyone on the call. The

19 pandemic is widening pre-existing financial

20 inequities. Just as the adverse health impacts

21 of the crisis are disproportionately affecting

22 people of color, we're seeing the same thing when

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1 it comes to financial hardships, that these

2 families are struggling more because of the

3 systemic racism that left them in a position to

4 be more vulnerable to these impacts.

5 I'm going to give some specific

6 examples. What we've seen is Black and Latinx

7 borrowers are more likely -- excuse me, workers

8 are more likely to have lost jobs and income than

9 White workers. What that has resulted in is that

10 Black and Latinx families have been more likely

11 to have to cut back on spending in order to find

12 funds to cover very basic expenses, such as food

13 and housing. We've also seen that these families

14 are considerably more likely to be struggling

15 with housing payments, so rent or mortgage. What

16 is this showing overall for Consumer Reports?

17 What we've seen is -- and this has

18 been someone else's language, but this sort of

19 K-shaped difference rate, is that people who were

20 doing well coming into the crisis and didn't

21 suffer job loss or loss of income are actually

22 fortifying their savings, and they're doing

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1 pretty well. There was an earlier report this

2 week about credit scores going up. I think that

3 was in the Wall Street Journal. Then what we're

4 seeing, in particular, is with families that have

5 faced financial hardship, as the crisis wears on,

6 the hardship is increasing over time.

7 As I mentioned, Consumer Reports has

8 been tracking families since the crisis, and

9 we've done particular work on some qualitative

10 work on following 50 different people through the

11 crisis to see how their experience changed over

12 time. In the October panel, we saw, in

13 particular, the impact of the end of expanded

14 unemployment and what that means. We've seen

15 that families are increasingly visiting food

16 banks, that they're seeking alternative ways to

17 cover lost income, and in one particularly

18 heartbreaking instance, a woman from Tennessee,

19 who had been donating plasma, now is anemic and

20 is unable to get that extra income for her family

21 because she can't donate blood.

22 It's a very worrying time. We have

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1 seen, also -- we have been tracking how are

2 people able to access help to help them withstand

3 these -- the financial storm that the pandemic

4 has created. We've tracked all different types

5 of help. That includes not only unemployment,

6 which we've seen actually increase, over time,

7 people's success. Accessing unemployment has

8 gone up as we've been tracking. We've seen

9 persistent difficulties in accessing relief from

10 debts.

11 I'm happy to share specific details,

12 but we've noticed some worrying consumer

13 experiences in accessing relief from auto loans,

14 credit card debt, even student loans, despite the

15 federal backed loans being in automatic

16 forbearance. People with private loans are

17 struggling very much in order to get relief from

18 them. Again, this persistent hardship that we're

19 seeing and the urgency which appears to be lost

20 when it comes to getting people real relief, in

21 terms of income supports and other things, very

22 eager to see any relief efforts put people first

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1 and really center those families in the economic

2 response.

3 I'm going to transition to just

4 talking very briefly about digital finance. 

5 Earlier, members have commented on the increase

6 in fraud. I'm about to say some things based on

7 reading media reports, so this is not Consumer

8 Reports' finding, but the Wall Street Journal,

9 the New York Times, and other media have reported

10 the incidents of consumer fraud, and particularly

11 the consumer fraud through digital financial apps

12 like Venmo and the Cash App.

13 This is particularly worrying because

14 these apps are seeing, according to, at least,

15 their CEOs, tremendous uptick, particularly among

16 people who are using these apps as replacements

17 for traditional financial accounts, which

18 obviously is very near and dear to everyone this

19 call. What does this point to? It points to a

20 number of problems that Consumer Reports has been

21 very eager to see remedied. One is greater

22 emphasis by these companies, financial service

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1 providers, broadly, in keeping fraudsters out of

2 their -- off of their platforms.

3 It really speaks to the gap in

4 payments law that doesn't make consumers whole

5 when they are tricked into authorizing a payment

6 to a scammer. We think there's a real

7 opportunity for industry to step up, for the law

8 to catch up with the way that people approach

9 these products. There's a lot of opportunity

10 here. In the interest of time, I'm going to stop

11 speaking. I'm very eager to continue this

12 conversation, and I'm grateful for the

13 opportunity to be here. Thank you.

14 MR. MILLER: Thank you so much,

15 Christina, and thank you to all the members of

16 the Committee for a really fascinating view of

17 the issues confronting your community. It's now

18 time for the results of our survey, the 2019 FDIC

19 survey results, how America banks. I'm going to

20 turn the Panel over to Karyen Chu. I'm going to

21 introduce her briefly and just make sure the

22 members of the Panel, of the Committee, know that

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1 there are more extensive biographies of all the

2 panelists in the materials that we sent. Karyen,

3 welcome.

4 Karyen is the chief of banking and

5 consumer research in the FDIC Center for

6 Financial Research, in the Division of Insurance

7 and Research. Ms. Chu and her team conduct

8 consumer finance research, including work on this

9 survey, the FDIC survey, and research for

10 publication and academic journals and analysis

11 that supports a wide range of FDIC policymaking. 

12 With that, Karen, I'll turn it over to you. 

13 Introduce your panelists and get us started. 

14 Thank you so much.

15 MS. CHU: Great, thank you. Let me go

16 ahead and share my screen. Can you all see the

17 slides? Yes?

18 DIRECTOR GRUENBERG: Yes, I can,

19 Karyen.

20 MS. CHU: Okay, thank you. Good

21 afternoon, Chairman McWilliams, Director

22 Gruenberg, and members of the Committee. We are

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1 delighted to be here today to present findings

2 from our 2019 survey report on how America banks.

3 As many of you know, we have conducted

4 this survey annually since 2009, in partnership

5 with the U.S. Census Bureau, as a supplement to

6 the current population survey. The most recent

7 survey, the results of which we will discuss

8 today, was conducted in June of 2019 and

9 collected responses from almost 33,000

10 households. The survey seeks to gather

11 information from both banked and unbanked

12 households and information on financial products

13 and services that they use to meet their core

14 banking needs. That includes bank credit union

15 accounts, prepaid cards and non-bank financial

16 transaction services and bank and non-bank

17 credit.

18 The survey draws representative

19 samples from all 50 states and the District of

20 Columbia, which allows us to produce estimates at

21 the national and state levels, and even for about

22 60 some larger MSAs. We do recognize that the

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1 2019 survey results reflect a period of generally

2 favorable economic conditions. In light of the

3 extraordinary disruptions caused by the pandemic,

4 how America banks includes a postscript that

5 addresses possible consequences for the unbanked

6 rate and also discusses pandemic-related

7 challenges faced by households in conducting

8 financial transactions, visiting bank branches,

9 accessing savings, and obtaining credit.

10 We will start today's presentation

11 with the 2019 survey results, and we will end

12 with the postscript. Because we are doing this

13 in a virtual format, I have a little bit of

14 housekeeping before we move on to the actual

15 results. What we have done is we have built in a

16 number of places into the presentation where we

17 will pause for questions. Please use the raise

18 hand function in WebEx to indicate when you have

19 a question.

20 When we get to each of those points

21 where we will pause for questions, I will call on

22 members individually, the ones with raised hands,

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1 one at a time. Please know that unfortunately, I

2 won't be able to see when it is that you raised

3 your hands. I just can see that you've got your

4 hands raised at that point in time. I will now

5 ask my colleague Jeffrey Weinstein, to begin

6 talking about the 2019 survey results.

7 MR. WEINSTEIN: Okay, great. Thank

8 you very much, Karen. Does everyone hear me?

9 MS. CHU: Yes.

10 MR. WEINSTEIN: Okay, great. Thanks. 

11 Just to -- I first want to just overview the

12 remainder of the presentation. We're going to

13 follow the order of the topics in the report,

14 including bank account ownership for unbanked and

15 banked households. Before I continue, I think

16 we're moving to Slide 4.

17 MS. CHU: Yes, I'm -- okay.

18 (Simultaneous speaking.)

19 MR. WEINSTEIN: The remainder of the

20 presentation, we'll follow the order of the

21 topics in the report, including bank account

22 ownership for unbanked and banked households,

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1 non-bank financial transaction services, bank and

2 non-bank credit, saving for unexpected expenses

3 or emergencies, and the postscript that Karyen

4 just described. We're going to conclude with a

5 plug to our website, How America Banks, which

6 contains a link to the full report, with

7 additional survey results, as well as a link to

8 economicinclusion.gov, where you can generate

9 customer data tables and charts.

10 To begin with the headline numbers, in

11 2019, nearly 95 percent of U.S. households,

12 approximately 124 million, were banked, meaning

13 that at least one member of the household had a

14 bank or credit union account. These estimates

15 represent the highest number and percentage of

16 households with bank accounts since the survey

17 was first conducted in 2009. Conversely, 5.4

18 percent of U.S. households, approximately 7.1

19 million, were unbanked in 2019, meaning that

20 nobody in the household had a bank or credit

21 union account.

22 This figure displays the percentage of

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1 households that were unbanked in each year of the

2 survey. Between 2017 and 2019, the unbanked rate

3 fell by 1.1 percentage points, from 6.5 to 5.4

4 percent. This decrease corresponds to an

5 increase of approximately 1.5 million banked

6 households between 2017 and 2019. About half of

7 the decline in the unbanked rate between 2017 and

8 2019 was associated with improvements in the

9 socioeconomic circumstances of U.S. households,

10 including annual income level, monthly income

11 volatility, employment status, home ownership

12 status, and educational attainment. Unbanked

13 rates continue to vary considerably across the

14 U.S. population.

15 For example, unbanked rates were

16 higher among lower income households, less

17 educated households, Black, Hispanic and American

18 Indian or Alaska Native households, households

19 headed by a working age individual with a

20 disability, and households with income that

21 varied a lot or somewhat from month to month,

22 which we call volatile income.

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1 This slide shows unbanked rates by

2 race and ethnicity over time. We see that recent

3 declines in unbanked rates have been particularly

4 sharp for Black and Hispanic households. Between

5 2015 and 2019, the unbanked rate for Black

6 households, if we look at the first set of bars,

7 declined from 18.5 percent to 13.8 percent. The

8 unbanked rates for Hispanic households, looking

9 at the second set of bars, declined from 16.3

10 percent to 12.2 percent. However, despite these

11 improvements, unbanked rates in 2019 for Black

12 and Hispanic households remained substantially

13 above the unbanked rate for White households in

14 2019, which is 2.5 percent. This estimate is

15 displayed in the second to last set of bars.

16 This map displays unbanked rates

17 across states in 2019. Unbanked rates ranged

18 from 0.5 percent in New Hampshire to 12.8 percent

19 in Mississippi. In general, unbanked rates were

20 highest in the South, consistent with previous

21 years. However, differences in unbanked rates

22 between the South and the other three regions,

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1 Northeast, Midwest, and West, have narrowed in

2 recent years. Bank account ownership is not

3 static. Among unbanked households in 2019, about

4 half, 50.4 percent, had had a bank account at

5 some point in the past, in other words, had

6 previously been banked.

7 This percentage is slightly higher

8 than in 2017, in 2019, where about 47 percent of

9 households had previously been banked -- 47

10 percent of unbanked households had previously

11 been banked. The 2019 survey asked unbanked

12 households how interested they were in having a

13 bank account. The top bar in the figure shows

14 that more than half of unbanked households, 56.2

15 percent, were not at all interested in having an

16 account, while 24.8 percent were very or somewhat

17 interested, so in the left-most part of the --

18 the first two segments of the top-most bar.

19 The bottom two bars indicate that

20 about one third of unbanked households that had

21 previously been banked, about 31.7 percent, were

22 very or somewhat interested in having an account,

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1 compared with about one sixth of unbanked

2 households that had never been banked, about 17.9

3 percent. For households that were unbanked in

4 2019, but last had a bank account sometime within

5 the past 12 months, almost half, 48.8 percent,

6 were very or somewhat interested in having an

7 account. As in previous years, the 2019 survey

8 asked unbanked households about their reasons for

9 not having a bank account.

10 Habits were similar to those reported

11 in previous years. We see that about half of

12 unbanked households, 48.9 percent, cited don't

13 have enough money to meet minimum balance

14 requirements as a reason for not having an

15 account. This is the top-most blue bar. This is

16 the most cited reason. This reason was also the

17 most cited main reason for not having an account,

18 29.0 percent, which is the tan bar.

19 We can see from the graph that don't

20 trust banks was cited by approximately one third

21 of unbanked households as a reason for not having

22 an account and was the second most cited reason. 

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1 The survey asked about several other reasons for

2 not having an account, as you can see in the

3 graph. I'll just read off a few of them. They

4 include avoiding a bank gives more privacy. Bank

5 account fees are too high. Bank account fees are

6 too unpredictable and personal identification,

7 credit, or former bank account problems.

8 One thing of note that I wanted to

9 point out is that a high proportion of unbanked

10 households that were very or somewhat interested

11 in having a bank account cited personal

12 identification credit or former bank account

13 problems. This was cited by about 27 percent of

14 households that were very or somewhat interested

15 in having an account. This is compared with

16 unbanked households that were not very or not at

17 all interested in having an account; 18.5 percent

18 of these households cited personal

19 identification, credit, or former bank account

20 problems as a reason for not having an account.

21 To complement existing questions on

22 reasons for not having a bank account that I just

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1 discussed, the 2019 survey included new questions

2 for unbanked households, asked about their

3 satisfaction with their most recent bank and

4 their perceptions of how clearly banks, in

5 general, communicate account fees. We see that

6 among unbanked households that had previously

7 been banked, 55.1 percent were very or somewhat

8 satisfied with their most recent bank, and 46.8

9 percent thought banks communicated account fees

10 very or somewhat clearly.

11 We also find that interest in having

12 a bank account was higher among unbanked

13 households that were very or somewhat satisfied

14 with their most recent bank or that thought banks

15 communicated account fees very or somewhat

16 clearly. As I'm going to show in a couple

17 slides, banked households were asked alternative

18 versions of the two questions, and we'll see

19 those results in a little bit. Before we move on

20 to the next section of the presentation, I just

21 want to see if there are any questions at this

22 point.

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1 MS. CHU: It looks like I have two

2 raised hands. Alden.

3 MEMBER MCDONALD: No, I did not raise

4 my hand. I'm sorry --

5 (Simultaneous speaking.)

6 MS. CHU: All right. Thank you,

7 Alden. Jennifer Tescher.

8 MEMBER TESCHER: Yes, just one quick

9 question. If the respondent had a prepaid card,

10 did you count them as unbanked or banked?

11 MS. CHU: Jeffrey?

12 MR. WEINSTEIN: Yes. Prepaid cards,

13 we did not -- we have results on that. We're

14 actually not going to be presenting them in this

15 talk for time constraints, but we did not treat

16 them as banked or -- basically, that was -- we

17 tabulated prepaid card status for households that

18 had a bank account, a checking or savings account

19 at a bank or credit union. We tabulated prepaid

20 card use separately from that. We actually have

21 results in the report that tabulate prepaid cards

22 -- that tabulate whether a household used a

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1 prepaid card across both banked and unbanked

2 households, where banked and unbanked is

3 dependent upon having or not having an account at

4 a bank or credit union.

5 MEMBER TESCHER: I see. Do you happen

6 to know offhand, of the unbanked households, how

7 many of them or what percentage of them had a

8 prepaid card? If you don't, we can talk about it

9 offline.

10 MR. WEINSTEIN: Oh, sure. I can get

11 that number for you in a second.

12 MS. CHU: It's 27.7 percent of

13 unbanked households had a prepaid card in 2019. 

14 Jonathan Mintz.

15 MEMBER MINTZ: Thanks. I just -- I

16 know that this report takes a different approach

17 to the issue of the under-banked. I wonder if

18 you could briefly just outline what that

19 different approach is and what, if anything, you

20 can tell us about that segment?

21 MS. CHU: That segment meaning

22 under-banked?

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1 MEMBER MINTZ: Yes.

2 MS. CHU: Yes. In previous years, the

3 FDIC's survey report would categorize certain

4 households as being under-banked. That would be

5 households that had a bank account and also used

6 one of a specific set of either non-bank credit

7 products or non-bank transaction services, like

8 check cashing or international remittances.

9 As you note, this year, How America

10 Banks does not categorize households as being

11 under-banked. What we -- the alternative

12 approach, really, is to look separately at the

13 different products and services to provide more

14 granularity, in terms of different transaction

15 products, which argue -- non-bank transaction

16 products, the use, specifically, of check

17 cashing, of remittance services, of non-bank

18 money orders, the use of some of the -- we added

19 some new products, new services, new transaction

20 services, non-bank transaction services, like

21 peer-to-peer payments, and also bill payment

22 services, through services such as Western Union.

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1 We've added, also, additional

2 information that you can layer on to segment more

3 finely these different groups. We have new

4 information that you will hear about shortly on

5 the frequency of use of these transaction

6 services, non-bank transaction services, whether

7 they're used barely or often or sometimes. I do

8 want to note that all the data that we had

9 previously used to categorize households as being

10 under-banked are still available. So if groups

11 were interested in categorizing it for their own

12 internal analysis purposes, you're still able to

13 do that. Hopefully, that helps answer your

14 question.

15 MEMBER MINTZ: Thank you.

16 MS. CHU: Thank you. Raphael.

17 MEMBER BOSTIC: Thank you. Just very

18 quickly, I noticed that the numbers of unbanked

19 actually went up for Native Americans over the

20 period. Do you have any idea about what's

21 driving that?

22 MS. CHU: Jeffrey.

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1 MR. WEINSTEIN: We did look at whether

2 the changes in the unbanked rates were -- I have

3 to remember exactly what the results were for

4 that. Let me just take a -- taking a look at the

5 figure for that. From 2017 to 2019, the unbanked

6 rate among American Indian or Alaska Native

7 households fell from 18 percent to 16.3 percent. 

8 That difference was not statistically

9 significant. It did -- from '15 to '17, it rose

10 from 15.3 percent to 18 -- 15.3 percent to 18

11 percent. I do not remember if that difference

12 was significant. As you can imagine, the sample

13 size tends to be smaller for American Indian or

14 Alaska Native households. So we would need a

15 larger sample, probably, to better -- to see if

16 -- for that to be significant, the sample would

17 have to be larger. In that case, the drop was

18 not significant from 17 to 19.

19 MEMBER BOSTIC: Thank you.

20 MS. CHU: It does not look like we

21 have any more raised hands. Alden and Raphael,

22 I'd just like you to know that your hands are

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1 still raised. Jeffrey, please continue.

2 MR. WEINSTEIN: Okay, great. Thanks,

3 Karyen. Thank you for all your questions. The

4 next section is going to focus on banked

5 households, specifically bank account access

6 methods, bank branch visits, and satisfaction

7 clarity. This figure shows the primary method

8 that banked households use to access their bank

9 accounts in the past 12 months. We see that

10 between 2017 and 2019, use of mobile banking more

11 than doubled, from 15.6 percent to 34 percent, if

12 we look at the last set of bars. Use of online

13 banking declined considerably, from 36 percent to

14 21 percent -- excuse me, from 36 percent to 22.8

15 percent if we look at the second-to-last set of

16 bars. Use of bank tellers declined modestly.

17 If we look at the first set of bars,

18 use of bank tellers as a primary method of

19 account access declined from 24.3 percent in 2017

20 to 21 percent in 2019. We find that these

21 changes occurred broadly across segments of the

22 bank population. Additionally, even groups with

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1 lower use of mobile banking in 2017 exhibited

2 large increases in use of this method. For

3 example, among rural households, 11.2 percent

4 used mobile banking as the primary method of

5 account access in 2017. That percentage more

6 than doubled to 24.3 percent in 2019.

7 This slide discusses bank branch

8 visits. We know that some households may rely on

9 bank branches for activities other than accessing

10 an account, such as resolving a problem or asking

11 about products or services. In 2019, 83 percent

12 of banked households spoke with a teller or other

13 employee in person at a bank branch, that is

14 visited a bank branch at least once in the past

15 12 months. This is down slightly from 86 percent

16 in 2017. We look at the left-most two bars and

17 just invert them.

18 The share of household -- I'm sorry,

19 the frequency of bank branch visits declined

20 somewhat between 2017 and 2019. We can see, if

21 we look at the last two bars, the share of banked

22 households that visited a branch ten or more

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1 times declined from 35.4 percent in 2017 to 28.4

2 percent in 2019. Whereas, the share of banked

3 households that visited a branch one to four

4 times, if you look at the second set of bars,

5 increased from 30.8 percent in 2017 to 36.3

6 percent in 2019.

7 Continuing to look at bank branch

8 visits, we see from this graph that bank branch

9 visits were prevalent even among banked

10 households that used online or mobile banking as

11 their primary method of account access. For

12 example, if we look at the tan bars on mobile

13 banking, the tan bars indicate that among banked

14 households that used mobile banking as their

15 primary method, about 4 in 5, 79.9 percent,

16 visited a bank branch at least once in the past

17 12 months, and about 1 in 5, 18.8 percent,

18 visited ten or more times.

19 As with unbanked households, there

20 were also questions on satisfaction and clarity

21 -- new questions on satisfaction and clarity for

22 banked households. These questions asked banked

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1 households about their satisfaction with their

2 primary bank and their perceptions of how clearly

3 their bank communicates account fees. We find

4 that almost all bank households were satisfied

5 with their primary bank and thought that their

6 bank communicated account fees clearly. 

7 Specifically, 97.3 percent were very or somewhat

8 satisfied with their primary bank, and 92.1

9 percent thought their bank communicated account

10 fees very or somewhat clearly.

11 We also find that satisfaction and

12 perceptions of clarity on fees were consistently

13 high across different population segments. 

14 Finally, we find that households where income

15 varied a lot from month to month were the

16 population segment with the lowest satisfaction

17 and the lowest perception of clarity on fees. 

18 (Simultaneous speaking.) 

19 MR. WEINSTEIN: Okay, yes, we'll see if

20 we have questions.

21 MS. CHU: I do not see any raised

22 hands. Going once. Going twice. All right,

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1 Jeffrey, please continue.

2 MR. WEINSTEIN: Okay. I actually now

3 want to turn the presentation over to Mark, who's

4 going to discuss -- who's going to continue the

5 discussion, starting with non-bank financial

6 transaction services.

7 MR. KUTZBACH: Good afternoon. My

8 name is Mark Kutzbach. I'll be talking about

9 non-bank financial transaction services. In

10 2019, the survey continued to ask about the

11 following non-bank financial transaction

12 services, whether the household used that service

13 in the last 12 months. These were money orders,

14 check cashing, and international remittances. 

15 The 2019 survey also included new questions about

16 the use of the following non-bank financial

17 transaction services.

18 First, bill payment services, such as

19 offered by Western Union or MoneyGram. These are

20 services that have a capability for someone to

21 pay bills using cash at a physical location. 

22 Second, peer-to-peer or person-to-person, we'll

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1 call it P2P payment services. This is the use of

2 a website or app to send or receive money inside

3 the United States.

4 Examples of that are PayPal, Venmo,

5 and Cash App. These providers usually require

6 having a bank account, a prepaid card, or a

7 credit card to access that service. That varies

8 by provider. This figure shows the use of

9 specific non-bank financial transaction services

10 in 2019. The first three of these, money orders,

11 check cashing, and bill payment services, are

12 services that a household might use in lieu of

13 some of the services offered by a bank account. 

14 This figure is for all households.

15 For those three services, 11.9 percent

16 of households used money orders, 5.5 percent used

17 check cashing, and 4.9 percent used bill payment

18 services. Altogether, the lowest bar on this

19 figure shows the percent of households using at

20 least one of money order, check cashing, or bill

21 payment services in 2019, and 17.2 percent of

22 households used at least one of those. Also, 5.5

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1 percent of households used international

2 remittances, and about a third, 31.1 percent of

3 households used peer-to-peer payment services.

4 I'm now going to speak a little bit

5 about the characteristics of households using

6 these services. Money orders, check cashing, and

7 bill payment services have similar patterns of

8 use across population segments. The use of money

9 orders, check cashing, and bill payment services

10 was higher among lower income, less educated,

11 younger Black, Hispanic, and American Indian or

12 Alaska Native households and households that had

13 volatile income from month to month. In

14 particular, I'd like to speak about one of our

15 new services that we asked about, peer-to-peer

16 payment services. The users of this service were

17 substantially different from the households using

18 other known bank financial transaction services.

19 Use of peer-to-peer services was

20 higher among households with income over $75,000

21 a year, college educated households, and younger

22 and middle-aged households. The population

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1 segments using peer-to-peer services were

2 generally quite different than money order, check

3 cashing, and bill payment services. One group

4 that was in common in both is younger households. 

5 This figure shows the changes over time in the

6 use of money orders, check cashing, and

7 international remittances for all households.

8 These are the three non-bank financial

9 transaction services that we asked about in 2015,

10 2017, and 2019. From 2017 to 2019, money orders

11 and check cashing declined in use, while use of

12 international remittances increased. These

13 changes occurred across most segments of the

14 population. When we control for changes in

15 socioeconomic characteristics of households

16 during this period, the differences substantially

17 remain.

18 The 2019 survey also included new

19 questions about the frequency of use of non-bank

20 financial transaction services. For households

21 that used non-bank money orders, check cashing,

22 and bill payment services and international

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1 remittances, there was a follow-up question of

2 whether they used that service often, sometimes,

3 or rarely. This figure shows the percent of all

4 households using each of these services often,

5 sometimes, or rarely. You can see, with the

6 money orders -- that's the set of bars on the

7 left, there was a bimodal distribution, 4.4

8 percent of households used money orders often,

9 2.9 percent used them sometimes, and 4.6 percent

10 used them rarely.

11 That bimodal nature was largely

12 characteristic of banked households. Unbanked

13 households tended to use money orders often. For

14 the other three services, check cashing, bill

15 payment services, and international remittances,

16 there was a more even distribution of frequency

17 of use.

18 Also, tying in with some of the

19 responses that Jeffrey discussed earlier, banked

20 household perceptions of clarity of their bank's

21 communication about account fees, we find that

22 households that were very or somewhat clear on

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1 their bank's communication about account fees

2 tended to have lower use of non-bank financial

3 transaction services.

4 Conversely, households that were not

5 very clear or not at all clear on their bank's

6 communication on account fees tended to have

7 higher use of non-bank financial transaction

8 services. If you look at the lowest two bars,

9 households that were very or somewhat clear --

10 that thought their bank communicated very or

11 somewhat clearly about account fees, 14.7 percent

12 of those used either money order, check cashing,

13 or bill payment services, while among households

14 that were not very clear, or that thought their

15 bank's communication about account fees was not

16 very clear or not clear at all, 20.1 percent of

17 those used a non-bank financial -- used money

18 order, check cashing, or bill payment services.

19 Interestingly, we also see this

20 pattern among peer-to-peer payment services, even

21 though the population segments using that service

22 are somewhat different than the population

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1 segments using money orders, check cashing, or

2 bill payment services. I'd like to pause for any

3 questions about non-bank financial transaction

4 services.

5 MS. CHU: If you have any questions,

6 please use the raise hand feature of WebEx. I

7 don't currently -- oh, Jonathan Mintz.

8 MEMBER MINTZ: Thank you. My question

9 is just whether or not this information -- the

10 data's broken out as we're seeing it on this

11 presentation between those who are banked and

12 those who are unbanked or overall? I apologize

13 if you said that and I missed it.

14 MS. CHU: I'm sorry; when you mean

15 broken out, do you mean is it disaggregated in

16 the report or in the raw data?

17 MEMBER MINTZ: I'm just wondering if

18 the data that we're seeing in this presentation

19 reflects everybody or is just those who are

20 unbanked or just those who are banked?

21 MS. CHU: What you're seeing reflects

22 everybody. For example, in this particular one,

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1 this is actually just banked households. This

2 data reflects -- these data reflect everyone.

3 MR. KUTZBACH: In both of those cases,

4 as well as this figure that Karyen is showing

5 now, the report breaks out usage by banked and

6 unbanked households.

7 MEMBER MINTZ: Got it. Thank you so

8 much.

9 MS. CHU: Right. We have more detail. 

10 In the report, we always break out usage by

11 different household character stakes, and then

12 also bank account ownership. With the amount of

13 time we were allotted, we were trying to maximize

14 the amount of topics we could cover. I see no

15 other questions. Go ahead, Mark.

16 MR. KUTZBACH: Yes. Now I'm going to

17 talk about the use of bank and non-bank credit. 

18 The 2019 survey examined household use of bank

19 and non-bank credit, focusing on products

20 households may use to address cash flow

21 imbalances, unexpected expenses, or temporary

22 income household shortfalls.

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1 A household is considered to have used

2 bank credit if it had at least one of the

3 following in the last 12 months, use of a Visa,

4 MasterCard, American Express, or Discover credit

5 card, or a personal loan or line of credit from a

6 bank.

7 A household is considered to have used

8 non-bank credit if it used at least one of the

9 following in the last 12 months, a payday, auto

10 title loan, pawn shop loan, or a tax refund

11 anticipation loan, or if they used a rent-to-own

12 service.

13 This figure, for all households, shows

14 use of bank credit and non-bank credit from 2015

15 to 2019. There was an increase in bank credit

16 from 2015 to 2019; it increased from 67.9 percent

17 to 72.5 percent. While non-bank credit decreased

18 from 8.1 percent to 4.8 percent. The increase in

19 bank credit use and the decline in non-bank

20 credit use occurred broadly over different

21 segments of the population.

22 Bank credit use was lower among the

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1 following households: lower income, less educated

2 Black, Hispanic, and American Indian or Alaska

3 Native households, and the working age disabled. 

4 Differences by income and race/ethnicity were

5 stark.

6 This bank figure, also for all

7 households -- or for all banked households among

8 Black, Hispanic, and White households, displays

9 the use of bank credit by income level and by

10 race/ethnicity in 2019. Differences by

11 race/ethnicity persist at every income level.

12 For example, in the top set of bars,

13 that's households with less than $15,000 in

14 income, 23.5 percent of Black households and 30.3

15 percent of Hispanic households had bank credit,

16 while 45 percent of White households had bank

17 credit.

18 MS. CHU: I just want to jump in

19 really quickly. Mark, I think you meant to say

20 that this graph shows data for all households,

21 not just banked households.

22 MR. KUTZBACH: Yes, I thought I said

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1 that. Yes, this is for all households among

2 Black, Hispanic, and White households.

3 MS. CHU: Right, thanks.

4 MR. KUTZBACH: Non-bank credit use was

5 higher among the following households: lower

6 income, less educated, Black and Hispanic, and

7 working age disabled households. Households with

8 income that varied a lot from month to month were

9 more than twice as likely to use non-bank credit

10 as households with income that was about the same

11 each month. 

12 Any questions on bank and non-bank

13 credit?

14 MS. CHU: I am currently not seeing

15 any questions. Alden?

16 MEMBER MCDONALD: Yes, I just have

17 one. I notice there's a 20 basis point

18 difference on the credit, I guess, under $50,000

19 versus over 50. Was there anything in the survey

20 or anything that brought out why the larger

21 amount of difference between White customers and

22 Blacks and Hispanics? There's a 20 point

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1 difference roughly, and 50,000 is low. 

2 Am I making sense? In other words, if

3 you take a look at mean 75,000, there was an 80

4 percent bank use for Blacks, 83 for Hispanics,

5 and 91 for Whites, so roughly about the same

6 increase, a little bit more, but it became

7 significantly different, 50,000 low threshold,

8 which leads me to wonder why there were twice as

9 many.

10 MS. CHU: I --

11 MEMBER MCDONALD: Maybe you didn't

12 have it in your survey.

13 MS. CHU: Mark or Jeffrey, would

14 either one of you like to take that question?

15 MR. KUTZBACH: Yes. So, I don't think

16 we directly tried to explain that, given the data

17 that we have. There may be differences in bank

18 account ownership by race/ethnicity, or bank

19 account ownership status by race/ethnicity at

20 those levels, but all of the use of bank credit

21 is quite a bit higher at the high income level.

22 It's sort of more compressed. 

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1 Whereas, at lower income levels, given that it's

2 quite a bit lower, there's more possibility for

3 divergences. Jeffrey, do you have anything to

4 add on that?

5 MR. WEINSTEIN: Yes, I'll just add we

6 did -- so something we checked is whether -- the

7 racial/ethnic differences, overall, are extremely

8 large. We document them in the report. You can

9 see, as they're pointed out, they're very

10 different, even within income groups.

11 We did check to see whether bank

12 account ownership, as well as other socioeconomic

13 and demographic characteristics -- a very broad

14 set that are included in the base current

15 population survey, which would include things

16 like age and home ownership status and employment

17 status -- we find that the large racial and

18 ethnic differences still do persist, even after

19 accounting for these other variables.

20 This is a pretty -- the changes are

21 still pretty broad. The differences across

22 race/ethnicity are still pretty big. We also --

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1 to extend that a little bit, we also do look for

2 American Indian or Alaska Native households.

3 We don't have enough of a sample to

4 desegregate by these income categories, these

5 five, but we can do it for just -- to see above

6 and below $50,000. We did find, again, very

7 stark differences in use of bank credit at those

8 income levels, at broader income levels for that

9 population.

10 MS. CHU: Alden, did you have any

11 additional questions?

12 MEMBER MCDONALD: Thank you.

13 MS. CHU: Thank you. I see no

14 additional questions. Let me move us back to the

15 agenda. So, Mark, I think, are you presenting

16 this part?

17 MR. KUTZBACH: Yes, I'll be talking

18 about saving for unexpected emergencies or

19 expenses. In 2019, 64.2 percent of households

20 saved for unexpected expenses or emergencies in

21 the last 12 months. That's up from 56.3 percent

22 in 2015, and 57.8 percent in 2017.

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1 Households were prompted to consider

2 only funds that could easily be spent, if

3 necessary, and not retirement or other long-term

4 savings.

5 Savings rates were lower among the

6 following households, lower income, less

7 educated, older, Black, Hispanic and American

8 Indian or Alaska Native households, and working

9 age disabled households. Savings rates increased

10 broadly across population segments between 2015

11 and 2019. 

12 Rates of savings for unexpected

13 expenses or emergencies increased from 2015 to

14 2019, both for unbanked and banked households. 

15 Rates of savings for unexpected emergencies

16 continued to be much lower for the unbanked.

17 However, the proportion of unbanked

18 households that saved for unexpected emergencies

19 was higher in 2019 than in previous years. Any

20 questions about savings?

21 MS. CHU: I do not see any questions. 

22 Oh, Jonathan Mintz?

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1 MEMBER MINTZ: Sorry. On the savings,

2 can you break that out, or do you know how that

3 plays across income levels? In other words, is

4 it generally true that the tide is lifting on

5 savings, or is that actually more, in the data, a

6 reflection of disparity?

7 MS. CHU: Jeffrey, would you like to

8 take that question?

9 MR. WEINSTEIN: Yes. We have an

10 appendix table, actually, that has this

11 information, where we break out rates of saving

12 for unexpected expenses or emergencies by income

13 and race/ethnicity and a lot of other

14 socioeconomic characteristics and demographic. 

15 I'm just going to quickly find that table. 

16 So we see, in 2019, for households

17 with income of less than $15,000, 35.6 percent

18 save for unexpected expenses or emergencies,

19 compared with 78.2 percent of households with

20 income of -- excuse me, 78.2 percent of

21 households with income of at least $75,000. 

22 There are very large differences --

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1 (Simultaneous speaking.)

2 MEMBER MINTZ: Can I just ask how

3 those two numbers, then, compare to 2017, if you

4 have that in front of you?

5 MR. WEINSTEIN: I do, yes. For 2017,

6 for households with less than $50,000 in income,

7 28.9 percent save for unexpected expenses or

8 emergencies, and for at least $75,000, it was

9 73.8 percent. Both of those -- the savings rates

10 for both of those groups increased. Those

11 increases, actually, across all the five income

12 levels that we presented were all statistically

13 significant increases.

14 MEMBER MINTZ: Thanks.

15 MR. WEINSTEIN: It was pretty across

16 the board if we look at all -- if we look at a

17 larger set of demographic and socioeconomic

18 characteristics, it was pretty much across the

19 board that savings rates went up.

20 MEMBER MINTZ: Thanks again.

21 MR. WEINSTEIN: Sure.

22 MS. CHU: Thank you. Margaret?

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1 MEMBER LIBBY: Yes, thank you. 

2 Jeffrey, I'm curious if you've done a similar

3 slice looking at age?

4 MR. WEINSTEIN: Yes, we did. I can

5 get those results. So for age, again, from '17

6 to '19 -- actually, if you go back to '15 to '19,

7 savings rates increased across the board by age. 

8 We see that in 2019, among households that are 65

9 years or older, 57.1 percent saved for unexpected

10 expenses or emergencies.

11 And for -- let's say, the second

12 lowest age group, age 25 to 34, 70.7 percent

13 saved for unexpected expenses or emergencies. 

14 Pretty much, except for -- we have the lowest age

15 group, 15 to 24, 65.4 percent save for unexpected

16 expenses or emergencies, but from there, it goes

17 up when we look at 25 to 34. From that point, it

18 decreases by age. But in general, savings rates

19 are lower among older households.

20 MEMBER LIBBY: Thank you.

21 MS. CHU: Thank you. I see no

22 additional raised hands, so please continue.

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1 MR. KUTZBACH: Okay. So now, we're

2 going to give an overview of the postscript that

3 appears in the report. We have the postscript on

4 potential consequences of the COVID-19 pandemic

5 on the unbanked rate.

6 And we write this in light of the --

7 the data that we're reporting is from 2019 in the

8 survey, which is a substantially period of time

9 in the economy and use of financial services,

10 most likely, than the present and the time when

11 this report will come out.

12 There is higher rates of unemployment

13 and differences in the way people are using and

14 having access to financial services. We expect

15 the COVID-19 pandemic is likely to contribute to

16 a rise in the unbanked rate.

17 Changes in socioeconomic circumstances

18 of U.S. households, over time, have been

19 associated with changes in the unbanked rate, as

20 we've reported in previous versions of this

21 survey report. For example, approximately two

22 thirds of the decrease in unbanked rate between

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1 2011 and 2019, a decrease from 8.2 percent to 5.4

2 percent, was associated with changes in

3 socioeconomic circumstances of U.S. households,

4 including, for example, income and variability in

5 income. 

6 Unbanked rates have been consistently

7 high among certain segments of the population,

8 including the unemployed and those with volatile

9 income.

10 For example, the unbanked rate has

11 been about four times higher for unemployed

12 households and about 50 percent higher for --

13 that's compared to employed households -- and

14 about 50 percent higher for households with

15 volatile income from month to month, compared

16 with households that have stable income from

17 month to month.

18 In the 2013 survey, about a third,

19 34.1 percent, of households that became unbanked

20 in the past 12 months experienced either

21 significant income loss or job loss that

22 contributed to their becoming unbanked.

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1 Taken together, these data suggest

2 that the unbanked rate is likely to raise from

3 its level just before the pandemic and from the

4 level reported in the 2019 survey results. 

5 I'm going to hand it over to Jeffrey

6 now for continuing discussing the postscript.

7 MR. WEINSTEIN: Okay, thank you, Mark. 

8 This slide discusses potential pandemic-related

9 challenges in conducting financial transactions. 

10 Social distancing guidelines instituted in

11 response to the pandemic may make the use of

12 cash, paper checks, and money orders -- that is

13 paper instruments -- to conduct financial

14 transactions particularly challenging.

15 If we look at the 2015 and 2017

16 surveys, those surveys found that use of paper

17 instruments for paying bills and receiving income

18 in a typical month was much more common among the

19 unbanked. As an example, 66.1 percent of

20 unbanked households in 2017 used cash to pay

21 bills, compared with 13.4 percent of banked

22 households.

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1 If we look at income receipt, paper

2 check or money order and cash were the two most

3 common ways that unbanked households received

4 income, while direct deposit into a bank account

5 was, by far, the most common way for banked

6 households.

7 This distinction is important because

8 reliance on paper instruments may make it harder

9 for households to receive government relief

10 efforts. For example, households without direct

11 deposit may experience delays in receiving

12 government stimulus payments, such as having to

13 wait for a paper check or prepaid card to be

14 mailed. Now, moving on to bank branch visits,

15 social distancing guidelines may make bank branch

16 visits more challenging.

17 In 2019, nearly half of banked

18 households, 46.8 percent, visited a branch five

19 or more times in the past 12 months, which

20 suggests that branches and the range of services

21 they provide play an important role.

22 Bank branch visits were more prevalent

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1 among certain segments of the bank population,

2 including rural households, older households, and

3 households with volatile income. And some

4 households may find it difficult to reduce their

5 reliance on branches.

6 For example, rates of home Internet

7 and smart phone access were lower among rural

8 households, suggesting that it may be difficult

9 for these households to switch to other methods

10 of safe account access, like online or mobile

11 banking. 

12 And then finally, the economic

13 ramifications of the pandemic may particularly

14 affect households without an adequate savings

15 cushion or without access to responsible,

16 affordable credit. 

17 In 2019, 35.8 percent of households

18 did not save for unexpected expenses or

19 emergencies. As a result, many households may

20 need credit to handle unexpected changes in

21 income and expenses. However, in 2017, we found

22 that 19.7 percent of households likely did not

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1 have a credit score, which could make it harder

2 for these households to obtain credit. 

3 Now we're just about done, there's one

4 more slide after this. I'll just ask are there

5 any questions about the postscript?

6 MS. CHU: I am not seeing any

7 questions. Please continue.

8 MR. WEINSTEIN: Okay, great. I'm now

9 going to conclude with a plug to How America

10 Banks. 

11 So How America Banks is a new website. 

12 It contains a link to economicinclusion.gov,

13 where you can download the full report, the

14 executive summary, with the preface and

15 postscript, and a set of appendix tables -- a set

16 of many appendix tables, I will say -- that, in

17 part, give key estimates at the state level and

18 for larger metropolitan statistical areas, like

19 Karyen hinted at at the beginning of the

20 presentation. 

21 Also available are tools that allow

22 you to create custom data tables and custom

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1 charts for a variety of variables and

2 geographies, as well as five-year estimates of

3 unbanked rates; and these estimates combine data

4 from three consecutive surveys.

5 One of the benefits of five-year

6 estimates is that they're based on a larger

7 sample than single-year estimates, allowing us to

8 provide more estimates for more metropolitan

9 statistical areas than single-year estimates, and

10 also having estimates more widely available for

11 sub-populations, such as low-income households

12 and Black and Hispanic households.

13 Finally, what's also available on

14 economicinclusion.gov are links to the full

15 datasets, data documentation, and a form to

16 subscribe to FDIC updates. 

17 And that concludes our presentation. 

18 Thank you. I'll turn it back over to Karyen.

19 MS. CHU: Thank you, Jeffrey. So

20 we're happy to take questions on any part of the

21 survey findings presentation, or we're happy to

22 turn the time back to Jonathan. And I am not

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1 seeing any raised hands. Jonathan?

2 MR. MILLER: Margaret, is your hand up

3 from earlier, or do you have another question?

4 Can she hear me?

5 MEMBER LIBBY: Hi, Jonathan. Sorry,

6 it was still up. It is down now.

7 MR. MILLER: Thank you. Well, let me

8 say thank you to Karen, to Jeffrey, and to Mark. 

9 We are unbelievably ahead of schedule. And we're

10 still waiting for one of the panelists for the

11 next panel to join the call, so why don't I --

12 I'm going to suggest that we take a break until

13 3:35, which is just under -- just about under 15

14 minutes.

15 Why don't we all come back on at 3:35

16 and pick it up from there? Thanks again to the

17 panelists and see everybody in a little bit more

18 than ten minutes.

19 (Whereupon, the above-entitled matter

20 went off the record at 3:24 p.m. and resumed at

21 3:37 p.m.)

22 MR. MILLER: All right, welcome back,

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1 everybody. Again, thanks to Karyen and her staff

2 for a terrific panel. They gave us a good

3 picture of the world as it existed pre-COVID. 

4 This panel is now the financial status and health

5 of American households after the COVID crisis hit

6 us. To take us through this panel, moderate this

7 panel, I'll turn it over to Keith Ernst. Most of

8 you know Keith pretty well, at this point.

9 Keith serves as the Associate Director

10 of Consumer Research and Exam Analytics at the

11 FDIC. He leads a team of highly capable staff

12 that provides analytic support to FDIC

13 examination staff, and provides policy analysis,

14 economic inclusion topics, and other supervisory

15 policy topics, as well. Keith, thank you.

16 MR. ERNST: Thank you, Jonathan, and

17 good afternoon, Chairman McWilliams, Director

18 Gruenberg, members of the Committee. It's a

19 privilege to be back with you, albeit it

20 virtually, this afternoon. In this panel, we're

21 going to try to build on the previous asset.

22 And I say that in the sense that we

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1 will be sharing analyses and perspectives on data

2 collected since the onset of the pandemic. We

3 had the postscript in the last session, where our

4 presenters started to think ahead about the

5 implications of the pandemic for the issues this

6 Committee deals with. And in this panel, we'll

7 present some additional information to help us

8 push that conversation a little bit further.

9 We look forward to a robust discussion

10 period with this panel at the conclusion of our

11 presentations. And speaking of presentations, I

12 will give a brief introduction right now of our

13 very talented crew, who's generously agreed to be

14 with us this afternoon.

15 We will hear first from Jason Brown,

16 who's the Assistant Director for Research at the

17 Consumer Financial Protection Bureau. He'll be

18 discussing researching on consumer credit trends.

19 Fiona Greig, Managing Director and

20 Director of Research at the JPMorgan Chase

21 Institute, will look at household spending,

22 liquidity, and how public programs like

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1 supplemental unemployment insurance show up in

2 household finances.

3 Rob Levy, the Vice President of

4 Research and Measurement at the Financial Health

5 Network, will talk about new data they released,

6 if I recall correctly, just this week on the

7 financial wellbeing of consumers. 

8 And Kevin Klowden, Executive Director

9 of the Center for Regional Economics and

10 California Center at the Milken Institute, will

11 offer some observations about how the limits of

12 our nation's infrastructure have made it more

13 difficult to meet the challenges of our current

14 conditions.

15 Now, I think you'll find all these

16 presentations useful. I want to just acknowledge

17 right up front, there is no perfect data that

18 exists that can fully inform our perspective on

19 how the challenging circumstances consumers are

20 encountering are changing the ways they relate to

21 and use financial services. That being said, I

22 do think the presentations we'll hear are

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1 incredibly helpful and relevant.

2 Even with that limitation

3 acknowledged, I want to encourage members of the

4 Committee, as you hear these presentations, as

5 you take this information in, to think both about

6 today and about how the FDIC should be training

7 its focus for supporting economic inclusion in

8 the banking system moving forward. Appreciate

9 everybody's flexibility with our virtual format. 

10 Similar to the past presentation, we will hold

11 questions until a designated period. In our

12 case, it will be at the end of the four

13 presentations. They should go by relatively

14 quickly, and I'm anxious, as I'm sure members of

15 the Committee are, to get to the discussion

16 point.

17 And at that point, I'll be told who

18 has raised their virtual hand and will recognize

19 people, as best I can, in order that I'm told. 

20 I'll also, as has been my practice with this

21 Committee, try to give a bit of a heads up of the

22 order I'm seeing in my queue. So, with that

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1 brief introduction and context for this

2 discussion, I'd like to hand the floor off to

3 Jason with my appreciation.

4 MR. BROWN: All right, thank you,

5 Keith. Thank you for the opportunity to present

6 some of the recent work we've been doing at the

7 CFPB to understand the effects of the pandemic on

8 consumer credit trends.

9 I look forward to hearing the other

10 presenters and to the discussion. Shannon, I

11 think we can move on to the next slide. Most of

12 our pandemic work makes use of our consumer

13 credit panel, which is the 1 in 48 random sample

14 of de-identified consumer credit records from one

15 of the three nationwide consumer reporting

16 agencies. It includes approximately 5 million

17 credit records and is updated monthly, so it's a

18 useful tool of looking at consumer financial

19 well-being, because it's updated so frequently

20 and has granular administrative data at the

21 individual level.

22 With these data we've written two

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1 public reports, so far, that I'm going to draw

2 from for this presentation. First, in early May,

3 we looked at credit applications on a

4 week-by-week basis since the start of March to

5 see how credit demand, as sort of proxied by

6 applications, has changed since the pandemic.

7 Then at the end of August, we looked

8 at a broader suite of metrics on how consumers

9 are faring. So our plan at the bureau is to keep

10 looking at these metrics from the reports going

11 forward and reporting on them to keep people

12 abreast on what we're seeing.

13 Okay, Shannon, we can move on. Okay,

14 so this first chart is, as I said, credit demand

15 as proxied by credit applications. We call that

16 credit demand because it precedes the actual

17 decision to grant a loan. So this chart is based

18 on the analysis of our credit applications

19 report. It's updated to the end of June. What

20 you're looking at is the change in credit

21 inquiries, by market, compared to the first week

22 in March.

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1 What we do is we cold-comp some

2 seasonal variation to try to get at how much

3 credit applications have changed in each market

4 compared to what we would have expected. And the

5 markets we look at are the major ones, auto, new

6 mortgage, revolving credit. We don't have

7 student loan on here, of course. Then there's

8 another category, which includes things like

9 personal installment loans. 

10 When we first looked at this at the

11 end of March, we saw a sharp drop in applications

12 in every market, over 50 percent in the case of

13 auto.

14 But then a funny thing happened: the

15 auto market rebounded. It was close to

16 historical levels by the end of June. You can

17 see that in the first panel. 

18 Then new mortgage applications

19 surpassed historical levels. Meanwhile,

20 revolving credit card applications fell and have

21 stayed low. Auto and home purchases are

22 typically done in person, so we can see why they

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1 fell in March, but have since rebounded since

2 social distancing measures were relaxed. On the

3 other hand, credit card applications typically

4 are not done in person, so we don't think that

5 social distancing is directly responsible for

6 that sustained drop in applications.

7 Something else, we think, is driving

8 that. Shannon, we can move on to the next slide.

9 Looking more closely at credit cards,

10 we see that credit card balances have fallen

11 considerably. This is from our second prior

12 report. This is the year over year change in

13 monthly credit card balances.

14 Starting in April, they plunge, then

15 they continue to fall, even through June, down 10

16 percent from June of last year. As we've looked

17 at more recent data since then, it's continued to

18 fall. Some of the other panelists may have -- I

19 think will have more data that can shine more of

20 a light on this at the household level.

21 I think Fiona's group has done some

22 really interesting work that can get at some of

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1 the income and spending dynamics. But from macro

2 data, we saw personal income shoot up in April

3 with the CARES Act and the personal savings rate

4 remaining elevated. 

5 One thing I will point out is that we

6 did not see a lot of geographic differences based

7 on median income or race/ethnic composition, but

8 we did see the biggest drop in credit card

9 balances among those with the highest credit

10 scores, which may have indicated that declines in

11 balances were a result of the decline in

12 discretionary purchases.

13 Our takeaway from this is that it

14 doesn't look like consumers are accumulating

15 credit card debt to stay afloat financially. 

16 Again, some of the other panelists will provide

17 greater detail on that, as well. Shannon, I

18 think we can move on.

19 Turning to access to credit, we looked

20 at credit limits for credit cards. What you're

21 seeing here is the cumulative change in total

22 credit limits across all existing credit card

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1 accounts, by credit score groups, since the start

2 of 2019.

3 They have been growing for all credit

4 score groups, except for deep sub-prime, which is

5 in green; that's basically an instant access. 

6 Then in March of this year, at the time of the

7 pandemic, they froze. They stopped growing. 

8 It's a noticeable break, I should say, but a

9 little perspective is due here. 

10 The very slight decline across all

11 credit score groups amounts to one tenth of 1

12 percent of average credit limits. Just for the

13 sake of comparison, in the first quarter of the

14 great recession, credit limits fell by 7 percent,

15 so a much larger drop.

16 We also look at account closures, and

17 not much happened there, either. There wasn't

18 much of a difference in Q1 2020 from Q1 of 2019. 

19 Most of the closures were from inactivity,

20 particularly among the super prime and prime

21 borrowers.

22 Shannon, I think we can move to the

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1 next slide. Now, this slide is about some of the

2 measures to help borrowers during the pandemic. 

3 There were a number of measures put in place to

4 help borrowers.

5 For instance, the CARES Act required

6 lenders to suspend principal and interest on

7 federally held student loans until September

8 30th, and that's been extended to the end of the

9 year. Mortgage borrowers with federal or

10 GSE-backed mortgages were allowed to apply for

11 forbearance for 180 days up to 360 days. There's

12 not anything in the CARES Act for auto and credit

13 card, but financial institutions do have the

14 discretion of providing payment assistance.

15 What we do see here, across markets,

16 is an increase in assistance, but I would point

17 out that you should look at the scale of the Y

18 axis, because they are different for each market,

19 and how we define assistance, because assistance

20 is defined in different ways for different

21 products. We define it as zero payment due,

22 despite a positive balance, just to be able to

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1 get that apples to apples comparison. 

2 Looking at each market, at its peak in

3 May, a little over 3 percent of auto loan

4 accounts reported assistance. Nearly 6 percent

5 of first-time mortgages received assistance in

6 June, and well over 80 percent of student loans

7 were getting assistance, while a little over 3

8 percent of credit card accounts were also getting

9 assistance. 

10 Across all markets, except for student

11 loans, we did see accounts transitioning out of

12 assistance, and we did see the likelihood of

13 assistance being higher in minority --

14 majority/minority census tracks and the lowest

15 income census tracks and in the areas hardest hit

16 by the unemployment shock and by COVID cases. So

17 we are seeing assistance going to places that

18 might be hardest hit.

19 But that's not to say that the

20 assistance is commensurate with the need. This

21 may actually be something that Rob even gets into

22 because their report touches on that a little

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1 bit. Okay, so I think we can move on to the next

2 slide, the last slide.

3 This is looking at delinquency, so, of

4 course, a good measure of distress. What the

5 charts show is that the transition into

6 delinquency, which, in general, means going from

7 current to 30 days past due, that's the green

8 line and the transition into increasing

9 delinquency, which is the orange line meaning

10 more delinquent this month than it was in the

11 last month.

12 Unsurprisingly, given the blanket

13 assistance provided across almost all student

14 loan accounts, delinquency fell to nearly zero in

15 that market. For the other markets, the trend

16 isn't quite as clean or as abrupt, but

17 delinquency and worsening delinquency rates did

18 fall from January through June. And it's not

19 shown here, but looking across credit score

20 groups, these rates fell the most for lowest

21 credit score borrowers.

22 Again, perhaps seeing relief hitting

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1 those most likely to be hit. That's all I have

2 today. Look forward to the discussion. Going to

3 kick it over to Fiona.

4 MS. GREIG: Thank you, Jason. 

5 Shannon, can we skip forward? Great. Thank you

6 for having me. I'm going to be speaking about

7 several papers that we have been publishing over

8 the last while, in the first instance, on

9 aggregate trends in consumer behavior, so income,

10 spending and savings, and then secondly, I'm

11 going to be looking at the impacts of

12 unemployment insurance benefits on spending and

13 savings.

14 Just to characterize the data that

15 we're using here, first of all, we're working

16 with a bunch of teams of colleagues at University

17 of Chicago and Princeton. And the data that

18 we've got to bring to bear here is obviously the

19 Chase portfolio data, which I think gives us a

20 high frequency view of spending, income, and

21 savings for families. Then also, we can observe

22 some covariance, like industry of employment,

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1 age, race, that sort of thing, some of which I'll

2 share with you.

3 I think the key thing here is that we

4 think this sample spans the income spectrum. 

5 That's quite helpful, given that we know that the

6 job losses have been disproportionately affecting

7 low income families. Next slide. If we just

8 take a very broad view -- some of these charts,

9 you'll notice, go through the end of May.

10 I'll narrate how they continue, but I

11 was only able to share with you that which we've

12 published. Obviously, initially, there was a

13 huge drop in spending. This is no surprise. 

14 Notably a larger drop in credit card spending, to

15 the tune of 40 percent, compared to debit card

16 spending.

17 Since then, spending has recovered,

18 but I think just thinking about the magnitude of

19 this spending drop, it was so large, it was

20 eight-fold larger than what we normally see, in

21 terms of a spending drop, when people lose their

22 jobs. So that tells us that the initial spending

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1 drop was very much due to the pandemic, itself,

2 as opposed to the original rounds of job losses. 

3 Next slide. When we compare the

4 spending trends by income quartile, we see that

5 actually, spending has recovered more quickly for

6 low income families.

7 This is surprising, in light of the

8 fact that we know that the job losses have

9 disproportionately affected low income families. 

10 Right? So labor income for low income families

11 has gone down the most, and yet spending has

12 recovered the most quickly for low income

13 families.

14 Now, this could be a couple of things. 

15 It could be high income families -- a higher

16 share of their budget share is on discretionary,

17 which was cut more. That's part of the picture. 

18 Maybe this is a geographic story, in that high

19 income families tend to live in cities and places

20 where the lockdowns may have been more severe. 

21 That could be part of the picture. 

22 But what we believe to be really

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1 playing a role here is the CARES Act. And you

2 can start to see this in the second vertical

3 line, which notes April 15th. That's where the

4 vast majority of the economic impact came and

5 started to get dispensed, and you see a large

6 spike in spending, particularly among low income

7 families, for whom $1,200 or more would have been

8 a material, significant sized, chunk. 

9 Okay, next slide. For a subset of our

10 sample, we're able to figure out where they work

11 and what industry they work in, and I want to

12 focus your attention on two of these lines. The

13 purple line, the top line, is grocery workers,

14 their spending dropped the least. Their hours

15 dropped the least. Their wages dropped the

16 least.

17 If anything, they were probably

18 working overtime and continuing to incur

19 job-related expenses, and so it's no surprise

20 that workers in the grocery sector, their

21 spending recovered most quickly and even

22 potentially was elevated.

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1 But the next line, the blue line,

2 which represents people working in the clothing

3 and department store industries, that's

4 surprising that their spending recovered so

5 quickly. This is a sector where we know the job

6 losses have been vast. And this is starting to

7 tell us that it's not just the economic impact

8 payments that is affecting the spending of this

9 group, but also likely unemployment insurance. 

10 Let's move to the next slide. The

11 next charts I'm going to show you are about

12 balances. And here, I'm showing you levels of

13 checking account balances on the left and percent

14 change in those balances on the right.

15 What we're observing is growth, lots

16 of balance growth, to the tune of 30-40 percent,

17 and, indeed, larger balance growth and percentage

18 terms for low income families. The dollar value

19 growth is actually higher for higher income

20 families, but the percentage growth is larger for

21 low income families.

22 That's probably because a $1,200 check

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1 is a larger percent increase if you start out

2 with $2,000 than if you start out with $4,000. 

3 But it just goes to show that was a material

4 boost to the savings buffers that families had.

5 The trend that we continue to see from

6 here on out, actually, is slower, but leveling,

7 all the way through August. August starts to

8 look like it's dipping, but we're not sure if

9 we're seeing every last penny in our August data

10 yet. Consider this sustained from here. Next

11 slide, I'm going to show you this by, again,

12 industry of employment. 

13 And just to focus, again, your

14 attention on the blue and the purple, balance

15 growth was high for grocery workers. That's

16 likely because they're relatively low income

17 workers and probably had low balances to begin

18 with.

19 But notably, the balances of workers

20 in the clothing and department store industry are

21 increasing when the EIP hits, and then increasing

22 from there. That starts to suggest that it is

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1 not just the EIP, but again, unemployment

2 insurance benefits that are helping to boost

3 those savings even while they're unemployed.

4 Next slide. So this puzzle that I

5 teed up in the beginning, whereby job losses and

6 labor income characterized in the light blue bars

7 dropped the most for low income families, and yet

8 spending has recovered the most for low income

9 families, seems like it is resolved when we take

10 government transfers into account.

11 When we take those government

12 transfers into account, then total income

13 actually is increasing for low income families,

14 and it's relatively stable for high income

15 families. This also tells us that the source of

16 that savings growth is very different for low

17 income families than it is for high income

18 families. For low income families, this implies

19 that the savings growth is coming from government

20 benefits that are not fully being spent.

21 Whereas, for high income families, the

22 savings growth is due to continued cuts to

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1 spending or the spending that has not yet

2 recovered. 

3 Okay, so now, on the next slide, I'm

4 going to shift to the benefit story. I'm going

5 to feature -- well, I think there are really

6 three big parts of the CARES Act, in terms of how

7 this directly impacted families. I'm featuring

8 two here: the economic impact payments, which

9 were mostly dispensed in April, and this is not

10 my chart, but I found it super helpful, in terms

11 of understanding when these benefits were

12 dispensed, and also how big they are. Right? 

13 And so you can see this is a cumulative view. 

14 The green bars are almost fully stacked, even by

15 the end of April. Right?

16 We've almost fully dispensed the EIP. 

17 But unemployment insurance is a weekly or

18 bi-weekly payment, continues, obviously, on. And

19 by the end of July, the federal government had

20 dispensed as much or more in UI as it had in EIP. 

21 You can think of these programs as being,

22 actually, comparable in size, first the EIP, and

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1 then the UI.

2 One that's not reflected here is

3 forbearance, which Jason talked about, but is

4 obviously another release valve for folks that

5 isn't a cash infusion. Next slide. Another way

6 to think about the role of unemployment insurance

7 is this chart, which is BEA data.

8 Never before has unemployment

9 insurance, as a share of total income, barely

10 ever budged above 1 percent. As of the end of

11 June, it was 7 percent of total income. That's

12 for three reasons: number one, historically high

13 unemployment rates; number two, the actual $600

14 for the level of benefits; and number three, the

15 PUA, which extended the eligibility of this

16 program to self-employed, contingent workers, and

17 people who had limited work histories.

18 On the next slide I'm showing you what

19 we normally expect to see, in terms of the

20 spending trends of people who lose their job and

21 receive unemployment insurance. We normally see

22 a drop in spend. This is because unemployment

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1 benefits normally don't fully replace that

2 pre-job loss earning. Right? It's more on the

3 tune of 50 to 60 percent of their wages is what

4 they're receiving in UI.

5 Of course, we see steeper cuts in

6 spending among Black and Hispanic families, who

7 tend to have less of a cash buffer when they lose

8 a job. So contrast this picture with the next

9 slide.

10 I'm not going to show you race cuts,

11 but just here is -- the orange line is showing

12 what happened to spending relative to baseline of

13 the unemployed, people who received benefits,

14 compared to everybody else, who we don't observe

15 receiving benefits.

16 And, first thing, in the weeks leading

17 up to that first benefit check, the spending of

18 the unemployed is dropping more than the

19 employed. They are really cutting back.

20 Above and beyond the impacts of the

21 pandemic, they are likely experiencing some

22 hardship. They are really cutting back. 

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1 However, when that check starts to arrive, their

2 spending soars. It soars beyond what we would

3 have expected to see based on the trends of the

4 employed, whose spending is still way down. It's

5 soaring above their own baseline to the tune of

6 roughly 10 percent above their own baseline. So

7 this is really suggesting that extra $600 boost

8 is boosting people's spend considerably.

9 On the next slide, I'm going to show

10 -- this tells us two stories. This is a story of

11 a subset of our sample who all lost their job by

12 mid-April. And this is the story of what happens

13 to people's spending when they have to wait for

14 those benefits to arrive.

15 We contrast the green group -- they're

16 the people who received their benefits in March

17 -- versus the blue group, who received their

18 benefits in April, and the orange group that had

19 to wait all the way until May to receive their

20 benefits, even though they had lost their job no

21 later than April 19th.

22 You can see with each passing week,

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1 they are having to cut their spending by more. I

2 think this is a story not just about the impacts

3 of delay of UI benefits, but also of the PUA,

4 because the PUA extended benefits to people who

5 would have otherwise not gotten those benefits. 

6 And so this is probably what the spending would

7 have looked like for families who -- for workers

8 who are currently receiving PUA benefits, who are

9 contingent workers who might not have received

10 them but for the CARES Act. Next slide.

11 I'm going to conclude with a piece we

12 released last week, which tells us what's going

13 on in August. August is an important month for

14 jobless workers, because that's when their $600

15 supplement ended. What we observe is that the

16 spending of the unemployed dropped by about 14

17 percent in August.

18 That's notable because it drops,

19 actually, below the level of employed. It's

20 still roughly on par with their pre-pandemic

21 spending, so they're kind of coming back to

22 baseline, but one thing that's notable is that

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1 the last week of this data, the spending level is

2 lower than the prior week, meaning that this is

3 -- this has not yet plateaued.

4 It's still falling at the end of this

5 series. Another point, I would say, is that

6 August, we believe, is -- people would not yet

7 have been receiving lost wages assistance. We

8 think that was actually implemented starting in

9 September. And so this is showing just the

10 impact of the expiration of the $600. Finally,

11 the last slide, next slide, is showing what

12 happens to savings. So we're just showing this

13 ratio to January. Of course, everybody's savings

14 grew in February and March with normal tax

15 refunds, and then in April, with the arrival of

16 the economic impact payments.

17 But between March and July, you see

18 that the checking account balances of people who

19 were receiving UI benefits actually doubled over

20 the course of those four months. But in August,

21 alone -- in one month, alone, they had spent two

22 thirds of the additional buffer that they had

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1 accumulated over the prior four months.

2 What this tells us is that the

3 spending trends I showed you on the prior slide,

4 the 14 percent drop, is fueled, in part, by the

5 savings buffer that they had accumulated over

6 this time.

7 The 14 percent drop might just be the

8 beginning of that drop in their spending, if we

9 don't see either improvements in their labor

10 force or returning to work, or use of some other

11 release valve, like forbearance and the like. So

12 this is sort of a movie in progress, where I

13 haven't yet seen the September data, but I think

14 this very clearly shows just how important the

15 CARES Act was for jobless workers in boosting

16 both the spending and the savings of those

17 jobless workers.

18 I think that's my last slide, but

19 advance forward. Yes, this is just to summarize

20 -- I think broadly, aggregate spending has

21 rebounded, but we're still not yet at

22 pre-pandemic levels.

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1 Like I said, the role of government

2 income support has been really important and is

3 buffering against the unequal impacts that the

4 pandemic is having on families across the income

5 spectrum. So I'll conclude there. Thank you.

6 MR. LEVY: Good afternoon, everyone. 

7 My name is Rob Levy, with the Financial Health

8 Network. Thank you so much for having me. I'm

9 pleased to present the results from our U.S.

10 Financial Health Pulse 2020 Trends Report.

11 As Keith said, this is hot off the

12 presses. It was actually released two weeks ago,

13 but I'm going to sharing it with you all today. 

14 I think you all heard a little bit about

15 Financial Health Network from Jennifer earlier. 

16 The financial health is our marquee research

17 study, and we've been doing it for three years

18 now. The goal of the pulse is really to take a

19 holistic view of financial health, bringing

20 together the components of spending, saving,

21 borrowing, and planning to answer the question of

22 how financially healthy is America.

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1 That's what I'm going to tell you

2 about today. Next slide. Of course, I wanted to

3 thank our funders, as always, Flourish, the Light

4 Foundation, and AARP, and our research partners,

5 USC and Plaid. Next slide. Let's talk a little

6 bit about the methodology, and then I'll get into

7 the findings.

8 The pulse is a unique study, in that

9 it combines survey and transactional data. The

10 survey is fielded through USC's Understanding

11 America study, which is a nationally represented

12 online panel. As I said, we've been doing this

13 for three years, you can see the dates there. 

14 This year's study was over 6,400

15 respondents, so pretty broad and deep dataset. 

16 We had been fielding the study in April/May of

17 previous years. This year, we fielded the study

18 in April/May, but so much was changing that we

19 went back to the survey in July and August, and

20 that's the primary data that I'll be showing you

21 today. This, similarly to what Fiona just showed

22 you, was at the end of the stimulus benefit and

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1 the unemployment insurance bump, so it reflects

2 the best of times, so to speak, and I'll comment

3 on that a little bit more.

4 We also have now been incorporating

5 transactional data from a subset of this panel,

6 approximately 835 people who have opted in

7 sharing their data with us through applied

8 integration, so we're able to see accounts across

9 different institutions, checking, savings, and

10 credit cards, some mortgages, and some 401(k)s.

11 I'll touch on just a couple of those

12 pieces of data in this presentation. We're just

13 really getting into that now. Next slide. 

14 Before I give you the high level

15 numbers, I want to show you how we put together

16 financial health, because that's part of what, I

17 think, allows us to tell the story about where we

18 are as a country. 

19 So we've been measuring financial

20 health for years now. We introduced this

21 framework about five years ago, and we've been

22 using it for as a rubric for how do you measure

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1 financial health. We break it down into the four

2 basic categories of spending, saving, borrowing,

3 and planning. Then within each of them, we've

4 developed an indicator that we think, with these

5 eight indicators together, you get a pretty

6 holistic picture of where someone's at. And it

7 ensures that when you're looking at financial

8 health, you don't just see a bump in savings, but

9 miss that they're actually taking on debt at the

10 same time. You get to put the whole picture

11 together. And you can see the indicators here.

12 From these indicators, we've developed

13 a survey, so a question that corresponds to each

14 of the indicators, as well as a scoring logic

15 that then generates a fin-health score, which we

16 then benchmark against the U.S. data that we

17 derive from the pulse.

18 If you're interested in the

19 methodology and the weeds of it, please go to the

20 link there. 

21 All right, let's get into the data. 

22 With that, we then use that score to then

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1 determine how financially healthy is America. Go

2 to the next slide. We break that down into three

3 categories, financially vulnerable, financially

4 coping, and financially healthy. If you're

5 financially vulnerable, that means you are

6 struggling with almost all of those eight

7 indicators. If you're financially coping, you're

8 doing okay with some, not so much with others.

9 If you're financially healthy, that

10 means you're doing okay with all indicators of

11 financial health. The headline for this 2020

12 trend report is that financial health has

13 improved from previous years, but we still have a

14 pretty big problem on our hands, in that

15 two-thirds are still financially coping or

16 vulnerable.

17 Last year's report showed that 29

18 percent of Americans were financially healthy. 

19 The year before was 28 percent. If you just were

20 looking at those trends, you might say we're on a

21 nice upward swing, but as I think we've already

22 heard, it is way more complicated than that.

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1 Then, of course, even if we were still

2 at 33 percent -- and I'm sure that number has

3 dipped just since August -- we still have a

4 problem, which is that 67 percent, or two thirds

5 of this country, are financially struggling in

6 one way or another. It's also worth noting that

7 the entire 4 percent bump in financially healthy

8 came entirely from the financially coping. Last

9 year it was 54 percent coping and 29 healthy, and

10 then that just switched. Financially vulnerable

11 stayed the same.

12 And I think one of the themes from our

13 research is that looking at this K-shaped

14 recovery that people are talking about, which is

15 that those who are doing well were already doing

16 well, and the impact of the pandemic has kind of

17 exacerbated that; whereas, those that were

18 struggling continue to struggle and now at risk,

19 I think, of really going down as the various

20 stimulus efforts have ended.

21 Let's look at the next slide, please. 

22 Again, to put in context the numbers that make it

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1 seem like people are doing okay, always really

2 important to look at who is actually experiencing

3 extreme hardship.

4 I think that's one of the things that

5 all of us researchers have struggled with is, how

6 do we see savings balances up and credit card

7 debt down, but also lines at food banks? Again,

8 the realities of both those things are true. 

9 While looking at that two thirds of people who

10 are financially coping and vulnerable, we find

11 that 22 percent essentially have food insecurity,

12 saying they're worried that food's going to run

13 out; 26 percent are having rent or mortgage

14 insecurities and they're worried about their

15 ability to pay that; 29 percent are saying they

16 spent down their savings to cope with the effects

17 of the pandemic; and 41 percent are carrying a

18 balance on their credit cards just to make ends

19 meet.

20 These are just various indicators of

21 financial hardship and stress. On the next

22 slide, one of the things that we look at a lot in

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1 this year's study are financial health

2 disparities. As I was saying, they are

3 continuing to widen.

4 First, it's a level set. Just this

5 year, again, in August, at this high point, we

6 still had massive disparities according to race. 

7 Certainly, the events of this summer have made

8 this issue come to the forefront.

9 If, when we break it down by race, we

10 see that 39 percent of White Americans are

11 financially healthy, 39 percent of Asian

12 Americans, but then it drops to only 24 percent

13 of Latinx and 15 percent of Black Americans. The

14 Black Americans has stayed relatively level back

15 a few years of our study. Most of the increase

16 has been borne by White, Asian, and Latinx

17 Americans.

18 In the shift that we saw particularly

19 from this past year, as you can see on the right,

20 which shows you the change of financially healthy

21 between 2019 and 2020, we see that most of that

22 benefit is going to White and Latinx Americans,

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1 and that Black are a negative 1 percent, which is

2 not significant, so essentially zero, flat for

3 the year.

4 We also see this happening on income. 

5 While we did see -- there were some ways you

6 might say it was good to see that low income

7 Americans went up 1 percent or essentially

8 relatively flat amidst the pandemic, knowing they

9 were most likely the ones unemployed and impacted

10 by that, we see these massive gains going

11 gradually more and more so to the higher levels

12 on the income chart and continuing that divide.

13 We also saw some gain -- we look at

14 gender, as well. We saw some gains by women this

15 year for a variety of reasons, although, again,

16 that gap still remains. I don't have it here. I

17 think the gap is something like 12 points between

18 men and women, even with the improvements that

19 women saw in 2019. Next slide. 

20 Again, this is a little bit of the

21 transactional data that we have for the product

22 integration that we were looking at liquid

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1 account balances.

2 Again, on the issue of the K shape,

3 you can sort of see it happening here. That

4 those with incomes of $100,000 or more household

5 incomes saw their average liquid account balances

6 grow extremely high, from $9,000 to something

7 around over $14,000 by the end of July.

8 Whereas, you saw much lower increases

9 at the lower income thresholds. As Fiona

10 mentioned, proportionally, those are still

11 somewhat meaningful, but on a raw numbers

12 account, we can see where the vast amount of

13 these dollars are going, between the stimulus,

14 the benefits, and then who's able to reduce their

15 expenses; most of that is going to high income

16 earners. 

17 The next slide, this is also touched

18 on by Jason. We looked at this question of debt

19 relief. We did see a number of our analysts

20 saying they have unmanageable debt, more so Black

21 and Latinx customers, by our analysts. But what

22 I think was really disturbing -- because you

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1 might say okay, that is the case of historic

2 issues that we've been talking a lot about this

3 year, but shouldn't they all at least be able to

4 get that debt relief? Shouldn't that be

5 equitable? And in fact, no, that's not the case. 

6 Those that we asked did you request debt relief,

7 and they were looking at variety of student

8 mortgage, credit cards, et cetera, and did you

9 get it, a huge difference here.

10 Only 61 percent of Black respondents

11 said they were able to receive that debt relief

12 that they requested, compared to 73 and 76 of

13 Latinx and White respondents. That's a very

14 concerning modern-day story of the challenges

15 that Black Americans are facing with the banking

16 system. Next slide. I think that's a wrap.

17 If you are interested in the full

18 report, please go to their website and the

19 dataset is available, or will be made available

20 soon. Thank you so much for having me today.

21 MR. ERNST: Thanks, Rob. I think that

22 brings us to Kevin.

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1 MR. LEVY: Sorry. I was supposed to

2 introduce Kevin. Go for it, Kevin. 

3 MR. KLOWDEN: That's quite all right. 

4 The virtual world always leads to a certain

5 number of challenges, so we're good. So unlike

6 everyone else, I'm going to be talking a bit more

7 anecdotally on adopting a number of different

8 metrics, as well as some anecdotal information to

9 frame the larger conversation.

10 Actually, I'm thrilled, just so you

11 know -- my background is that I'm the

12 non-governmental individual. I'm with Milken

13 Institute. It's a non-partisan, non-profit

14 economic think tank. Access to capital has been

15 one of our fundamental issues for the last

16 several years.

17 We've been partnered with the SBA,

18 among others, in terms of these issues. And one

19 of the things in particular that's come up

20 especially is the issues of infrastructure. Some

21 of the survey data that was actually done and

22 presented earlier in terms of pre-COVID still

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1 holds true, where the concept, in particular, of

2 a banking desert is especially important when

3 looking at availability and access to capital, as

4 well as the ability of households, particularly

5 in the -- from a geographic standpoint, in inner

6 city urban areas, especially, particularly

7 minority communities, especially Black and

8 Hispanic, based on government data, has led to a

9 significant number of problems.

10 The collapse in relationships that

11 particularly happened coming out of the great

12 recession, over 6,000 bank branches were closed

13 between 2008 and 2016, which is over 6 percent of

14 branches nationally, but 82 percent of those were

15 in intensely urban areas, particularly in inner

16 city locations and locations that were already

17 considered to be marginal in terms of

18 availability of access to capital.

19 The other thing that happened in

20 particular that went along with that is that

21 minority depository institutions, MDIs, which had

22 been filling in some of that gap leading up to

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1 the 2008 financial crisis, you'd actually seen a

2 significant increase from 164 to 215 nationally. 

3 By 2018, that had dropped back down to 149. And

4 the African-American share of MDIs had gone from

5 30 percent in 2001 down to 15 percent in 2018. 

6 So the locational aspect of access to capital for

7 households and the relationships also for small

8 businesses hit significantly. Now in other parts

9 of the country and other parts of the world,

10 particularly in regard to the middle class, upper

11 middle class, and upper class, the top income

12 earners, beyond the impact in particular of the

13 CARES Act and PPP and other -- and unemployment

14 in terms of providing assistance, there is also a

15 significant discrepancy and division that's

16 happened in terms of the ability to access

17 capital for loans and alternate sources online.

18 One of the things that is particularly

19 true, both in terms of urban -- very urban

20 minority communities, as well as in rural

21 communities, is the division in terms of access

22 to broadband. Only 63 percent of rural

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1 respondents, according to Pew, actually have

2 consistent broadband adoption.

3 That number jumps up to 79 percent of

4 urban respondents. When you compare that to the

5 suburbs and wealthier communities where it jumps

6 up to 87 percent, that's a significant

7 difference. That matters when combined, also,

8 with the fact that the United States is among the

9 lower adopting countries when it comes to the

10 ability to not only bank online, but bank

11 mobilely, to have access to capital and be able

12 to support saving both -- not only savings, but

13 also in terms of potential lending access.

14 Right now, one of the things that is

15 particularly important when looking at the auto

16 loan data and the various issues in regards to

17 that is that the infrastructure specifically for

18 auto loans is contained normally within the auto

19 dealerships themselves, whether it is done on a

20 more formalized basis, particularly from the auto

21 companies, or it's done even in used vehicle

22 markets where used dealers are willing to adopt

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1 and take higher risk loans in terms of vehicle

2 purchases which disproportionately, once again,

3 falls on the working class and also on minority

4 communities.

5 That means that capital access there,

6 because it is less constrained by geography and

7 more tied to a tangible asset, often means that

8 that's an area where investment or purchasing can

9 happen. The fact is that there is still a

10 massive trailing effort in terms of mortgages and

11 refinancing. And so the most recent data, which

12 is still a few years old from 2015, the overall

13 mortgage denials at 12 percent jumps to 19

14 percent for the Hispanic community, 27 percent

15 for the Black community.

16 One of the things -- and this gets

17 back to this infrastructure issue -- is that

18 being able to access online mortgages, alternate

19 sources, fintech and various other elements, is

20 significantly reduced. And this also expands

21 this issue.

22 It is also an issue, once again, in

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1 rural communities, where the ability to

2 effectively access these sources drops

3 considerably.

4 One of the things that's actually been

5 the case and has shown up especially in various

6 data and surveys, including from the Bureau of

7 Labor Statistics, when it comes to financial

8 health of communities in relation to this has

9 been the fact that if -- beyond broadband access,

10 beyond the ability of bank branches, is the

11 ability of communities and populations to work

12 remotely, to be able to telework. According to

13 the BLS's two different surveys, the ability to

14 telework in households ranges between 43 and a

15 half to nearly 45 percent, but if you then look

16 at -- if you look at the data, it's fairly

17 consistent by age range. It actually is pretty

18 consistent, whether populations are 25 to 50 or

19 -- 25 to 55 or 55 and older.

20 Where it breaks down, in particular,

21 actually happens by ethnicity, where the

22 population able to telework drops from an

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1 average, according to the primary survey, from

2 about 43 and a half percent down to 39 and a half

3 percent for Black households, 29 percent for

4 Hispanic.

5 And for Hispanic households you have

6 an even larger issue, which is that their takeup

7 rate -- the number who actually do it, as opposed

8 to feel they could -- drops down to 14 and a half

9 percent.

10 Why that matters when it comes to

11 banking, again, is that it's a trust in an

12 ability to be able to work effectively, to be

13 able to trust your connections and your

14 infrastructure at home, and then again, in

15 particular, trust in institutions and access. By

16 contrast, just to look at it from an alternate

17 perspective, there is a very clear situation that

18 exists if you look at Asia, in particular, China,

19 where 57 percent of the population in China, not

20 just an urban standpoint, but in a rural

21 standpoint and otherwise, has access to mobile

22 banking, as in Ant Financial or WeChat Pay, which

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1 is tied to accounts or various other sources.

2 And where that played a significant

3 role during the lockdowns that happened in China,

4 which happened more severely and more quickly

5 than happened in the U.S., that the ability to

6 access banking and payments effectively remained

7 incredibly strong.

8 What we have seen in terms of

9 electronic access in the system in the United

10 States is that as unemployment insurance has

11 become even more important, in terms of ties to

12 banking and otherwise, not only has the

13 infrastructure for various households and the

14 ability to operate and do banking remotely,

15 access to capital, potentially access lines of

16 credit has been restricted, but you're also

17 seeing the breakdown in the infrastructure for

18 unemployment payments themselves. We actually

19 saw California do a two-week suspension of

20 unemployment payments because the system was

21 viewed as having not only fraud, but structural

22 and applicational issues. We've seen significant

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1 restrictions in the infrastructure in Florida

2 earlier in the pandemic and on an ongoing basis,

3 and throughout the United States, where the

4 technological infrastructure is not necessarily

5 set up or structured to be able to handle the

6 various flows in the pandemic.

7 If you're looking at reasons why

8 households especially have increased their

9 savings rates and concerns, that issue of access

10 to capital remains incredibly important and

11 continues to be a profound and pressing issue,

12 whether it is from a lending standpoint, whether

13 it is from just simply access to savings, and

14 otherwise.

15 Even the wealthier communities, which

16 have cut down on discretionary spending, have

17 also reflected concerns about the ability to

18 access and be available to capital on an ongoing

19 basis.

20 This means that going into any kind of

21 recovery and any kind of ability to rebuild the

22 infrastructure of lending to households,

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1 household savings, and other issues, this

2 perceived vulnerability remains incredibly

3 important and is one of the key areas that we

4 need to look at, not only in terms of general

5 banking, but in terms of creating standards and

6 investments, whether it is in broadband or mobile

7 literacy and technology or otherwise, to be able

8 to facilitate any kind of reinvestment and growth

9 once we move from a pandemic mitigation phase to

10 a more effective structural opening. With that,

11 I will -- Keith, I'll turn things back over to

12 you. Thank you.

13 MR. ERNST: Great. Thank you, Kevin. 

14 And thank you to all of our panelists. I feel

15 like we've put a tremendous amount of really

16 interesting information on the table and I'm very

17 interested to allow the members of the Committee

18 a chance to get in here.

19 Now I haven't checked with Jonathan

20 Miller on chat here, but I think since we started

21 ten minutes early, it means we get to go 20

22 minutes long. No, I'm seeing on chat that's not

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1 the case.

2 But still, welcome a chance to

3 entertain questions or comments from members of

4 the Committee. We've heard a lot of information

5 about how conditions are changing for consumers

6 through the pandemic, the important role that

7 public programs seem to have made, the ways in

8 which our infrastructure have interacted with

9 these efforts, in some cases, you know, not able

10 to support them as we might like. And so I'm

11 anxious to hear people's questions. I see Mike

12 Barr with --

13 MEMBER BARR: Thanks very much, Keith. 

14 Sorry, let me see if I can put on headphones and

15 get rid of the echo. Better? I thought the

16 presentations were really fascinating, learned a

17 lot. It really shows the importance of getting

18 this real-time economic data from transactions

19 and from the health survey. And I wonder --

20 maybe, Fiona, this is best directed at you, when

21 you're looking at the data. You know, this would

22 be of super use to policymakers.

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1 Can you figure out in the transaction

2 data if there's not, for example, another

3 stimulus bill, what's the projected exhaustion of

4 the buffer stock, and when do you start seeing

5 not only effects at the individual level, but at

6 the aggregate level you're building up from your

7 transaction data? I wonder if you've -- I'm sure

8 you've thought about that. I wonder if you could

9 just share a little bit about how you guys are

10 thinking about it.

11 MR. ERNST: Fiona, you're on mute.

12 MS. GREIG: I think I'm not on mute. 

13 Can you hear me now? Okay, great. I said

14 predictions are a dangerous business to be in, so

15 I don't take that invitation welcomely. 

16 Probably, it's even a worse business to be in in

17 a pandemic, right, because we don't know what's

18 going to happen to the labor market.

19 And so, in terms of the spending

20 trajectory that I described to you of the jobless

21 workers, right, I mean September's going to be

22 clouded by the LWA, right, the lost wages

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1 assistance, which did start to go out. Now, I

2 think already, as of now, like 35 out of the 50

3 states have already exhausted their FEMA pots. 

4 And so that's also tapped out.

5 But what really matters in terms of

6 thinking about this on a go-forward basis is

7 what's going to happen to the labor market and if

8 people are going to be able to go back to work.

9 If they're going to -- and in some

10 ways, initially, maybe that was a matter of

11 choice, but later it may be more a matter of

12 opportunity. So I don't have kind of aggregate

13 GDP predictions. One thing I will comment on,

14 though, is that I think in the aggregate data,

15 we're seeing more robust recovery in sort of GDP

16 than in job market. And that is telling us that

17 it really matters how people are spending their

18 economic impact payments and their UI dollars,

19 right. And the evidence out there suggests that

20 they're spending it on stuff, rather than

21 services, including durable goods.

22 And they're also saving some of it,

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1 evidently, as you can see in the savings jumps,

2 right. So there's a cautiousness with which

3 people are using these funds, and that also has

4 downstream implications for economic growth,

5 right, and recovery because buying a refrigerator

6 generates fewer jobs than going out to

7 restaurants.

8 And also, there's only so many

9 refrigerators one can buy. One thing we will be

10 looking into is how people are spending these

11 stimulus dollars and UI funds as a way to get

12 closer to your question.

13 MR. ERNST: Great, thank you, Fiona.

14 I'm seeing a question from Alden in the queue.

15 MEMBER MCDONALD: Yes, thank you. My

16 question is for Kevin, please. Kevin, you

17 mentioned some information about used car dealers

18 carrying their own paper. Do you have any idea

19 as to what percentage of their sales are being

20 self-funded? And if so, is there a way of

21 measuring these data going forward? Because if

22 that is a trending piece, it's going to be very,

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1 very hard to monitor interest rates that are

2 being charged, and fees. And this is new

3 methodology of having higher interest rates and

4 subprime markets that it's not really monitored

5 any place that we see.

6 MR. KLOWDEN: Actually, thank you for

7 bringing it up. Just to clarify that, it's the

8 new car makers who are primarily monetizing. What

9 you're really seeing, though, in the used car

10 maker is the -- and this is hard, you're right,

11 it's hard to capture in the data -- is that

12 there's been a number of cases where they've been

13 using local or more informal relationships, in

14 some cases, where they've been -- rather than

15 traditional banks, they've been using

16 institutions that, in many cases, we would

17 consider to be subprime credit sources.

18 One of the things -- I don't have it

19 right in front of me, but the numbers that have

20 happened leading up to the pandemic, in terms of

21 the delinquency rate, particularly from

22 non-standard lending in the auto market, where

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1 there's been a bubble of subprime credit coming

2 from alternate lending sources by -- not exactly

3 payday loans, but organizations that functionally

4 operate in a similar basis operating interest

5 rates in the 30 something percent and higher has

6 jumped dramatically.

7 That's something I can look up -- I

8 don't have it right in front of me -- later, but

9 it is a real problem. We have a sense of the

10 delinquency rate. We have a sense in terms of

11 the number of loans that are classified as

12 riskier and how those have gone up dramatically.

13 There are breakdowns in terms of them

14 operating on the same institutional basis. Most

15 of the time, it's not -- unless you're dealing

16 with a large enough used car organization, it's

17 not their own paper, unto itself, as much as it

18 is non-standard.

19 They're using alternate credit lines,

20 and they provide that infrastructure and access

21 to, in many ways, what we would consider --

22 similar to the subprime housing brokers leading

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1 up to the 2008 recession. That make sense?

2 MEMBER MCDONALD: Perhaps the subprime

3 funds, investment funds that have been popping

4 up, is that a source of funding for some of these

5 loans? Because if it is, it's a whole other

6 problem that's bubbling up that's going to have

7 an effect on the minority communities and the

8 unbanked and the lower income levels.

9 That's going to begin creating a whole

10 other problem that we need to think about from a

11 measurement point of view from the FDIC's

12 unbanked and underbanked survey. Thank you.

13 MR. KLOWDEN: Absolutely.

14 MR. ERNST: Great, thank you. I see

15 another question on the line from Naomi.

16 MEMBER CAMPER: It says my video is no

17 longer connected. Can you hear me?

18 MR. ERNST: We hear you just fine.

19 MEMBER CAMPER: Okay, good. Well

20 after a five-hour meeting, it's probably just as

21 well my video is off. This question, I think if

22 my memory is correct, goes to Rob.

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1 I just wondered, Rob, if you have a

2 little additional detail about the slide that you

3 presented about people who asked for some form of

4 relief who didn't get it. Do you have a sense of

5 how that breaks down with a little more

6 granularity?

7 MR. LEVY: I can give you as much

8 granularity as I have. It was one of many

9 questions that we asked, and I think it's one we

10 want to probe on some more. I realized,

11 actually, that I think my slide -- the language

12 was not as precise as it could have been, so let

13 me use the opportunity to clarify.

14 So we asked two questions, basically,

15 on this issue. First we said, did you apply for

16 -- did someone in your household, because all of

17 our questions are household level -- apply for

18 debt relief? We clarified it as being student

19 loans, credit cards, auto loans, mortgages, or

20 other loans.

21 That was the first set of questions. 

22 And the second question was then, and then of

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1 those, right, so then if you said yes, next

2 question, have you received this relief? So the

3 data that I showed you was the answer to that

4 second question.

5 So amongst those who said yes, who had

6 asked for relief, 61 percent of Black households

7 then got it, whereas 73 percent of Latinx

8 households who requested it received it, and 76

9 for White. I do know that -- and Black

10 households were more likely to also request that

11 relief. I don't have those numbers offhand, but

12 that should check out with the other numbers that

13 we were showing in the study. I'm happy to

14 follow up more with more detail than that.

15 MEMBER CAMPER: Yes, that would be

16 great. And also, to the extent that you were

17 able to parse out whether relief was -- you know,

18 banks versus non-banks in terms of granting the

19 relief.

20 Because one of the things that I tried

21 to impress at the beginning of the meeting this

22 morning is we are really urging consumers who are

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1 in need of relief to call their banks, not be

2 afraid to call their banks.

3 And so obviously, it would be

4 concerning, but also helpful to get feedback if

5 we're not providing it. Any additional detail

6 you have, but again, the message we want to get

7 across to struggling consumers is please call

8 your bank and ask what relief might be available.

9 MR. LEVY: Absolutely.

10 MR. ERNST: Great, thank you. I don't

11 have a question on the floor, but I'd like to put

12 a question to the Committee. We asked Fiona to

13 make a bit of a prediction and she deftly danced

14 around it, I think I can say. But I do want to

15 ask the Committee, thinking about what you're

16 hearing, so we shared information with you today

17 on the latest FDIC household survey indicating

18 that the trends coming into the pandemic were, in

19 many respects, very positive, historic

20 participation in the banking system, though gaps

21 remained.

22 On this panel, we're updating that

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1 with additional information, certainly no

2 surprise, I imagine, to members of the Committee

3 that during the pandemic, household finances have

4 been buffeted a little bit.

5 We've seen sort of, in Jason's

6 presentation, a little bit in Fiona's, sort of

7 pulling away from some credit use, so maybe some

8 slight recovery there, but much of the activity

9 seemingly buttressed by public support programs.

10 If you, if anybody on the Committee

11 has a perspective, thinking about what are going

12 to be the most important things for financial

13 services providers for groups looking to support

14 consumers over the coming year to pay attention

15 to, what are the issues that come to your mind? 

16 I really would welcome comments or questions

17 along these lines.

18 MR. LEVY: Keith, I'm happy to take a

19 stab at it, but I don't know if you're going for

20 the Committee or the panel.

21 MR. ERNST: No, really for the

22 Committee, really interested in your perspective

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1 on this, but if not, Rob, have at it. Why don't

2 you take a shot and we'll see if it provokes some

3 more questions.

4 MR. LEVY: Yes. I think it's really

5 interesting to think about the data you guys just

6 released juxtaposed against what we just heard

7 and the really positive progress you've made

8 around financial inclusion.

9 I think clearly one of the pain points

10 that we saw in providing relief is around the

11 payment system, and particularly around those who

12 most need it getting access to those stimulus

13 checks and government benefits as soon as

14 possible because we saw from Fiona's data how

15 quickly they are spending down their other

16 resources when they don't have that funding.

17 And while yes, we can be really happy

18 about 5 percent unbanked rate, and that's a major

19 success, we know that number is not 5 percent

20 flat across the country, right. It is

21 disproportionately higher in rural areas and in

22 metropolitan areas, disproportionately higher

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1 among communities of color. Of course, those are

2 the communities that my data and other data is

3 showing were impacted by this and need the funds

4 the quickest. So I think there is a need for

5 helping to resolve that issue in those pockets

6 where bankedness is still a real challenge. 

7 That's one solution I think about.

8 MR. ERNST: Great. Thanks for the

9 suggestion. I am being given a bit of the high

10 sign from Jonathan Miller that we are approaching

11 the end of our time. So I just want to do one

12 last call for questions from the Committee before

13 handing the floor back over to Jonathan.

14 Again, my deep appreciation to

15 everyone on the panel for the great information

16 we've been able to share with the Committee. All

17 right, Jonathan, I think we're back to you.

18 MR. MILLER: Thank you to the panel,

19 very interesting. Really appreciate it. Keith,

20 thank you very much. Ten minutes early, and just

21 five minutes long. The next panel, the final

22 panel of the day, is really designed to give the

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1 Committee some insight into two programs here at

2 the FDIC that have some relevance to the work of

3 the Committee, our MDI CDFI program, we've heard

4 quite a bit about that today, and our Office of

5 Minority and Women Inclusion program. So let me

6 introduce, briefly, the two panelists. First,

7 Betty Rudolph.

8 Betty is the National Director for

9 Minority and Community Development Banking at the

10 FDIC, a role she's been in since April of 2018. 

11 She has over 30 years of experience here at the

12 FDIC and we value her as a colleague.

13 Nikita Pearson is the acting director

14 of the Office of Minority and Women Inclusion, or

15 OMWI, as it's referred to. She is responsible

16 for leading the FDIC's diversity, equity, and

17 inclusion efforts for our workforce, our business

18 activities, and our supervised institutions.

19 Her permanent position is as a deputy

20 director with us in the Division of Depositor and

21 Consumer Protection. So Betty, with that, I'll

22 turn it over to you to get us started.

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1 MS. RUDOLPH: Great. Thank you so

2 much, Jonathan. I have a number of slides. I'm

3 going to go through them fairly quickly. I know

4 it's the end of a long day, but I'm really

5 thrilled to be able to update you on some of the

6 initiatives we have going on in our Minority and

7 Community Development Banking program. So moving

8 on to the next slide, Shannon, our work is

9 governed by five statutory goals.

10 These were set (audio interference) in

11 1989 (audio interference) promote creation of new

12 MDIs, and to provide training technicals (audio

13 interference) that we have set before us (audio

14 interference) to try to fulfill those goals. On

15 the next slide -- Shannon, if you could (audio

16 interference) --

17 MR. MILLER: Betty, we lost you there

18 for a minute. Welcome back.

19 MS. RUDOLPH: Can you hear me now?

20 MR. MILLER: Now we can hear you. 

21 Betty, can you hear us?

22 I'll tell you what. Nikita, why don't

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1 you get started, and hopefully we'll get Betty

2 back?

3 MS. PEARSON: Okay, Jonathan, can you

4 hear me and see me?

5 MR. MILLER: I can hear you. I don't

6 see you yet, but why don't you go ahead and get

7 started?

8 MS. PEARSON: Okay, I will just go

9 ahead and get started. Chairman McWilliams,

10 Director Gruenberg, and members of the Committee,

11 I'm so excited to have an opportunity to speak

12 with you today.

13 As a person who initially struggled

14 being in the financial system, and as a person

15 with many family and friends who still struggle

16 to see themselves as a part of the financial

17 system, I thank you for your work in this area. 

18 The necessity of creating a fair and inclusive

19 financial system is more than just a job for me.

20 I have witnessed my mother being

21 denied a loan in a heartbreaking way. Every day,

22 I saw my great-grandmother carry all of her money

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1 from her Social Security check in her pocket

2 because she didn't trust banks.

3 I've watched many from my community

4 become increasingly frustrated by their inability

5 to build wealth because they do not see a

6 financial system that supports their hopes and

7 dreams. Today, I would like to share how the

8 FDIC is working to transform our workforce and

9 how our efforts will ultimately help make the

10 banking system safer, fairer, and more inclusive. 

11 Diversity, equity, and inclusion are fundamental

12 aspects of the FDIC's work. Our goal is to have

13 a diverse workforce that is well trained on the

14 needs of the communities that banks serve. If

15 our employees understand and are a reflection of

16 the communities that banks serve, they are better

17 equipped to be standard bearers for economic

18 inclusion.

19 As you know, diverse cultural

20 perspectives can inspire creativity and drive

21 innovations, which are key aspects of advancing

22 economic inclusion --

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1 (Off-record comments.)

2 MS. PEARSON: Can you hear me? All

3 right. Shannon, am I good to go?

4 MR. MILLER: I'm sorry; go ahead,

5 Nikita. We were somehow getting somebody else on

6 the call. I think you're good to go now.

7 MS. PEARSON: Okay. I'm going to go

8 back a little bit because I'm going to get to one

9 of my favorite pieces of this. As you know --

10 MR. MILLER: That's good. 

11 MS. PEARSON: As you know, diverse

12 cultural perspectives can inspire creativity and

13 drive innovation, which are key aspects of

14 advancing economic inclusions because there is

15 simply not a single solution to address

16 disparities. We want to make sure we are

17 attracting, recruiting, and hiring the best

18 talent.

19 For the FDIC, that means a focus on

20 our examination workforce. Bank examiners ensure

21 that financial institutions treat consumers and

22 depositors fairly and reinvest in their

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1 communities. Bank examiners are also responsible

2 for supervising mission-driven banks like

3 minority depository institutions.

4 In addition, bank examiners like me

5 tend to occupy a large percentage of leadership

6 positions in the agency. Our ability to attract

7 and retain a diverse examiner workforce has

8 primarily been impacted by high travel, the

9 location of our offices, and low turnover.

10 Depending on the location, the average

11 examiner spends 89 nights away from home. 

12 Excluding retirement, this is the top reason for

13 employees leaving the examination workforce. Our

14 field offices are mostly located in smaller

15 cities, and examiners frequently travel to rural

16 areas. Candidates with the specialized

17 experience that we seek may be attracted to more

18 career opportunities in larger metropolitan

19 areas. The average tenure at the FDIC is 25

20 years, and the median age is 51.

21 Not surprisingly, this usually means

22 more experienced employees are selected for

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1 promotional opportunities and, once selected,

2 employees tend to stay in their positions for an

3 extended period.

4 This workforce dynamic provides the

5 FDIC with incredible experience and industry

6 knowledge, but it also means we have fewer

7 opportunities to transform the workforce to

8 address our long-standing representation gaps. I

9 know these challenges very well.

10 When I was an examiner, I missed my

11 oldest daughter's first day of school and the

12 moment my youngest daughter took her first steps

13 because I was on business travel.

14 I lived 60 miles away from my office

15 because I didn't feel comfortable living in a

16 small town where the office was located. For

17 these reasons, I often considered leaving the

18 agency. However, the FDIC is now taking steps to

19 address these issues in hopes of retaining

20 employees, including minorities and women like

21 me. Upon her arrival, Chairman McWilliams

22 required a thorough study of examiner hiring. As

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1 a result, she established an executive level task

2 force to improve diversity inclusion.

3 To build a talent pipeline, we

4 strengthen our recruitment strategy with more

5 targeted outreach to minority serving

6 institutions, like historically Black colleges

7 and universities and Hispanic serving

8 institutions.

9 We made changes to make our mandatory

10 examiner training more efficient. The amount of

11 time that it takes to earn a commission and the

12 inability to train and develop in other areas

13 have been points of frustration for new

14 employees.

15 We believe this effort will help

16 improve retention of all employees, including

17 minorities and women. As the FDIC has worked to

18 increase representation in the workforce, we have

19 also expanded workplace benefits and services to

20 improve retention. The FDIC was one of the first

21 agencies to announce six weeks of paid parental

22 leave. In addition, we launched a pilot student

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1 loan repayment program to provide meaningful

2 financial assistance to commission examiners. We

3 suspect that the pool of eligible applicants will

4 include a number of individuals from low and

5 moderate income communities who may have taken on

6 more debt to finance their education.

7 The FDIC also identified changes to

8 daily operations that may support retention. As

9 a part of our supervision modernization efforts,

10 we plan to implement technology solutions to

11 reduce the amount of travel that examiners are

12 away from their family.

13 We are also reviewing opportunities to

14 expand long-term telework flexibilities. We hope

15 these efforts will reduce examiner travel and

16 improve retention. As the FDIC has worked to

17 improve retention, we have also placed increased

18 emphasis on enriching career development in

19 support of our goal to foster diverse workforce

20 at all levels of the organization.

21 We have added a new performance

22 standard for managers that focuses on career

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1 development and the cultivation of an inclusive

2 work environment. We increased our focus on

3 mentorship programs. We expanded professional

4 development through greater access to the

5 graduate school of banking. Employees will enjoy

6 more career advancement opportunities, with

7 increased flexibility to pursue career

8 enhancement development assignments.

9 They may also take part in a newly

10 created leadership development program for

11 high-performing employees. To enhance our

12 diversity and inclusion efforts, the FDIC has

13 also engaged an independent consultant to

14 identify any remaining barriers that may exist

15 for career advancements by minorities, women, and

16 persons with disabilities.

17 Our recruiting and retention efforts

18 have already produced results, and new

19 initiatives in these areas will further

20 strengthen diversity. While we have made

21 progress, we know that our efforts are far from

22 complete.

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1 We remain committed to establishing a

2 diverse workforce and an inclusive work

3 environment, both at the agency and across the

4 financial services industry. Having a workplace

5 that is diverse, inclusive, and accessible to

6 everyone helps us effectively respond to the

7 needs of those who participate in the financial

8 system. Because we are responsible for ensuring

9 that our supervised banks comply with federal

10 consumer protection, anti-discrimination, and

11 community and reinvestment loss, the FDIC has a

12 responsibility to lead by example.

13 Our credibility as a regulator depends

14 on it. Today, we absolutely should celebrate

15 that a record number of U.S. households have a

16 bank account. The next step is ensuring that

17 those households have a path to build wealth.

18 With a diverse and inclusive

19 workforce, the FDIC is better prepared to work

20 with you to create these opportunities. Thank

21 you for being our partners on this journey.

22 MR. MILLER: Thank you very much,

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1 Nikita, appreciate it. Betty is back with us by

2 phone, so she'll direct Shannon on the slides. 

3 Thanks. Welcome back, Betty.

4 MS. RUDOLPH: Thank you, Jonathan. 

5 I'm sorry about that, Committee members. I think

6 I was talking about the second slide, which was

7 our statutory goals. Actually, I think I went

8 beyond that, and I was talking about some of our

9 key program initiatives that support those five

10 statutory goals. On Slide 3, the first item

11 there is representation. And so we've tried to

12 make an effort to increase the voices of minority

13 and community development bankers at the table. 

14 And so we've added a new MDI subcommittee to our

15 Advisory Committee on Community Banking.

16 It has nine executives of MDIs from

17 across the country, of all types of MDIs and

18 different sizes and business models. And

19 Chairman McWilliams also added a number of

20 representatives to our community bank advisory

21 committee. Of the 18 slots, three are filled by

22 minority bankers, which is more than

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1 proportionate to their role in the economy. And

2 I think that's based on the important role that

3 these banks play in the financial system. 

4 The second bullet there is research.

5 Last year, we completed a fairly comprehensive

6 research study that looked at the structure,

7 performance, and social impact of minority

8 depository institutions. I think Kevin, in the

9 last panel, cited a couple of statistics from

10 that study. Overall, it showed that MDIs

11 consolidated similar to what we saw in the

12 banking industry overall, that MDI financial

13 performance had improved over five years, and

14 that these institutions play an outsized role in

15 their social impact, in terms of serving low and

16 moderate income communities and minority

17 communities. 

18 In terms of policy, we have two

19 initiatives that we've undertaken recently. In

20 August, our board of directors approved an update

21 to our statement of policy regarding minority

22 depository institutions, which bolstered the

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1 policy statement that we've had since 1990. And

2 it's out for public comment right now, until

3 November 24th.

4 We also changed some policy in terms

5 of when we have a failing MDI, we market it

6 nationwide to all eligible MDIs. And we added an

7 exclusive two-week window at the beginning of

8 that process just for MDIs to do their due

9 diligence to get some technical assistance and

10 better understand the bidding process. There's

11 only been one MDI that failed since we

12 implemented that process, and the winning bidder

13 was another minority depository institution. 

14 In terms of advocacy, we've done quite

15 a bit on -- our chairman has recorded numerous

16 podcasts, videos, and messages about the

17 importance of minority and community development

18 banks. And we've also recorded some videos

19 trying to tell the stories of individual banks to

20 elevate their role and awareness in the general

21 population about the role they play.

22 Last year, in terms of partnerships,

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1 we brought together about 30 large bank CEOs and

2 about 25 MDI CEOs to explore partnerships that

3 might provide CRA credit for the larger

4 institution for various financial support, loan

5 participations, and technical assistance

6 activities.

7 We had some successes with that, but

8 we feel that there's a need to build on that in a

9 much more robust way. And so I'm going to talk

10 about, the remaining minutes that I have, two of

11 those initiatives, a resource guide that we just

12 published last Friday and an investment fund that

13 the FDIC is facilitating.

14 If you could move to the next slide,

15 Shannon. The resource guide is -- really talks

16 about the role that FDIC-insured MDIs and CDFIs

17 play in the economy, and it talks about the

18 business case for supporting these institutions. 

19 And then it outlines several ways that private

20 companies can partner with these institutions. 

21 And this came about over the summer, when

22 numerous large banks and private companies made

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1 commitments in the billions of dollars, in

2 particular, over the past eight weeks.

3 We wanted to find a way to help them

4 understand that there are other ways, other than

5 deposits, for supporting these institutions. So

6 you can find that on our website, Shannon, if you

7 click to the next -- Slide No. 5, it's under the

8 fdic.gov/mdi.

9 This next slide, Slide 6, just shows

10 an outline of the guide. I won't get into a lot

11 of detail on that, except to mention that one of

12 the attachments really goes through all of these

13 commitments that have been made. It's fairly

14 substantial over the -- we just selected some of

15 them, but it's very substantial.

16 The other feature, moving on to Slide

17 7, is that we collected some impact stories. 

18 These are individual banks and stories about the

19 way they're changing their communities through

20 their work. And so Slide 7 just shows an example

21 of one, M&F Bank out of Durham, North Carolina. 

22 Moving on to Slide 8, we also published a CDFI

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1 and MDI bank locator. It's an interactive

2 mapping system where you can look up the

3 headquarters or branches of any MDI or CDFI --

4 any of the FDIC-insured MDIs or CDFIs in the

5 country. So it's a good way to understand where

6 they are.

7 There's a link, moving on to Slide 9,

8 that shows, for example, if you clicked on First

9 Independence Bank in Detroit, it will tell you

10 it's a CDFI, an MDI. And if you scroll down in

11 that little box, there's a link to every bank

12 website for all MDIs and CDFIs.

13 Moving on to Slide 10, Chairman

14 McWilliams gave a speech at the end of August

15 talking about creating a financial system of

16 inclusion and belonging.

17 And an important part of that speech

18 was a concept that she outlined for creating a

19 framework where we could channel many of these

20 substantial commitments, financial commitments,

21 made by private companies to minority and low and

22 moderate income communities through MDIs and

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1 CDFIs. So she mentioned the concept in this

2 speech in August, and then just yesterday the

3 FDIC released what I'll call a strategic roadmap

4 -- we call it an infographic -- of what this fund

5 could look like. It's called the Mission-Driven

6 Fund, investing in banks that support communities

7 in need. So this is for FDIC-insured MDIs and

8 CDFIs that play an essential role in serving low

9 and moderate income communities.

10 The first part of the graphic just

11 talks about the role these banks play in their

12 communities. So on the left-hand side, there are

13 about 250 FDIC-insured MDIs and CDFIs. Moving

14 over to the right, they originate a greater

15 percentage of their mortgage portfolios to

16 borrowers in LMI communities and non-MDIs.

17 CDFI banks deliver 60 percent of their

18 services in LMI communities, and MDI small

19 business loan portfolios include a larger

20 percentage of small business loans than non-MDIs.

21 So moving down to how investment could

22 help mission-driven banks and the communities

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1 they serve, we just pointed out here -- I know

2 that nobody on this call, on this Committee,

3 needs any real explanation for the fact that we

4 want to raise additional capital to support

5 additional lending in communities these banks

6 serve to weather the effects of economic

7 downturns, attract additional technical expertise

8 to grow their operations and expand their

9 services, and to acquire, deploy, and maintain

10 technology, and also to build capacity and scale

11 to achieve cost efficiency. Those are well

12 known, I know, to this community.

13 We'll move down a little further in

14 the graphic and talk about the roadmap for this

15 Mission-Driven Fund. It starts with the FDIC

16 establishing a framework for the fund. I think

17 it's very important to point out that the FDIC

18 will not actually be a fund investor.

19 The investors will be, as I mentioned,

20 some of these large corporations, philanthropic

21 organizations, it could include other financial

22 institutions and others invest in the fund. Then

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1 the fund will receive investment pitches from

2 banks.

3 So MDI and CDFI banks would be invited

4 to come forward. The investment committee would

5 meet quarterly to receive any proposals from

6 these banks for how they would use investment

7 funds. And we would have an independent fund

8 manager and investment committee that would be

9 making those investment decisions. Some of those

10 investment opportunities could include direct

11 equity investments, structured transactions,

12 funding commitments, and loss-share arrangements. 

13 I wanted to highlight, again, FDIC would not play

14 a role in fund management or individual

15 investment decisions.

16 The fund would be set to have a very

17 minimal rate of return to investors. Many of

18 these investors that we've talked to are looking

19 for a minimal rate of return. They want to

20 preserve their principal. They're not looking

21 for market rates of return.

22 Then finally, in turn, the MDIs and

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1 CDFIs are going to use these investments to help

2 their communities through additional lending and

3 mortgages, small business development, community

4 development, et cetera.

5 Finally, the fund, we would have

6 transparency and accountability through annual

7 reporting to investors and the FDIC, including

8 the impact that these investments have had on the

9 community. And we would continue to provide some

10 technical assistance and monitor the fund just to

11 maintain its mission-driven focus. At the end of

12 the graphic, we just have an illustration of the

13 multiplier effect on equity capital. Many of the

14 investors that we've talked to are treasurers of

15 large companies that are not bankers, so they

16 really want to see a multiplier effect. 

17 Initially, many of them thought we can just make

18 a deposit.

19 And this really shows that deposits,

20 while they're useful, are one for one, whereas

21 equity capital can be multiplied in some cases up

22 to ten times. Then at the conclusion of the

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1 graphic, it's just for more information, the FDIC

2 has a mailbox, missiondrivenfund@fdic.gov. I'm

3 going to pause there and see if folks -- I'm

4 going to turn it back over to you, Jonathan.

5 MR. MILLER: Thank you, Betty. Thank

6 you, Nikita. Two terrific presentations. Does

7 anybody have any -- Alden.

8 MEMBER MCDONALD: Thank you very much.

9 MR. MILLER: You're good now.

10 MEMBER MCDONALD: I'm good now, thank

11 you. I wanted to take this opportunity, as an

12 MDI, to congratulate Chairman McWilliams and

13 Betty Rudolph for their work in -- for MDIs, for

14 supporting MDIs. All of the information in

15 Betty's presentation is real stuff that has given

16 immediate relief, immediate returns, and is

17 making all MDI banks much stronger. I'll give

18 you just one example. Our bank grew

19 significantly during the Black Lives Matter,

20 which then reduced our capital to asset ratio.

21 Because of the work that the FDIC is

22 in the process of doing, we were fortunate to get

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1 additional capital, which is going to put us back

2 in compliance. But more importantly than that,

3 the additional deposits that we received with the

4 support of the FDIC and others is allowing us to

5 do another $100 million in mortgage lending.

6 So the multiplier effect that Betty

7 mentioned is very real, and we all should see

8 some significant growth in our communities with

9 this program. Hats off, again, Chairman

10 McWilliams and Betty Rudolph for the work that

11 you've done. On behalf of all of the MDIs, I say

12 thank you.

13 MR. MILLER: Thank you very much,

14 Alden. Naomi, do I see your hand up, or is that

15 from earlier?

16 MEMBER CAMPER: No, that's from

17 earlier.

18 MR. MILLER: Okay. Listen, I want to

19 thank, again, all the members of the Committee. 

20 Are there any other questions? I don't see any

21 other questions, so let me turn the meeting back

22 over to the Chairman.

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1 CHAIRMAN MCWILLIAMS: Thank you,

2 Jonathan. This is usually when we serve some

3 food, so I think, I don't know, you failed. I'm

4 hungry. Thank you all so much. It's been a

5 wonderful discussion and a much needed

6 discussion, frankly, at these times.

7 We will continue to meet and consider

8 these issues, as I believe they're only going to

9 become more pressing the further the pandemic

10 stretches into the future.

11 Some of the communities that we have

12 been discussing today are going to be even harder

13 hit in the months to come, unless we are able to

14 actually restart our economy. Thank you all for

15 your time. Thank you for your dedication.

16 Thank you, most of all, for being so

17 passionate about these issues and sharing that

18 passion and your expertise with the FDIC. Marty,

19 I would love it if you would just give us the

20 closing words.

21 DIRECTOR GRUENBERG: I don't know that

22 I have any, Jelena, just to thank this remarkable

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1 group for their willingness to invest the time

2 and effort to give us the benefit of their

3 thoughts. They have given us enormous value over

4 a number of years.

5 I think they've made a real impact. 

6 I just really want to thank them, particularly

7 during this time, for their participation. These

8 are difficult days, so it's nice to see some

9 friendly faces, I have to say. Thank you all,

10 and hope to see you again next time.

11 MR. MILLER: Thank you all very much,

12 and we'll be in touch about next year's meetings. 

13 Thank you. Bye-bye, now.

14 CHAIRMAN MCWILLIAMS: Thank you,

15 Jonathan, as well, and the team. Bye-bye.

16 DIRECTOR GRUENBERG: Thank you, bye17 bye.

18 (Whereupon, the above-entitled matter

19 went off the record at 5:11 p.m.)

20

21

22

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A

AARP 148:4

ABA 7:16 19:16 23:20

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aligning 42:4

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55:22 66:1 79:17 89:6

89:13 96:11 102:4

103:2 107:2 108:7

120:5

Americans 55:2 88:19

151:18 154:10,12,13

154:14,17,22 155:7

157:15

amidst 155:8

amount 32:5 44:14

50:17 65:12 101:12

101:14 104:21 156:12

167:15 188:10 189:11

amounts 129:11

amplified 38:19

analogy 53:15

analyses 121:1

analysis 74:10 88:12

120:13 125:18

analysts 156:19,21

analytic 120:12

Analytics 3:6 120:10

anecdotal 158:8

anecdotally 158:7

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207

anemic 70:19

Angela 18:4

announce 7:13 188:21

announced 29:22 63:17

announcement 12:17

55:22 64:12

announcements 66:10

annual 24:22 49:22

79:10 201:6

annually 75:4

answer 88:13 147:21

176:3

answering 36:10

answers 45:22

Ant 164:22

anti-competitive 64:10

anti-competitiveness

64:14

anti-discrimination

191:10

anticipation 102:11

anxious 123:14 168:11

anybody 10:7,9 27:19

178:10 202:7

apologize 6:4,18

100:12

app 72:12 95:2,5

appears 71:19 112:3

appendix 109:10

117:15,16

apples 131:1,1

applicants 189:3

applicational 165:22

applications 125:3,6,15

125:18 126:3,11,18

126:20 127:3,6

applied 149:7

apply 130:10 175:15,17

appreciate 13:15 49:6

123:8 180:19 192:1

appreciation 124:3

180:14

approach 11:13,15,16

73:8 86:16,19 87:12

approaching 180:10

appropriate 55:4

appropriations 52:20

approved 193:20

approximately 78:12

78:18 79:5 82:20

112:21 124:16 149:6

apps 72:11,14,16

April 127:14 128:2

136:3 140:9,15

143:18,21 145:15

181:10

April/May 148:16,18

area 8:2 13:14 23:12

30:1 61:4,13 162:8

183:17

areas 15:5 17:15 29:15

31:21 33:11 34:9

59:22 117:18 118:9

131:15 159:6,15

167:3 179:21,22

186:16,19 188:12

190:19

arena 65:13

argue 87:15

arrangements 200:12

arrival 145:15 187:21

arrive 143:1,14

artists 30:1

Asia 164:18

Asian 154:11,16

aside 67:8

asked 8:11 50:16 81:11

82:8 83:1 84:2,17

92:22 96:15 97:9

157:6 175:3,9,14

176:6 177:12

asking 8:15 91:10

aspect 18:22 160:6

aspects 184:12,21

185:13

aspiration 36:1

Assessing 27:21

asset 120:21 162:7

202:20

assignments 190:8

assistance 15:10

130:14,16,19,19

131:4,5,7,9,12,13,17

131:20 132:13 145:7

160:14 170:1 189:2

194:9 195:5 201:10

Assistant 2:6 121:16

Associate 2:9 3:17,21

120:9

associated 79:8 112:19

113:2

Association 1:15 7:16

33:20 56:1

Atlanta 1:14

attachments 196:12

attainment 79:12

attendees 18:11 19:14

attention 9:4 61:3 63:12

136:12 138:14 178:14

attract 186:6 199:7

attracted 186:17

attracting 185:17

audio 31:9 48:16

182:10,11,12,13,15

August 125:7 138:7,7,9

144:13,13,17 145:6

145:20 148:19 152:3

154:5 193:20 197:14

198:2

authorizing 73:5

auto 71:13 102:9 126:5

126:13,15,21 130:12

131:3 161:15,18,18

161:20 172:22 175:19

automatic 71:15

availability 12:14 159:3

159:18

available 23:16 27:17

28:9 48:11 56:6 58:6

88:10 117:21 118:10

118:13 157:19,19

166:18 177:8

average 129:12 156:5

164:1 186:10,19

avidly 57:21

avoiding 83:4

aware 22:10 26:21

awareness 23:15 24:4

194:20

axis 130:18

B

back 8:6 33:16 35:11

37:21 44:1 45:2 49:2

52:11 61:18 65:4

69:11 107:14 111:6

118:18,22 119:15,22

120:19 142:19,22

144:21 148:19 154:14

160:3 162:17 167:11

170:8 180:13,17

182:18 183:2 185:8

192:1,3 202:4 203:1

203:21

backbone 24:12

backed 71:15

background 158:11

backward 34:7

bag 27:10,18

balance 52:14 82:13

130:22 137:16,17

138:14 153:18

balances 127:10,13

128:9,11 137:12,13

137:14 138:17,19

145:18 153:6 156:1,5

balancing 46:12 47:10

bank's 98:20 99:1,5,15

banked 22:5 55:2 75:11

77:15,22 78:12 79:5

81:6,9,11,21 82:2

84:7,17 85:10,16 86:1

86:2 90:4,8 91:12,21

92:2,9,13,22,22 98:12

98:19 100:11,20

101:1,5 103:7,21

108:14 114:21 115:5

115:17

bankedness 180:6

bankers 1:15 7:16

55:22 66:8 67:3

192:13,22 201:15

banking 2:8,19 9:5 11:4

13:3 14:21 20:17 21:1

22:3 24:18 25:12 28:2

28:3,6,21 29:6 42:18

43:10,15 51:13 53:3

54:5,7 55:19 56:2,16

56:17 57:2 64:14 74:4

75:14 90:10,13 91:1,4

92:10,13,14 116:11

123:8 157:15 159:2

164:11,22 165:6,12

165:14 167:5 177:20

181:9 182:7 184:10

190:5 192:15 193:12

BankOn 24:14 25:3,7

55:6

banks 4:4 10:20 11:22

12:3 13:4,9 15:1 17:5

20:5,20 21:5,9,15

23:22 24:2,12,14 25:1

25:3,7 27:6 32:13

33:5,21 35:22 37:1

47:3,4 48:10 50:22

63:14 64:6,7,18,22

65:6 66:11 70:16

73:19 75:2 76:4 78:5

82:20 84:4,9,14 87:10

117:10,11 153:7

172:15 176:18 177:1

177:2 184:2,14,16

186:2 191:9 193:3

194:18,19 195:22

196:18 198:6,11,17

198:22 199:5 200:2,3

200:6 202:17

bar 81:13,18 82:15,18

95:18

barely 88:7 141:9

Barr 1:13 8:17 9:19

24:7 64:4 168:12,13

barrier 15:7

barriers 190:14

bars 80:6,9,15 81:19

90:12,16,17 91:16,21

92:4,12,13 98:6 99:8

103:12 139:6 140:14

base 106:14

based 36:16 65:10 66:5

72:6 118:6 125:17

128:6 143:3 159:8

UNOFFICIAL/UNREVIEWED
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Neal R. Gross and Co., Inc.

208

193:2

baseline 142:12 143:5

143:6 144:22

basic 29:21 54:12 65:2

69:12 150:2

basically 85:16 129:5

175:14

basis 11:14 104:17

125:4 161:20 166:2

166:19 170:6 173:4

173:14

BEA 141:7

bear 133:18

bearers 184:17

becoming 28:15,15

29:7 113:22

bedrooms 21:8

beef 57:9

beefing 8:1

beginning 32:18 45:17

117:19 139:5 146:8

176:21 194:7

behalf 203:11

behavior 64:10 133:9

believe 28:19 135:22

145:6 188:15 204:8

belonging 197:16

benchmark 150:16

benefit 43:9 140:4

142:17 148:22 154:22

205:2

benefits 15:12,12 43:17

54:15 118:5 133:12

139:2,20 140:11

141:14 142:1,13,15

143:14,16,18,20

144:3,4,5,8 145:19

156:14 179:13 188:19

best 26:20 33:10 62:21

123:19 149:2 168:20

185:17

better 7:6 11:15 16:13

36:2 52:21 58:8 89:15

168:15 184:16 191:19

194:10

Betty 2:17 181:7,8,21

182:17,21 183:1

192:1,3 202:5,13

203:6,10

Betty's 202:15

beyond 9:9 10:20

142:20 143:2 160:12

163:9,10 192:8

BHAGAT 3:4

bi-weekly 140:18

bidder 194:12

bidding 194:10

big 12:5,22 22:9 24:6

53:10 55:9,18 56:10

58:2 64:11 66:10,11

106:22 140:6,12

151:14

bigger 51:4,7 52:22

biggest 49:21 128:8

bill 11:7 87:21 94:18

95:11,17,20 96:7,9

97:3,22 98:14 99:13

99:18 100:2 169:3

billion 60:20,22 61:1

billions 196:1

bills 94:21 114:17,21

bimodal 98:7,11

biographies 74:1

bit 5:10,16 47:20 49:18

54:4 56:14,18 64:3

76:13 84:19 96:4

105:6,21 106:2 107:1

119:17 121:8 123:21

132:1 147:14 148:6

149:3 155:20 158:6

169:9 177:13 178:4,6

180:9 181:4 185:8

194:15

Black 32:20 35:19,20

36:21 40:3 41:7,11

42:9 69:6,10 79:17

80:4,5,11 96:11 103:2

103:8,14 104:2,6

108:7 118:12 142:6

154:13,14 155:1

156:20 157:10,15

159:7 162:15 164:3

176:6,9 188:6 202:19

Black-led 35:21,22,22

36:1,3 37:1,2

Blacks 104:22 105:4

Blackwell 18:4

blanket 132:12

blocked 33:17

blood 70:21

bloodstream 50:14

BLS's 163:13

blue 82:15 137:1

138:14 139:6 143:17

board 2:6 59:14 61:6,15

110:16,19 111:7

193:20

boat 51:4 52:22

bolstered 193:22

boost 138:4 139:2

143:7

boosting 143:8 146:15

borne 154:16

borrow 50:11

borrowers 67:9 69:7

129:21 130:2,4,9

132:21 198:16

borrowing 147:21

150:2

Bostic 1:14 14:2,5 20:3

50:6 65:22 88:17

89:19

Boston 17:5

bottom 81:19

bound 45:14

box 197:11

branch 22:13 90:6 91:7

91:13,14,19,22 92:3,7

92:8,16 115:14,15,18

115:22

branches 31:17 76:8

91:9 115:20 116:5

159:12,14 163:10

197:3

break 101:10 109:2,11

119:12 129:8 150:1

151:2 154:9

breakdown 165:17

breakdowns 173:13

breaks 101:5 163:20

175:5

bridge 36:20 37:7

brief 121:12 124:1

briefly 8:13 72:4 73:21

86:18 181:6

bring 19:8 61:2,12

133:18

bringing 13:19 19:7

42:22 61:21 147:19

172:7

brings 157:22

broad 106:13,21 134:8

148:15

broadband 160:22

161:2 163:9 167:6

broader 9:9 107:8

125:8

broadly 13:10 73:1

90:21 102:20 108:10

146:20

broken 100:10,15

brokers 173:22

brought 61:5 104:20

195:1

Brown 2:6 3:6 40:3 41:7

41:11 42:10 121:15

124:4

brutal 10:1,10

bubble 173:1

bubbling 174:6

budged 141:10

budget 135:16

buffer 142:7 145:22

146:5 169:4

buffering 147:3

buffers 138:4

buffeted 178:4

build 40:17 41:11,22

42:13 52:14 58:13

61:7 120:21 184:5

188:3 191:17 195:8

199:10

building 19:6 169:6

built 32:9,10 76:15

bullet 193:4

bump 149:1 150:8

152:7

bunch 53:22 133:16

bureau 2:7 75:5 121:17

125:9 163:6

Burns 18:5

business 10:15 21:6

33:20 45:3,4,5 47:19

67:8 169:14,16

181:17 187:13 192:18

195:18 198:19,20

201:3

businesses 10:4,16

11:1,3 26:8,15 27:2

32:12,21,21 36:3 37:4

51:17 160:8

buttressed 178:9

buy 171:9

buying 171:5

bye 205:17

bye- 205:16

Bye-bye 205:13,15

C

California 2:11 27:5

38:9 122:10 165:19

call 16:1,6 23:17 29:12

34:11 36:10 50:7

55:19 68:18 72:19

76:21 79:22 95:1

119:11 125:15 177:1

177:2,7 180:12 185:6

198:3,4 199:2

called 25:2 27:20 64:18

198:5

calling 15:16 16:10,17

35:18 41:6,8

campaign 23:15,21

24:2

Camper 1:15 7:15

19:15,19,22 25:10

174:16,19 176:15

203:16

Canada 18:6

Candidates 186:16

capability 42:18 94:20

capable 120:11

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Neal R. Gross and Co., Inc.

209

capacity 199:10

capillaries 50:13,16

51:6 52:6,21 53:10

capital 158:14 159:3,18

160:6,17 161:11

162:5 165:15 166:10

166:18 199:4 201:13

201:21 202:20 203:1

capture 172:11

car 171:17 172:8,9

173:16

card 71:14 85:9,17,20

86:1,8,13 95:6,7

102:5 115:13 126:20

127:3,10,13 128:8,15

128:22 130:13 131:8

134:14,15 153:6

cards 75:15 85:12,21

127:9 128:20 149:10

153:18 157:8 175:19

care 38:22 42:22

career 15:7 16:2 186:18

189:18,22 190:6,7,15

Careers 15:16

CARES 23:4 128:3

130:5,12 136:1 140:6

144:10 146:15 160:13

Carmen 18:7

Carolina 196:21

carry 183:22

carrying 153:17 171:18

case 52:12 89:17

123:12 126:12 157:1

157:5 163:5 168:1

195:18

cases 50:21 64:22

101:3 131:16 168:9

172:12,14,16 201:21

Casey 18:7

cash 12:15 34:10 72:12

94:21 95:5 101:20

114:12,20 115:2

141:5 142:7

cashers 42:11

cashing 87:8,17 94:14

95:11,17,20 96:6,9

97:3,6,11,21 98:14

99:12,18 100:1

catapulted 54:8

catch 73:8

categories 107:4 150:2

151:3

categorize 87:3,10 88:9

categorizing 88:11

category 126:8

caused 76:3

cautiousness 171:2

CDC 55:1

CDFI 37:2 52:20 181:3

196:22 197:3,10

198:17 200:3

CDFIs 10:19,20 13:9

31:22 36:1 50:13

51:22 195:16 197:4

197:12 198:1,8,13

201:1

cede 37:21

celebrate 191:14

census 75:5 131:14,15

center 2:11,11 3:22

16:16 22:18 57:4 72:1

74:5 122:9,10

central 13:6

CEO 1:14,18,19,20,21

2:2 3:16 7:17,19 25:2

CEOs 72:15 195:1,2

certain 87:3 113:7

116:1 158:4

certainly 32:14 59:20

61:9 154:7 178:1

certification 65:11

certified 24:14 51:22

55:5,14

cetera 157:8 201:4

CFE 56:12

CFPB 124:7

chair 9:21 13:2 14:8

30:14 35:8 62:11

chairman 1:10 2:5 5:6,9

5:13,20 6:1,10,12

8:18 9:14 11:10 30:14

49:11 62:11 74:21

120:17 183:9 187:21

192:19 194:15 197:13

202:12 203:9,22

204:1 205:14

Chairwoman 5:5 59:10

challenge 8:13 47:2,14

47:17 49:3,19 50:15

51:5 53:10 62:17

67:10 180:6

challenged 45:8 49:20

challenger 64:22

challenges 37:14,17

76:7 114:9 122:13

157:14 158:5 187:9

challenging 114:14

115:16 122:19

Chamber 16:19

chance 13:15 167:18

168:2

change 15:22 18:18

19:10 44:20 125:20

127:12 128:21 137:14

154:20

changed 70:11 125:6

126:3 194:4

changes 29:14 89:2

90:21 97:5,13,14

106:20 112:17,19

113:2 116:20 188:9

189:7

changing 44:19 122:20

148:18 168:5 196:19

channel 197:19

character 101:11

characteristic 98:12

characteristics 96:5

97:15 106:13 109:14

110:18

characterize 133:14

characterized 139:6

charge 34:11

charged 172:2

charitable 56:6

chart 125:14,17 140:10

141:7 155:12

charts 78:9 118:1 132:5

134:8 137:11

Chase 2:10 3:5 121:20

133:19

chat 17:22 18:3 167:20

167:22

check 28:13,21 41:19

42:11 87:8,16 94:14

95:11,17,20 96:6,9

97:2,6,11,21 98:14

99:12,18 100:1

106:11 115:2,13

137:22 142:17 143:1

176:12 184:1

checked 106:6 167:19

checking 65:2 85:18

137:13 145:18 149:9

checks 114:12 179:13

Chicago 133:17

chief 1:15,17 2:8 7:15

14:21 74:4

Children 18:6

chime 48:18

China 164:18,19 165:3

choice 170:11

Christina 2:3 7:20 68:1

68:1 73:15

Chu 2:8 73:20 74:7,15

74:20 77:9,17 85:1,6

85:11 86:12,21 87:2

88:16,22 89:20 93:21

100:5,14,21 101:9

103:18 104:3,14

105:10,13 107:10,13

108:21 109:7 110:22

111:21 117:6 118:19

chunk 136:8

circumstances 40:1

79:9 112:17 113:3

122:19

Cisneros 1:16 25:17,18

55:7

cited 82:12,16,17,20,22

83:11,13,18 193:9

cities 1:21 3:10 24:8

29:18 47:21 56:18,20

57:10 135:19 186:15

city 1:16 26:2,4,12

29:18 159:6,16

civil 16:9 34:5

Clara 42:20

clarified 175:18

clarify 172:7 175:13

clarity 90:7 92:20,21

93:12,17 98:20

class 160:10,11,11

162:3

classified 173:11

clean 132:16

clear 47:6 53:2 55:19

57:14 98:22 99:5,5,9

99:14,16,16 164:17

clearly 84:4,10,16 93:2

93:6,10 99:11 146:14

179:9

click 196:7

clicked 197:8

clients 22:5

CLIFF 16:1,1

close 60:8 126:15

closed 18:9 159:12

closely 16:4 127:9

closer 171:12

closing 4:8 204:20

closures 129:16,19

clothing 137:2 138:20

clouded 169:22

Co-Founder 3:16

coaches 28:5

coaching 43:3

coalesce 56:2

Coalition 27:5

coalitions 19:6

Coast 38:10

COCHRAN 3:8

coined 50:12

cold-comp 126:1

collaboration 22:1

23:13

collaboratively 22:21

collapse 159:10

colleague 77:5 181:12

colleagues 37:17 38:12

133:16

collected 75:9 121:2

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Neal R. Gross and Co., Inc.

210

196:17

collecting 67:7

collectors 34:7

college 39:9 96:21

colleges 188:6

color 7:11 10:2,4,8

32:18 68:22 180:1

Columbia 75:20

combine 118:3

combined 161:7

combines 148:9

come 26:13 29:1 31:13

33:14,16 45:20 49:2

56:4 68:18 112:11

119:15 154:8 158:19

178:15 200:4 204:13

comes 60:13 69:1

71:20 161:9 163:7

164:10

comfortable 187:15

coming 38:20 39:2 46:5

46:6 69:20 139:19

144:21 159:11 173:1

177:18 178:14

commensurate 131:20

comment 149:2 170:13

194:2

commentary 14:12

commented 72:5

comments 8:21 11:11

14:10 53:1 168:3

178:16 185:1

commercial 5:14 11:19

11:22

commission 54:1

188:11 189:2

commitment 19:3

commitments 196:1,13

197:20,20 200:12

committed 191:1

committee 1:3,9 6:6,19

8:4,12 9:11 12:10

13:20 19:16 24:16

25:10 29:13 30:20

34:14 39:15 42:1

44:11,13,13,16 49:7

49:15 61:21 62:2,6

73:16,22 74:22

120:18 121:6 123:4

123:15,21 167:17

168:4 177:12,15

178:2,10,20,22

180:12,16 181:1,3

183:10 192:5,15,21

199:2 200:4,8 203:19

Committee's 25:14

common 97:4 114:18

115:3,5

communicate 84:5

communicated 84:9,15

93:6,9 99:10

communicates 93:3

communication 98:21

99:1,6,15

communities 7:11 8:5

8:14 10:2,4,8,11

11:20 12:5,12 13:5,10

13:13 32:17 38:21

40:4 45:8 48:13,18

51:18,19 53:6 159:7

160:20,21 161:5

162:4 163:1,8,11

166:15 174:7 180:1,2

184:14,16 186:1

189:5 193:16,17

196:19 197:22 198:6

198:9,12,16,18,22

199:5 201:2 203:8

204:11

community 2:18 7:8

11:9,22 13:3,4,9

14:20 15:1 24:12

26:11 29:16 30:7 46:6

46:16 47:3,4,12,16,16

48:3,9 50:10 56:3

64:7 65:6 73:17

162:14,15 181:9

182:7 184:3 191:11

192:13,15,20 194:17

199:12 201:3,9

companies 45:20,20,21

46:2,15 66:4 72:22

161:21 195:20,22

197:21 201:15

Company 1:20

comparable 140:22

compare 110:3 135:3

161:4

compared 82:1 83:15

109:19 113:13,15

114:21 125:21 126:4

134:15 142:14 157:12

comparison 60:8,11

129:13 131:1

complement 83:21

complete 190:22

completed 60:10 193:5

completely 20:13 22:12

28:12

compliance 203:2

compliant 26:3

complicated 65:14

66:17 151:22

comply 191:9

components 147:20

composition 128:7

comprehensive 193:5

compressed 105:22

computer 6:3

concept 159:1 197:18

198:1

concerned 22:15 23:8

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139:6 146:9 163:7

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launched 16:17 17:5

23:20 24:9,13 30:2

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leaders 26:1 56:22

leadership 63:19 186:5

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leading 12:19 142:16

159:22 172:20 173:22

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47:20 67:6,11 161:13

166:12,22 172:22

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lengths 58:7

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117:17 124:21 127:20

141:14 144:19 145:1

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106:1 107:8,8 109:3

110:12 126:16,19

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150:20 197:7,11

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liquid 155:22 156:5

liquidity 121:22

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listening 26:1

literacy 167:7

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54:4 56:14,18,20 59:6

64:3 76:13 84:19 96:4

105:6 107:1 119:17

121:8 129:9 131:3,7

131:22 147:14 148:5

149:3 155:20 169:9

175:2,5 178:4,6 185:8

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125:17 126:7 131:3

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187:8

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107:1 110:16,16

111:17 114:15 115:1

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73:9 79:21 93:15

104:8 109:13 128:6

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104:5 106:1,2 108:5,6

108:16 111:19 116:7

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mainstream 21:1 54:7

maintain 199:9 201:11

major 126:5 179:18

majority 136:4

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makers 172:8

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28:7 39:11 40:13

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200:9 202:17

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127:1 129:6 143:16

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110:22 119:2

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101:15 103:19 105:13

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130:18 131:2 132:15

169:18 170:7,16

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160:4 182:12 192:16

192:17 193:10 194:6

194:8 195:16 197:4

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200:22 202:13,14

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104:16 105:11 107:12

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167:21,22 180:20,21

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modern-day 157:14

modernization 189:9

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moment 31:9 34:12

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54:6 62:21 187:12

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52:11 61:1 82:13

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97:6,10,21 98:6,8,13

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month 17:4 35:17 79:21

79:21 93:15,15 96:13

96:13 104:8,8,11

113:15,15,17,17

114:18 132:10,11

144:13 145:21

monthly 79:10 124:17

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92:17 94:13 102:3,9

107:21 113:20 115:19

145:20 146:1 204:13

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125:13 127:8 128:18

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107:3 118:7 124:13

134:4 136:10 143:11

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San 1:16 25:20 27:7

40:15

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Santa 42:20

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92:20,21 93:1,11,16

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SAUNDERS 3:21

save 109:18 110:7

111:15 116:18

saved 107:20 108:18

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Saves 3:13

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109:11 147:20 150:2

161:12 170:22

savings 69:22 76:9

85:18 108:4,5,9,12,15

108:20 109:1,5 110:9

110:19 111:7,18

116:14 128:3 133:10

133:13,21 138:4

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149:9 150:8 153:6,16

161:12 166:9,13

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55:10 66:1 70:12

126:11 128:2 154:18

155:13,14,19 156:5,8

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183:22 193:11

saying 153:12,15 154:2

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199:10

scammer 73:6

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190:5

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132:19,21 150:15,22

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136:20 137:5

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104:14 117:6 119:1

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196:14

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198:18 199:9

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193:15 198:8

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121:3

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90:12,15,17 92:4 98:6

103:12 106:14 110:17

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Shannon 124:10

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179:19

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Thirdly 31:8

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93:5,9 99:10,14

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80:22 95:10,15 97:8

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59:12 68:11 75:1,8

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172:15

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Treasurer 1:16

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150:16 165:5 191:15

UI 140:20 141:1 142:4

144:3 145:19 170:18

171:11

ultimate 36:1

ultimately 184:9

unable 54:11 60:16

70:20

unacceptable 24:22

unbanked 12:15 20:11

20:14 54:10 62:19,22

63:3 75:11 76:5 77:14

77:22 78:19 79:1,2,7

79:12,15 80:1,3,5,8

80:11,13,16,17,19,21

81:3,10,11,14,20 82:1

82:3,8,12,21 83:9,16

84:2,6,12 85:10 86:1

86:2,6,13 88:18 89:2

89:5 92:19 98:12

100:12,20 101:6

108:14,16,17 112:5

112:16,19,22 113:6

113:10,19,22 114:2

114:19,20 115:3

118:3 174:8,12

179:18

unbeknownst 28:12

unbelievably 119:9

under-banked 86:17,22

87:4,11 88:10

underbanked 174:12

underscoring 58:17

understand 26:21

66:21 67:5 124:7

184:15 194:10 196:4

197:5

understanding 57:15

140:11 148:10

understood 27:17

undertaken 193:19

unemployed 16:12

113:8,11 139:3

142:13,18 144:16

155:9

unemployment 39:21

70:14 71:5,7 112:12

122:1 131:16 133:12

137:9 139:1 140:17

141:6,8,13,21,22

149:1 160:13 165:10

165:18,20

unequal 147:3

unexpected 78:2

101:21 107:18,20

108:12,15,18 109:12

109:18 110:7 111:9

111:13,15 116:18,20

unfortunately 50:3 77:1

unified 34:4

unilaterally 11:16

unintended 32:8

union 1:17 43:2 55:5

65:3 75:14 78:14,21

85:19 86:4 87:22

94:19

unions 27:7 35:22 37:2

50:22

unique 148:8

United 59:19 95:3 161:8

165:9 166:3

universities 188:7

University 1:13 133:16

unmanageable 156:20

unmute 9:18 25:15

unmuted 14:5

unprecedented 21:10

unpredictable 83:6

unsecured 33:15

Unsurprisingly 132:12

update 182:5 193:20

updated 124:17,19

125:19

updates 118:16

updating 177:22

upper 160:10,11

uptick 72:15

upward 45:15 151:21

urban 2:1 53:7 159:6,15

160:19,19 161:4

164:20

urgency 71:19

urging 176:22

Ursula 18:4

usage 101:5,10

USC 148:5

USC's 148:10

use 18:2 28:4 58:8 63:8

75:13 76:17 85:20

87:16,18 88:5 90:8,10

90:12,16,18 91:1,2

94:16 95:1,8,12 96:8

96:8,19 97:6,11,11,19

98:13,17 99:2,7 100:6

101:17,18,20 102:3

102:14,19,20,22

103:9 104:4,9 105:4

105:20 107:7 112:9

114:11,16 122:21

124:12 146:10 150:22

168:22 175:13 178:7

200:6 201:1

useful 55:4 122:16

124:18 201:20

users 96:16

usually 95:5 186:21

204:2

usurious 33:16

V

value 137:18 181:12

205:3

values 45:16 58:21

valve 141:4 146:11

variability 113:4

variables 106:19 118:1

variation 126:2

varied 79:21 93:15

104:8

varies 95:7

variety 118:1 155:15

157:7

various 26:21 50:7

152:19 153:20 161:16

162:19 163:5 165:1

165:13 166:6 195:4

vary 79:13

vast 33:1 136:4 137:6

156:12

vehicle 161:21 162:1

vendor 65:5

vendors 64:16 65:12

Venmo 72:12 95:4

Verizon 5:14

version 47:3,7

versions 84:18 112:20

versus 104:19 143:17

176:18

vertical 136:2

vice 2:13 30:14 62:11

122:3

video 9:18 14:5 59:6

174:16,21

videos 194:16,18

Videoteleconference

1:10

view 30:20 73:16

133:20 134:8 140:13

147:19 174:11

viewed 165:21

views 18:19

virtual 9:2 76:13 123:9

123:18 158:4

virtually 7:5 41:2 50:3

59:12 120:20

Visa 102:3

visit 22:5

visited 91:14,22 92:3

92:16,18 115:18

visiting 22:12 70:15

76:8

visits 90:6 91:8,19 92:8

92:9 115:14,16,22

voices 192:12

volatile 79:22 96:13

113:8,15 116:3

volatility 79:11

voluntary 65:10

vulnerability 167:2

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vulnerable 69:4 151:3,5

151:16 152:10 153:10

W

wage 7:10 16:12 46:1

wages 15:5 136:15

142:3 145:7 169:22

wait 115:13 143:13,19

waiting 60:3 119:10

Wall 70:3 72:8

wallet 46:18

wanted 12:6 13:18 15:2

17:1 20:4,19 32:3

61:12 83:8 148:2

196:3 200:13 202:11

wanting 11:11

wants 27:19

warning 28:14

wasn't 32:9 54:19 55:3

129:17

waste 63:9

watched 184:3

way 8:5 12:6 20:17 21:6

22:8,19 29:2,13 32:2

38:21 39:5 45:9 47:13

67:6 73:8 112:13

115:5 138:7 141:5

143:4,19 151:22

152:6 171:11,20

183:21 195:9 196:3

196:19 197:5

ways 16:21,22 20:20

26:20 29:4 30:6 38:16

38:19 40:6 45:8 70:16

115:3 122:20 130:20

155:5 168:7 170:10

173:21 195:19 196:4

wealth 17:13 34:12

36:12 41:10 184:5

191:17

wealthier 161:5 166:15

wears 70:5

weather 199:6

WebEx 76:18 100:6

website 27:20 78:5 95:2

117:11 157:18 196:6

197:12

WeChat 164:22

weeds 150:19

week 55:22 56:9 70:2

122:6 125:21 143:22

144:12 145:1,2

week-by-week 125:4

weekly 140:17

weeks 41:9 142:16

147:12 188:21 196:2

Weinstein 2:20 77:5,7

77:10,19 85:12 86:10

89:1 90:2 93:19 94:2

106:5 109:9 110:5,15

110:21 111:4 114:7

117:8

welcome 5:4,20 6:4,5

6:14 9:1 13:18 19:15

19:16 21:1 38:13

44:10 49:7 62:1 67:22

74:3 119:22 168:2

178:16 182:18 192:3

welcomely 169:15

well-being 124:19

wellbeing 122:7

went 21:22 88:19

110:19 119:20 148:19

155:7 159:20 192:7

205:19

weren't 27:15 32:10

West 81:1

Western 87:22 94:19

white 14:16 69:9 80:13

103:8,16 104:2,21

154:10,16,22 157:13

176:9

Whites 105:5

who've 30:1 52:15

wide 32:10 74:11

widely 118:10

widen 154:3

widening 68:19

willing 7:5,12 47:4

161:22

willingness 205:1

window 194:7

winning 194:12

wish 37:18

withstand 71:2

witnessed 183:20

woman 70:18

women 2:16 155:14,18

155:19 181:5,14

187:20 188:17 190:15

wonder 86:17 105:8

168:19 169:7,8

wondered 175:1

wonderful 13:17 38:8

49:21 59:11 68:3

204:5

wondering 100:17

word 22:2 27:4

words 37:13 81:5 105:2

109:3 204:20

work 11:11 12:3,20

25:14,15 26:16 28:2

29:13 42:1,6,13 44:15

44:16,19 49:2 53:2,3

53:19 54:17 57:5,12

65:13,15 70:9,10 74:8

124:6,12 127:22

136:10,11 141:17

146:10 163:11 164:12

170:8 181:2 182:8

183:17 184:12 190:2

191:2,19 196:20

202:13,21 203:10

worked 10:22 22:21

30:15 32:13 33:6

188:17 189:16

workers 16:12 69:7,9

136:13,20 138:15,17

138:19 141:16 144:7

144:9,14 146:15,17

169:21

workforce 15:3 16:16

16:22 39:9 41:4

181:17 184:8,13

185:20 186:7,13

187:4,7 188:18

189:19 191:2,19

working 10:11 15:21

16:4 23:2 26:7,18

27:12 31:17 41:7

42:10 49:1,14 56:19

56:19 57:13 79:19

103:3 104:7 108:8

133:15 136:18 137:2

162:3 184:8

WorkingNation 16:19

workplace 188:19

191:4

works 12:21 40:20

world 37:20 120:3

158:4 160:9

worried 153:12,14

worry 12:2

worrying 70:22 71:12

72:13

worse 11:21 15:14

169:16

worsening 132:17

worth 10:14 152:6

wrap 157:16

write 112:6

written 124:22

X

Y

Y 130:17

year 39:6 51:10,14 79:1

87:9 96:21 127:12,12

127:16 129:6 130:9

148:17 151:19 152:9

154:5,19 155:3,15

157:3 178:14 193:5

194:22

year's 148:14 151:17

154:1 205:12

years 12:19 19:2,2

44:14 48:2,2,3 50:21

51:17 60:3 80:21 81:2

82:7,11 87:2 108:19

111:9 147:17 148:13

148:17 149:20,21

151:13 154:15 158:16

162:12 181:11 186:20

193:13 205:4

yesterday 198:2

yield 61:18

York 72:9

young 39:2,4,19 40:1

40:21 41:3,14 42:3,10

43:2

younger 96:11,21 97:4

youngest 187:12

youth 39:2 40:3 42:21

Z

zero 130:21 132:14

155:2

Zone 18:6

0

0.5 80:18

1

1,200 136:7 137:22

1,500 24:1

1.1 79:3

1.5 79:5

1:00 1:10

1:04 5:2

10 127:15 143:6 197:13

100 26:11 29:22 36:15

56:19,20 203:5

100,000 156:4

11.2 91:3

11.9 95:15

12 50:2 82:5 90:9 91:15

92:17 94:13 102:3,9

107:21 113:20 115:19

155:17 162:13

12.2 80:10

12.8 80:18

120 4:6

122 21:21

124 78:12

13.4 114:21

13.8 80:7

14 39:6 144:16 146:4,7

164:8

14,000 156:7

14.7 99:11

140 26:5

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149 160:3

15 43:20 89:9 111:6,15

119:13 154:13 160:5

15,000 103:13 109:17

15.3 89:10,10

15.6 90:11

150-160 66:4

15th 136:3

16 43:21

16.3 80:9 89:7

164 160:2

17 89:9,18 111:5

17.2 95:21

17.9 82:2

170 51:16 52:4

175 60:5

18 89:7,10,10 192:21

18.5 80:7 83:17

18.8 92:17

180 130:11

182 4:7

187 32:14

19 89:18 111:6,6 162:13

19.7 116:22

1989 182:11

1990 194:1

19th 143:21

2

2,000 25:1 60:9 138:2

2.5 80:14

2.9 98:9

20 60:20 104:17,22

167:21

20,000 33:5

20.1 99:16

200,000 31:17

2001 160:5

2008 159:13 160:1

174:1

2009 75:4 78:17

2011 113:1

2013 113:18

2015 80:5 97:9 102:14

102:16 107:22 108:10

108:13 114:15 162:12

2016 159:13

2017 79:2,6,7 81:8 89:5

90:10,19 91:1,5,16,20

92:1,5 97:10,10

107:22 110:3,5

114:15,20 116:21

2018 160:3,5 181:10

2019 4:4 73:18 75:2,8

76:1,11 77:6 78:11,19

79:2,6,8 80:5,11,14

80:17 81:3,8,11 82:4

82:7 84:1 86:13 89:5

90:10,20 91:6,11,20

92:2,6 94:10,15 95:10

95:21 97:10,10,18

101:18 102:15,16

103:10 107:19 108:11

108:14,19 109:16

111:8 112:7 113:1

114:4 115:17 116:17

129:2,18 154:21

155:19

2020 1:7 6:14 24:17

129:18 147:10 151:11

154:21

205 4:8

21 90:14,20

215 160:2

22 1:7 153:11

22.8 90:14

23.5 103:14

24 39:6 111:15 154:12

24.3 90:19 91:6

24.8 81:16

24th 194:3

25 111:12,17 163:18,19

186:19 195:2

250 36:18 198:13

26 153:13

27 83:13 162:14

27.7 86:12

28 151:19

28.4 92:1

28.9 110:7

29 151:17 152:9 153:15

164:3

29.0 82:18

29th 35:17 36:16

3

3 131:3,7 192:10

3,000 18:11 19:14

3:24 119:20

3:35 119:13,15

3:37 119:21

30 16:8 132:7 160:5

173:5 181:11 195:1

30-40 137:16

30.3 103:14

30.8 92:5

30th 130:8

31.1 96:2

31.7 81:21

33 152:2

33,000 75:9

330 52:2

34 90:11 111:12,17

34.1 113:19

35 170:2

35.4 92:1

35.6 109:17

35.8 116:17

36 90:13,14

36.3 92:5

360 130:11

39 154:10,11 164:2

4

4 77:16 92:15 152:7

4,000 138:2

4.4 98:7

4.6 98:9

4.8 102:18

4.9 95:17

40 50:21 134:15

401(k)s 149:10

41 26:13 153:17

43 163:14 164:2

45 103:16 163:15

46.8 84:8 115:18

47 81:8,9

48 124:13

48.8 82:5

48.9 82:12

5

5 92:15,17 124:16

179:18,19 196:7

5.4 78:17 79:3 113:1

5.5 95:16,22

5:11 205:19

50 57:10 70:10 75:19

104:19 113:12,14

126:12 142:3 163:18

170:2

50,000 104:18 105:1,7

107:6 110:6

50.4 81:4

51 186:20

54 152:9

55 163:19,19

55.1 84:7

56.2 81:14

56.3 107:21

57 164:19

57.1 111:9

57.8 107:22

6

6 4:2 131:4 159:13

196:9

6,000 60:2 159:12

6,400 148:14

6.5 79:3

60 21:20 75:22 142:3

187:14 198:17

600 141:13 143:7

144:14 145:10

61 157:10 176:6

63 160:22

64.2 107:19

65 32:17 111:8

65.4 111:15

66.1 114:19

67 152:4

67.9 102:16

7

7 129:14 141:11 196:17

196:20

7.1 23:9 78:18

70 23:6 31:16 32:17

61:1

70.7 111:12

72.5 102:17

73 157:12 176:7

73.8 110:9

74 4:4

75 21:22

75,000 96:20 105:3

109:21 110:8

76 157:12 176:8

78.2 109:19,20

79 161:3

79.9 92:15

7th 17:22

8

8 196:22

8.1 102:18

8.2 113:1

80 61:1 105:3 131:6

800 31:15

82 159:14

83 91:11 105:4

835 149:6

86 91:15

87 161:6

89 186:11

9

9 4:3 50:2 197:7

9,000 156:6

90 21:14 32:21

91 105:5

92.1 93:8

95 78:11

97.3 93:7

UNOFFICIAL/UNREVIEWED
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COURT REPORTERS AND TRANSCRIBERS 

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C E R T I F I C A T E

This is to certify that the foregoing transcript 

In the matter of: 

Before: 

Date: 

Place: 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

 

 ----------------------- Court Reporter 

232

Meeting of the Advisory Committee

on Economic Inclusion

FDIC

10-22-20

teleconference

UNOFFICIAL/UNREVIEWED