Minutes

of

The Meeting of the FDIC Advisory Committee on Economic Inclusion

of the

Federal Deposit Insurance Corporation

Held in the Board Room

Federal Deposit Insurance Corporation Building

Washington, D.C.

Open to Public Observation

October 22, 2019 – 9:00 A.M.

The meeting of the FDIC Advisory Committee on Economic 

Inclusion (“ComE-IN” or “Committee”) was called to order by 

Martin J. Gruenberg, Director, Board of Directors of the Federal 

Deposit Insurance Corporation (“Corporation” or “FDIC”).

The members of ComE-IN present at the meeting were Robert A. 

Annibale, Global Director, Citi Microfinance and Community 

Development; Janie Barrera, Founding President and CEO of 

LiftFund, Inc.; Raphael Bostic, President and CEO, Federal 

Reserve Bank of Atlanta; Jose Cisneros, Treasurer, City and 

County of San Francisco, California; Martin Eakes, CEO, Self-Help 

Credit Union; Don Graves, Director of Corporate Responsibility, 

KeyBank; Wade Henderson, President and CEO, Leadership Conference 

on Civil Rights, and Counselor to the Leadership Conference on 

Civil Rights Education Fund; Maurice Jones, President and CEO, 

Local Initiatives Support Corporation (LISC); Andrea Levere, 

President, Corporation for Enterprise Development; Margaret 

Libby, President, MyPath; Alden J. McDonald, Jr., President and 

CEO, Liberty Bank and Trust Company, New Orleans, LA; Jonathan 

Mintz, President and CEO, Cities for Financial Empowerment Fund; 

Pamela Patenaude, Director, Habitat for Humanity; and John C. 

Weicher, Senior Fellow and Director, Center for Housing and 

Financial Markets.

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October 22, 2019

Michael S. Barr, Dean, Ford School of Public Policy, 

University of Michigan Law School and John W. Ryan, President and 

CEO, Conference of State Bank Supervisors, were absent from the 

meeting.

Members of the Corporation’s Board of Directors present at 

the meeting were Jelena McWilliams, Chairman, and Martin J. 

Gruenberg, Director. Jonathan Miller, Designated Federal Officer 

for the Committee and Deputy Director, Division of Depositor and 

Consumer Protection, also was present at the meeting.

Corporation staff who attended the meeting included James L. 

Anderson, Michelle B. Baker-Dubbs, Sherry A. Betancourt, Annmarie 

H. Boyd, Leonard N. Chanin, Kymberly K. Copa, Carolyn D. Curran, 

Tim Davin, Christine M. Davis, Stephanie M. Downing, Keith S. 

Ernst, Lekeshia Frasure, Nicholas P. Frazier, Peggi J. Gill, 

Glenn S. Gimble, Ryan M. Goodstein, Shannon N. Greco, Emerson B. 

Hall, Edward J. Hof, Arleas Upton Kea, Joan M. Lok, Christopher 

Lucas, Elizabeth Ortiz, Mark E. Pearce, Paul Robin, Betty J. 

Rudolph, Marguerite Sagatelian, Richard M. Schwartz, David L. 

Sharp, Lori Thompson, Jeffrey Weinstein, Lauren A. Whitaker, and 

Angela A. Wu.

Also Present were Kanav Bhagat, Managing Director of 

Financial Market 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; Jason Gross, CEO and Co-Founder, Petal; Daniel Nestel, 

Senior Director Government Relations, FICO; and Lauren Saunders, 

Associate Director, National Consumer Law Center.

Director Gruenberg opened the meeting as Chairman McWilliams 

was delayed. He began by reminding everyone that the Committee 

has been in existence at the FDIC for over ten years and is an 

extraordinarily valuable resource for the FDIC to address issues 

core to the FDIC’s mission.

Director Gruenberg then introduced the new members of the 

Committee, detailing their positions and activities in the 

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community: Raphael Bostic is the president of the Federal 

Reserve Bank in Atlanta; Don Graves is the Director of Corporate 

Responsibility at KeyBank; Maurice Jones is President and CEO of

LISC; Margaret Libby is founder and CEO of MyPath; Jonathan Mintz 

is the founding President and CEO of Cities for Financial 

Empowerment; and Pam Patenaude recently served as Deputy 

Secretary of the United States Department of Housing and Urban 

Development (“HUD”) and currently serves on the Board of Habitat 

for Humanity.

Director Gruenberg then thanked the Committee members whose 

terms are ending: Janie Barrera, Wade Henderson, Andrea Levere, 

John Ryan, Phillip Swagel, and John Weicher. He also 

acknowledged Ted Beck, Kelvin Boston, Ester Fuchs, Pat McCoy, 

Bruce Murphy, and Manuel Orozco whose terms ended last year.

Director Gruenberg next turned the discussion over to 

Jonathan Miller, Deputy Director, Division of Depositor and 

Consumer Protection (“DCP”), moderator for the meeting, and 

mentioned that, in a change from previous meetings, Committee 

members would be provided the opportunity to share their thoughts

on issues of importance to the Committee.

Before turning the discussion over to the Committee members, 

Mr. Miller reminded the Committee about the 2020 National 

Interagency Community Reinvestment Conference in March in 

Colorado sponsored by the FDIC, the Fed, and the OCC and invited 

Committee members to attend. 

Next, Mr. Miller invited Member Annibale to share his 

thoughts. Member Annibale began the discussion by noting that 

the Committee will continue to consider that the density of low 

income communities often corresponds to a lack of services, 

including lack of access to financial services. Member Annibale 

acknowledged the work that the Committee has done with the City 

of New York and Mr. Mintz’s work with Cities for Financial 

Empowerment (CFE).

Member Annibale continued, mentioning that the Committee 

has, in the past, discussed the lack of access to financial 

services for people with complex lives, particularly for people 

with disabilities or a household including someone with a 

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disability. Member Annibale noted that 18 percent of people with 

disabilities are unbanked and that only 37 percent of people with 

disabilities are employed compared to 70 percent of people 

without disabilities. He further noted that half of those with 

disabilities that are working earn approximately $25,000 a year.

Discussing the success of the CFE program, Member Annibale 

noted that the program develops coaching and training of 

financial counselors around the needs of people with 

disabilities. He indicated that the program will expand 

nationally in the near future. Member Annibale also detailed an 

ATM pilot program, which opened up the ATM network to give 

customers free access to ATMs in an expanded network.

Member Barrera began her update by acknowledging the 25th

anniversary of LiftFund, an organization, she explained, that 

works with consumers considered high risk. Member Barrera then 

provided an overview of the type of work LiftFund does with micro 

and small business lending to consumers with average credit

scores of 590. She noted that LiftFund has a 96 percent

repayment rate and that the Committee needs to look at other 

methods besides credit scores to determine credit-worthiness. 

Stressing the importance of access to capital for small 

businesses, Member Barrera explained that LiftFund is piloting 

programs with credit unions that would address some of these

issues for those considered a credit risk by other institutions.

Next, Member Barrera made note of an issue related to 

expansion of the customer base for micro-lenders and Community 

Development Financial Institutions (“CDFIs”). She advised that 

the newly created National Association for Latino Community Asset 

Builders (“NALCAB”) is a national fund for small businesses. She 

indicated that NALCAB will provide access to capital and 

technical assistance to its small business partners.

Member Barrera closed her comments by acknowledging Chairman 

McWilliams’ advocacy of de novo banks and mentioning Member 

Barrera’s involvement with the start-up of Piermont Bank, a 

recently opened, woman and minority owned de novo bank in New 

York City. 

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October 22, 2019

Member Bostic began by noting that the Federal Reserve had 

just finished a strategic planning process where two issues 

highlighted were the challenge of economic mobility and the 

challenges of innovation in financial products. Member Bostic 

advised that the issue of financial wellness and financial 

stability is critical for families. 

Member Bostic continued, mentioning that the Federal Reserve 

is working to provide training and curriculum for fifth and 

eighth graders to improve collective financial sophistication. He 

also highlighted innovation in the fintech space as an area that 

could be used to increase consumer access to financial services 

and capital. Next, Member Bostic highlighted issues surrounding 

affordable housing and access to capital for consumers. He 

explained that the Federal Reserve Bank of Atlanta has been 

thinking about Community Reinvestment Act (“CRA”) reform and 

deployment of capital for small businesses. 

Member Bostic reminded the Committee of the differences in 

the challenges to economic inclusion in urban and rural 

locations. He asked that the Committee remain mindful of the 

special challenges that rural areas face including issues related 

to capital access, workforce development, and the strength of 

institutions, such as community banks. Member Bostic closed his 

remarks by asking that the Committee think about the cost of 

capital for lower income families. 

Member Cisneros reported that his Office of Financial 

Empowerment in San Francisco continues to deliver a number of 

important programs including the longest running Bank On program 

that continues to connect unbanked consumers to Safe accounts in

the city. He highlighted the importance of providing financial 

coaching and getting youth into bank accounts by the time they 

get their first paycheck. He advised that the city of San 

Francisco offers a first of its kind children's savings account 

program through a partnership with Citibank and the local public 

school district.

Member Cisneros suggested that the Committee consider the 

importance of physical brick and mortar bank branches and cash 

deposits for low income consumers who are trying to safely and 

economically access the banking system. Member Cisneros then

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discussed the challenges faced by some consumer populations who 

are not able to open up a bank account because of negative 

banking records. 

Member Eakes reported that Self-Help started more than 30 

years ago under the premise that understanding wealth in families 

would help advance progress on race in the south. Noting that

black and Latino families hold only one-tenth the amount of 

wealth that white families hold, he explained that Self-Help’s

solution has been to figure out how to raise the homeownership 

rate for families of color up to the national average.

Member Eakes continued by explaining that Self-Help started 

by making loans to mostly black single mothers. He stated that in 

the first ten years, Self-Help made $100 million in loans to 

families who had been unable to receive a home loan from any 

other source. Member Eakes then provided additional detail 

regarding the wealth gap and the role of homeownership in 

communities of color, noting that in the last 20 years, the 

actual gap between white and black families has gone from 

$100,000 to $150,000. He then continued by discussed the 

importance of homeownership as a means of closing the wealth gap 

and indicated that access to cash reserves and down payment 

assistance programs are important aspects of the issues 

surrounding homeownership in communities of color.

Member Eakes concluded his remarks by highlighting issues 

such as payday loans, direct deposit advance, and overdraft fees 

as mechanisms that take cash reserves out of households. He 

encouraged the Committee to continue to monitor abuse in these 

areas. Member Eakes also commented on some issues surrounding 

“rent-a-bank” charters and fintech innovation. He cautioned the 

Committee to remain vigilant on abusive practices in these areas 

as well.

Member Graves began by sharing that KeyBank's mission is to 

help communities thrive by providing community members the

opportunity to live a life of dignity. He reported that, in 2018,

KeyBank received its ninth straight outstanding CRA rating and 

that it has received an outstanding CRA rating every exam since 

the inception of the CRA. He then provided additional detail 

regarding the types of products offered by KeyBank, such as the

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KeyBank Plus Check Cashing product which is meant to directly 

compete with check cashers, offers a very low fee, and is

available at any of KeyBank’s branches. Member Graves then 

highlighted some of KeyBank’s new programs, such as the E-Z Up 

program, which is an innovative new tool that allows clients to 

automatically save money for the payment of debts. 

Member Graves then discussed issues around financial 

literacy. Member Graves noted that banks are challenged in terms 

of outreach around financial literacy. He also acknowledged that

consumers face challenges going into a bank and not knowing what 

to do when faced with different types of accounts, and finding it 

easier to go to the check casher that they know. 

Concluding his remarks, Member Graves discussed challenges 

surrounding the CRA as it relates to achieving goals of reaching 

rural and poor communities. He noted that there are issues with

how to provide CRA credit, how to apply for it, and access versus 

pricing and risk. He suggested that a new approach might be 

helpful. 

Member Henderson mentioned that The Leadership Conference is 

the nation's leading civil and human rights coalition with over 

200 participating national organizations. In acknowledging that 

the current meeting was his last, Member Henderson recounted the 

work that the Committee has done over the years, from the 

foreclosure crisis to Dodd-Frank and through the growth of 

fintech and new banking services. 

Member Henderson highlighted the work that has been done to 

bring communities of color into the banking system not only as 

consumers but also as employees by promoting Fair Chance Hiring 

Section 19 policy reforms to make it easier for banks to bring in 

employees who are rebuilding their lives. He also acknowledged 

Chairman McWilliams and the FDIC’s role in making reforms to the 

Community Reinvestment Act.

Member Henderson then urged the Committee to continue to 

monitor the “rent-a-bank” practice where some lenders may be 

taking advantage of relationships with federally regulated banks 

to do an end run around state usury laws.

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Next, Member Henderson urged the banking industry and the

regulators to address the troubling racial gap in homeownership.

He noted that homeownership is the primary means that most 

families build wealth, and housing is the biggest single 

expenditure that families face every month. Member Henderson 

advised that priorities for the Committee should be ensuring that

lenders are able to serve all communities and ensuring that 

credit access is inclusive and sustainable. Member Henderson 

concluded by noting that the biggest financial threat to low 

income communities of color and the economy moving forward is 

student loan debt.

Member Jones discussed the importance of providing financial 

literacy coaching, case management, and workforce development to 

members of the community to help prepare them to take advantage 

of the jobs market. Member Johnson also acknowledged 

homeownership disparities in minority communities. Member Johnson 

concluded his remarks by stressing the importance of working

together across race, class, and geographies to achieve economic 

inclusion goals.

Member Levere acknowledged FDIC staff for their help in 

providing data that has been incorporated into the Prosperity Now 

scorecard. Member Levere highlighted the ability of Prosperity 

Now to examine two metrics, including economic performance and

state rank by racial disparities. Member Levere noted that 

Prosperity Now uses a framework that focuses on savings for now, 

soon, and later as a means of expanding savings in accounts that 

are safe. 

Member Levere then discussed several innovations and pilot 

programs aimed to build short and long term savings for 

consumers. Concluding her remarks, Member Levere urged the 

Committee to keep in mind that only two women will remain on the

Committee after her departure and encouraged the Committee to 

remember that as new members are added. 

Member Libby reported that MyPath works on behalf of youth 

and young adults by focusing on financial capability and youth 

workforce settings. She stressed that consumers aged 14 to 24

years’ old who are starting their first employment experience 

need access to banking and supports around saving. Member Libby 

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acknowledged the FDIC’s work on Safe accounts and non-custodial 

savings accounts. She suggested that the Committee now focus on 

programs that would provide transactional account and debit card 

access to young people. Next, Member Libby discussed issues 

surrounding identification requirements for accounts for youth 

who may not have the required government issued photo 

identification.

Member McDonald started his remarks by reporting on the work 

that his bank does on economic inclusion. He expressed gratitude 

to the FDIC for its work related to minority depository 

institutions. He then discussed issues facing the community he 

serves, including widening of the income gap and the affordable 

housing crisis. He said that his bank forecloses on fewer than 

three houses per year and that they finance consumers with credit 

scores down to 550, and some with loans with 100 percent

financing as a way of supporting wealth building and home 

ownership in his community.

Member McDonald mentioned that his staff incorporates 

financial education into services offered to customers. He 

advised that the bank is also looking at hosting a summer camp 

for youth to teach them about the marketplace, investments, and 

how to use their income dollars when they become wage earners.

Member Mintz started by commenting on the need to bridge the 

divide between technological advances with the rise of branchless 

banking, and consumers’ need to make cash deposits and cash 

checks. Member Mintz reported that the Cities for Financial 

Empowerment Fund (“CFE Fund”) participates in the Bank On 

initiative, working with various coalitions around the country to 

support their work and certify accounts that meet the national 

standard. He mentioned that CFE Fund partnered with the Federal 

Reserve Bank of St. Louis and four financial institutions to 

collect account information. He then provided additional details 

regarding information collected on Bank On accounts. Member Mintz 

concluded his remarks by seeking feedback from the Committee on 

the role, standards, and expectations for branchless providers.

Member Patenaude began her remarks by reporting on her 

experience and ongoing work with the community in Puerto Rico and 

Habitat for Humanity. Highlighting her passion for the work in 

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Puerto Rico, Member Patenaude stated that thousands of families 

are unbanked in Puerto Rico due to an informal economy. She then 

discussed the various title issues that have been problematic for 

disaster survivors in Puerto Rico. She suggested that the 

Committee could assist in helping Puerto Rican citizens access 

the financial mainstream as they receive Federal Emergency 

Management Agency (“FEMA”) fund disbursements. 

Member Weicher highlighted a project where his organization

created a new property tax reversion system for the State of 

Michigan. Member Weicher then discussed the loss of wealth that 

occurred in all households since the Great Recession. He 

continued by discussing the wealth gap and homeownership 

disparities in African American and Hispanic households. 

The first panel of the day recessed at 10:27 a.m. and 

resumed at 10:45 a.m.

Developments in Credit Scoring and Underwriting

Mr. Miller introduced the moderator of the first panel, 

Keith Ernst, Associate Director for Consumer Research, Division 

of Depositor and Consumer Protection.

Mr. Ernst reported the results from the most recent

Household survey which showed that one in five households did not 

have access to mainstream credit in the last 12 months and likely 

lacked a credit score, hindering their ability to obtain credit

when challenges arise. Mr. Ernst commented on the importance of 

alternate underwriting technologies to evaluate creditworthiness 

for consumers with thin credit files.

 Mr. Ernst first introduced Jason Gross, CEO and co-founder 

of Petal, a credit card company that deploys innovative 

underwriting and extends credit to a broad set of consumers. 

Next, Mr. Ernst introduced Kelly Cochran, Deputy Director of 

FinRegLab to share results of research exploring how cash flow 

based underwriting may complement traditional credit measures. 

Following his introduction of Ms. Cochran, Mr. Ernst noted that

Daniel Nestel from FICO would discuss the company's efforts to 

use information beyond traditional credit bureau data to better 

score consumers’ credit risk. Mr. Ernst stated that Lauren 

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Saunders from the National Consumer Law Center would highlight 

potential concerns regarding these developments.

Mr. Gross began his remarks by providing background 

information about Petal stating that the company began four years 

ago with the purpose of addressing credit access issues in the 

marketplace. He noted that the consumers most affected by credit 

access issues are young, Black or Hispanic, or from immigrant 

families. He reported that the vast majority of these consumers 

with thin credit files have, in fact, other financial data, the 

type of which is regularly used in the underwriting of other 

financial products not being utilized in the decision to extend 

small-dollar credit.

Mr. Gross explained that Petal uses technology to access 

data such as verification of income, liquid assets, and other 

monthly expenses. He further explained that this technology 

allows Petal to use an automated underwriting process. Mr. Gross 

shared that Petal offers a credit card product specifically 

designed for consumers that are new to credit.

Next, Ms. Cochran began her remarks by stating that the 

FinRegLab is a new non-profit research organization which began 

in 2018 and is focused on understanding the ways that technology,

data, and financial services drive financial inclusion and 

encourage safe and responsible products. Ms. Cochran reported 

that FinRegLab’s first major research project focused on the use 

of cash flow data. Next, she noted that FinRegLab’s second 

report examined small business lending and that a third report 

will look at the consumer market and policy issues overall. 

Providing additional details about the reports, Ms. Cochran noted 

that the first report analyzed three specific research questions:

how predictive was the data that was used; how successful were 

companies in reaching applicants that might have trouble 

accessing credit under more traditional metrics and the fair 

lending implications of these results.

Discussing the results of the report, Ms. Cochran indicated 

that FinRegLab found that cash flow data was in fact predictive 

in the instances where FinRegLab had loan level data to study.

Ms. Cochran noted that, with regard to inclusion and fair 

lending, FinRegLab generally found evidence that the various 

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study participants were able to reach different, possibly 

underserved applicants. Ms. Cochran then discussed a graphic 

intended to display differentiation of risk by cash flow metrics 

of various categories of borrowers. Concluding her remarks, Ms. 

Cochran mentioned that it is encouraging to see that many 

institutions and financial services companies are beginning to 

use cash flow data to serve consumers.

Mr. Nestel began his remarks by noting some of the work that 

FICO has done related to fraud detection and real-time payment 

systems. Mr. Nestel then acknowledged that, while FICO has 

provided scoring for nearly 200 million consumers, there are 

approximately 53 million consumers who have no FICO score. He 

explained that FICO has begun to look at alternative credit 

scoring data in categories such as financial account data, nonfinancial account data, and rent and utility payment data to 

develop a new credit score that can be used in the unsecured 

lending marketplace. 

Next, Mr. Nestel discussed FICO’s newest initiative, the

UltraFICO score. He explained that the UltraFICO score is unique 

because it is derived from consumer-contributed data, and would 

be driven by consumers providing permission to access their bank 

account information. He noted that, like the FICO score, the 

UltraFICO score ranges from 300 to 850, making it very easy for 

lenders to understand. He noted that FICO has partnered with 

Experian and Finicity, a fintech data aggregation company, for 

the UltraFICO score initiative. Mr. Nestel concluded his remarks 

by discussing some of the observations from the UltraFICO 

initiative. Mr. Nestel noted that using UltraFICO’s two 

criteria: no negative balances within the last three months and a 

positive balance of at least $400 average over the past three 

months, approximately 70 percent of consumers in the applicant 

pool will experience a score increase. He said that FICO is 

engaging in a pilot program with three financial institutions 

with the goal of completing the pilot program by the start of 

2020.

Ms. Saunders began her remarks by noting that this year 

marked the 50th anniversary of the National Consumer Law Center, 

which works to ensure that low income and vulnerable consumers 

are protected in the financial marketplace, have access to safe 

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and affordable products, and are protected against products that 

are destructive to their financial health. Ms. Saunders noted 

that cash flow underwriting is a promising form of underwriting. 

Ms. Saunders then cautioned against mandatory reporting of 

consumer information by utility companies. She advised that 

allowing consumers to voluntarily grant access to utility data 

would be the more prudent way of gathering this type of 

information. Ms. Saunders also noted that she has some questions 

regarding cash flow underwriting and the use of information from 

data aggregation companies. Next, Ms. Saunders raised some 

concerns regarding the difference between assessment of credit 

risk from the lender's perspective and affordability or ability 

to pay from the borrower's perspective. She also raised privacy 

and security concerns regarding the use of data from data 

aggregation companies. Concluding her remarks, Ms. Saunders noted 

the importance of disparate impact analysis tools and thanked 

FinRegLab for looking at disparate impact in their study.

Following the presentation, Mr. Ernst provided panelists and 

Committee members an opportunity to share general observations. 

Mr. Gross responded to Ms. Saunders comments on consumer 

permission for the use of data. He noted that a consumer’s 

financial record is the basis on which a provider can serve a 

consumer in the financial service marketplace. He commented that 

looking at the alternate financial data allows companies to make 

credit decisions that are more accurate and more inclusive by 

looking at the full financial picture of a consumer. 

Committee members then offered a number of comments and 

suggestions. Member Mintz commented on the need for ensuring 

that standards for underwriting are inclusive of accounts, such 

as Bank On accounts, which do not allow consumers to have a 

negative account balance. Member McDonald asked the panel 

questions about the interest rate and delinquency history of the 

products discussed during the presentation. In response, Mr. 

Gross advised that Petal uses risk-based pricing for the APR on 

the card, which ranges from approximately 15 percent to 26 

percent. He also noted that Petal has seen thin file customers 

underwritten using cash flow data, perform approximately twice as 

well as thicker file consumers with the same credit score 

underwritten using traditional metrics. Ms. Cochran responded 

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that FinRegLab looked at products using a variety of price 

structures including both fee-based systems and interest rate 

pricing. Member McDonald asked Mr. Nestel about specifics on 

rating an account that has a 30-day delinquency but no 60 or 90-

day delinquencies. Mr. Nestel responded that a consumer who does 

not have a charge-off or a serious delinquency beyond 90 days 

would benefit from the UltraFICO rating system. Member McDonald 

suggested that the FDIC might consider how examination procedures 

could offset some of the negative guidelines for underwriting 

based on cash flow for institutions. Committee members and 

panelists then discussed issues surrounding data aggregators and 

compliance with the Fair Credit Reporting Act and Gramm-LeachBliley act as well as issues involving transparency of the models 

and systems used by financial services providers. 

Mr. Ernst then announced that the meeting would recess for 

lunch. Accordingly, at 12:11 pm, the meeting stood in recess.

Mortgage Markets Update

The meeting reconvened at 1:23 pm, at which time Mr. Miller 

introduced Mark Pearce, Director, Division of Deposit and 

Consumer Protection, as the moderator of the mortgage markets 

update panel. Mr. Pearce then introduced Ryan Goodstein, Senior 

Economist, Division of Deposit and Consumer Protection, to 

discuss insights from the 2018 HMDA data. He also introduced 

Lariece Brown, Quantitative Analytics Director, Freddie Mac, to 

discuss transition rates from rental to home ownership for 

African-American households and Kanav Bhagat, JP Morgan Chase 

Institute, to discuss post-closing liquidity and the importance 

of liquidity for sustainable home ownership.

Mr. Goodstein opened by noting that his presentation would 

focus on the increasing role of non-banks in the mortgage market

and the effect on consumers’ access to mortgage credit. He 

provided a brief overview of the growth of non-bank lenders in 

single family mortgage originations, noting that as growth has 

occurred in the non-bank lender share of originations, a decline 

in the share of bank originations has occurred disproportionately 

among the largest banks. He said that data suggests that nonbank lenders are filling a gap in access to mortgage credit by 

making loans to borrowers that some banks, particularly large 

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banks, seem less willing to serve. Continuing, Mr. Goodstein 

noted that credit score distribution differences among non-bank 

lenders and banks could be attributed to differences in the 

markets that the banks and non-bank lenders serve. Chairman 

McWilliams queried whether the loans Mr. Goodstein had analyzed 

were Home Ownership and Equity Protection Act (“HOEPA”) loans. 

Mr. Goodstein responded that these were not HOEPA loans. Mr. 

Goodstein continued by discussing credit availability and the 

level of risk in the market. Mr. Goodstein concluded his remarks 

by advising that, while credit availability has expanded, the 

pool of borrowers receiving loans is of relatively low risk

profile. 

Ms. Brown then provided an overview of the status of the 

minority housing gap in the years since the last economic crisis. 

Ms. Brown noted that a divergence in home ownership rates postcrisis in that ownership rate gaps have risen. She said in 2019, 

blacks are 30 percentage points less likely than whites to own a 

home, and Hispanics are 26 percentage points less likely than 

whites to own a home. Ms. Brown then summarized several research 

studies that analyze the home ownership gap in the post crisis 

period. Next, Ms. Brown summarized Freddie Mac’s research 

reporting that age, income, unemployment, and housing demand are 

determinants as to which consumers acquire a new mortgage. She 

advised that student loan debt, gender, and education level 

factor less into the transition to homeownership than do other 

attributes. Ms. Brown also reported that the impact of the 

various consumer attributes varies by geography. She concluded 

her remarks by detailing some of the work that Freddie Mac has 

done to address these discrepancies.

Mr. Bhagat began his presentation by noting that JP Morgan

Chase Institute is a research organization with the goal of using 

JP Morgan Chase’s administrative data to perform economic 

research. He noted that the JP Morgan Chase Institute has 

analyzed the role of liquidity, equity, income level, and payment 

burden as determinants of mortgage default. Summarizing the 

results of the research, Mr. Bhagat advised that, based on the 

study’s analysis, liquidity may be a more important determinant 

of mortgage default than equity, income level, and payment 

burden. Mr. Bhagat also discussed research implications related 

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to the impact of total debt to income analysis as a default 

preventative mechanism. 

In the discussion following the panelists’ presentations, 

Committee members asked several questions and offered a number of 

suggestions and observations. Member Annibale asked if thought 

had been given to the idea of offering consumer incentives for 

retaining post-closing liquidity. In response, Mr. Bhagat 

suggested that an escrow account would be one way to implement 

this type of incentive. Member Levere asked Ms. Brown whether 

Freddie Mac’s research had taken into consideration student loan 

debt as a contributing factor to home ownership gaps. Ms. Brown 

replied that student loan debt does matter but that other factors 

such as credit scores and income matter more. Member Mintz asked 

Mr. Bhagat whether his research findings regarding the importance 

of liquidity accounted for income disparities. Mr. Bhagat 

responded that the study did not control for typical underwriting

variables, such as income. Panelists and Committee members then 

discussed policy and regulatory considerations for lending 

institutions to determine the appropriate level of risk for 

mortgage loans. Member Bostic then asked Ms. Brown whether 

Freddie Mac’s research could be done at the state level, to which 

Ms. Brown replied that Freddie Mac would be interested in 

researching state level implications.

Following additional comments by Committee members, Mr. 

Miller thanked the panelists and announced the panel would recess 

until the start of the final panel of the day. Accordingly, the 

meeting stood in recess at 2:41 pm. 

Sustainable Bank Accounts

Reconvening the meeting at 2:51 pm, Mr. Miller introduced 

Emerson Hall, Associate Director, Consumer Community Affairs, as 

moderator for the sustainable bank accounts panel. Before 

introducing the panelists, Mr. Hall remarked that one of the key 

challenges to expanding participation in the nation’s banking 

system is getting the attention and commitment of unbanked and 

underbanked consumers. He noted that the panel would showcase and 

address several effective strategies that have helped to increase 

the rates at which consumers obtain and use bank accounts. Mr. 

Hall then introduced the panelists: Lindsay Ferguson, Director of 

Strategic Engagement, America Saves; Katy Davis, Managing 

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October 22, 2019

Director, ideas42; and Amelia Erwitt, Managing Director of Cities 

for Financial Empowerment Fund (“CFE Fund”).

Ms. Ferguson provided an overview of America Saves and 

shared some of the communication strategies and interventions 

that have proven most effective for America Saves. Ms. Ferguson 

noted that America Saves focuses on two main audiences in its 

campaigns: 1) savers, which are individuals aspiring to save; and 

2) partners, which are organization that use resources and

messaging tools to promote saving in a targeted community. She

discussed the principles of social marketing and behavioral

economics that motivate and encourage Americans to save. She

noted that the America Saves pledge is a simple savings plan that

allows consumers to commit to saving. She mentioned that over

710,000 Americans have established saving goals and created

savings plans using the America Saves pledge. Ms. Ferguson then

shared data from America Saves’ recent surveys including that 60

percent of consumers who have taken the America Saves pledge are

saving money on a regular basis. She also reported that consumers

indicated the top savings goals were emergency funds, debt

repayment, and vacation or a special event. She also noted that

the top interventions used to encourage Americans to save are

text, blog, and social media. Ms. Ferguson then discussed various

America Saves programs geared toward encouraging consumers to

save money. Concluding her remarks, Ms. Ferguson noted that

America Saves week will be held in February of 2020 and invited

Committee members to participate.

Ms. Davis discussed topics addressing behavioral 

perspectives of consumers interacting with financial products. 

She explained that financial products are intangible and because 

consumers interact with them on a subconscious level, designers 

must consider the behavioral science about human behavior in 

order to more effectively predict how people might interact with

products. Ms. Davis remarked on the challenge of information 

decay in that humans do not remember information persistently 

throughout their lives. Ms. Davis noted that ideas42 has 

partnered with Alliant Credit Union to roll out a new remote 

deposit capture feature with the goal of encouraging members to 

accept the convenience of the new feature. Concluding her 

remarks, Ms. Davis emphasized the importance of designing 

products with communities as opposed to for communities and 

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October 22, 2019

taking note of the barriers that consumers perceive in their 

lives.

Ms. Erwitt provided an overview of the work that the CFE 

Fund does to negotiate safe and affordable banking accounts and 

highlighted CFE’s Bank On initiative as a program that places 

consumers into safe and affordable accounts. She noted that the 

CFE Fund worked closely with the FDIC to examine the segmentation 

of the unbanked population and whether consumers who were 

unbanked were unbanked for reasons that could be addressed by an 

effective communication strategy. She explained that Bank On 

focused on consumers with a motivational barrier for opening an 

account and eliminated from their research anyone who had a 

structural barrier, such as being listed on ChexSystems. Ms. 

Erwitt then discussed research findings including that messaging 

can affect a consumer’s perception of the banking system. She 

also noted that CFE Fund’s research indicated that tools such as 

direct deposit and the ability to have avoid overdraft fees made 

banking much more simple and stress free for the consumers who 

responded to CFE’s surveys. Ms. Erwitt also emphasized the 

importance of transparent cost structures without hidden fees for 

consumers. Ms. Erwitt concluded her remarks by noting that CFE 

Fund is in the process of developing tools and talking points for 

use by front line staff persons. 

In the discussion that followed, Member Jones asked Ms. 

Ferguson about the age range targeted by America Saves. In 

response, Ms. Ferguson noted that the parent campaign targets 

adults aged 18 and up, but that there is also a program for young 

workers that targets 16 to 24 year olds. Member Graves commented 

that the current scheduled week for the America Saves week 

coincides with tax season, which might pose difficulties for some 

banks. Member Graves asked Ms. Davis several questions regarding 

the data including questions about the demographics of those 

surveyed and the type of technology used by those surveyed. 

Member Graves next asked Ms. Erwitt about the timing of 

publication of the CFE Fund study. In response, Ms. Erwitt

replied that the study should be published soon after receiving 

input from the various Committee members. 

Next, Committee members and panelists offered comments on 

the efficacy of childhood savings accounts. Members Henderson 

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October 22, 2019

and Cisneros suggested that the FDIC further examine the issue of 

the efficacy of child savings accounts. Mr. Miller concluded the 

discussion by noting that the Committee has dedicated a 

significant amount of time to building and promoting the Safe

account standards. He further noted that there are banks in all 

50 states offering the Safe account. He commented that the panel 

discussion provided important information regarding how to drive 

consumers, particularly the unbanked, to those accounts. 

Closing the meeting, Chairman McWilliams thanked the 

panelists for their presentations. She also thanked the 

Committee for creating real and tangible solutions which have

helped to inform FDIC policy. She reminded everyone about the 

Interagency Community Reinvestment Conference, an interagency 

conference focused on CRA that is held every two years, to be 

held on March 9th through 12th in 2020 in Denver. She indicated 

that FDIC staff is also working on scheduling the 2020 ComE-IN 

meetings and agendas.

There being no further business, the meeting was adjourned 

at 4:00 p.m.

____________________________________

Robert E. Feldman

Executive Secretary

Federal Deposit Insurance Corporation

And Committee Management Officer

FDIC Advisory Committee on Economic 

Inclusion

545
Minutes 

of 

The Meeting of the FDIC Advisory Committee on Economic Inclusion 

of the 

Federal Deposit Insurance Corporation 

Held in the Board Room 

Federal Deposit Insurance Corporation Building 

Washington, D.C. 

Open to Public Observation 

October 22, 2019 – 9:00 A.M.

I hereby certify that, to the best of my knowledge, the attached minutes are accurate and 

complete.

________________________________ 

Jelena McWilliams 

Chairman

Board of Directors

Federal Deposit Insurance Corporation