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FEDERAL DEPOSIT INSURANCE CORPORATION

+ + + + +

ADVISORY COMMITTEE ON ECONOMIC INCLUSION

+ + + + +

THURSDAY, NOVEMBER 2, 2023

The Advisory Committee convened at 9:00 

a.m. EDT in the Federal Deposit Insurance

Corporation Board Room at 550 17th Street N.W.,

Washington, D.C., Martin J. Gruenberg, Chairman,

presiding.

PRESENT:

STEVEN ANTONAKES, Executive Vice President for 

Enterprise Risk Management, Eastern Bank

MARLA BILONICK, President and CEO, National

Association for Latino Community Asset 

Builders

RAPHAEL BOSTIC, President and CEO, Federal 

Reserve Bank of Atlanta

MICHAEL CALHOUN, President, Center for

Responsible Lending

NAOMI CAMPER, Chief Policy Officer, American

Bankers Association

THOMAS FOLEY, Executive Director, National

Disability Institute

KENNETH KELLY, Chairman and CEO, First

Independence Corporation and First

Independence Bank

MARGARET LIBBY, CEO and Founder, MyPath

BRANDEE McHALE, Head of Community Investing and

Development, Citi President, Citi 

Foundation

JONATHAN MINTZ, President and CEO, Cities for

Financial Empowerment Fund

MARIETTA RODRIGUEZ, President and CEO, 

NeighborWorks America

SUSAN WEINSTOCK, President and CEO, Consumer
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Federation of America
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ALSO PRESENT:

MARTIN J. GRUENBERG, Director, Federal Deposit

Insurance Corporation, Chairman

TRAVIS HILL, Director, Federal Deposit Insurance

Corporation, Vice Chairman

MICHAEL J. HSU, Acting Comptroller of the 

Currency

ELIZABETH ORTIZ, Deputy Director, Division of 

Depositor and Consumer Protection for 

Community Affairs, FDIC

ZOYA ALEEM, Senior Analyst, Abt Associates

CHECK BEVAN, Product Management Executive, 

Bank of America

DR. LIANNE FISMAN, Science and Research Senior 

Director, Qualitative Mixed Methods, 

Abt Associates

PAMELA FREEMAN, Senior Examination Specialist, 

Division of Depositor and Consumer 

Protection, FDIC

ALEX HOROWITZ, Project Director, Housing Policy 

Initiative, The Pew Charitable Trust

JONATHAN MILLER, Deputy Director, Division of 

Depositor and Consumer Protection, FDIC

TIFFANY PACK, Product Group Manager, Standby 

Cash, Huntington National Bank

KRISTOPHER RENGERT, Senior Consumer Researcher,

Division of Depositor and Consumer 

Protection, FDIC

MELANIE STERN, Vice President, Community 

Reinvestment Act Officer, and Director of 

Consumer Lending, Spring Bank

JESSICA THURMAN, Chief, Division of Depositor 

and Consumer Protection, FDIC

SARAH WOLFF, Senior Associate, Abt Associates

MONTRICE G. YAKIMOV, Acting Associate Director, 

Division of Depositor and Consumer 

Protection, FDIC
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C-O-N-T-E-N-T-S

Opening Remarks............................... 4 

Community Reinvestment Act (CRA) - Final Rule

Jonathan Miller.............................. 12

Pamela Freeman............................... 16

Kristopher Rengert........................... 20

Updating the FDIC Economic Inclusion

Zoya Aleem................................... 86

Dr. Lianne Fisman............................ 94

Members Roundtable.......................... 230

Bank Small-Dollar Lending Programs .......... 230

Chuck Bevan................................. 247

Tiffany Pack................................ 257

Closing Remarks............................. 293

Jessica Thurman.............................. 29

Strategic Plan............................... 82

Sarah Wolff ................................ 113

Alex Horowitz............................... 239

Melanie Stern............................... 234
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P-R-O-C-E-E-D-I-N-G-S

9:06 a.m.

CHAIRMAN GRUENBERG: Well, good 

morning, everybody. I always enjoy seeing this 

group, if I may say, but maybe particularly so 

today. I think we've got a terrific program 

planned for you all and we really are looking 

forward to your feedback and reaction to our 

presentation.

Let me begin, if I may, by welcoming 

a new member of our Advisory Committee, Marietta 

Rodriguez, who's the President and CEO of 

NeighborWorks America. And I have the privilege 

of serving on the board of NeighborWorks, and 

Marietta is a terrific leader and I know will add 

great value to the work of this Committee. 

So welcome, Marietta.

MS. RODRIGUEZ: Thank you for having 

me.

CHAIRMAN GRUENBERG: Glad to --

turnabout is fair play. Glad to see you in our -
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- 

(Laughter.)

CHAIRMAN GRUENBERG: -- board room for 

a change.

We've got a terrific agenda for today. 

We actually finalized the CRA rule.

(Applause.)

CHAIRMAN GRUENBERG: I know some 

people had their doubts --

(Laughter.)

CHAIRMAN GRUENBERG: -- including me. 

This took a long time, but in this case I really 

do believe the outcome was worth it. This is a 

landmark rulemaking, easily the most important 

since the 1995 revision, but in some ways the 

most important since the enactment of the 

Community Reinvestment Act in 1977. And the core 

provision of this rulemaking; we're going to 

obviously go through it in some detail, was to 

adapt CRA to the changing nature of the banking 

industry in the United States and the fact that 
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an increasing proportion of lending is done 

outside of the traditional branch-based 

assessment areas. 

And if CRA was not adapted to that 

evolution of the banking business in the United 

States, over time CRA would become increasingly 

irrelevant and an increasing proportion of 

lending by banks in the United States would not 

be held accountable to a CRA evaluation ensuring 

that all the communities in the service area of 

a bank where they're doing significant lending

are being served.

And this rulemaking will also add 

significant rigor to the CRA review process by 

requiring establishing data and benchmarks for 

the CRA evaluation. Put those two things 

together and you really have in many ways a 

transformational change to CRA. And we're going 

to talk about that in some length this morning. 

We very much welcome your feedback on it.

In addition, we have on the agenda a 
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presentation on the FDIC's Economic Inclusion 

Strategic Plan, which we'll very much welcome 

your feedback on. This afternoon we'll have a 

roundtable discussion with each of you and 

welcome your wisdom on current events and the 

outlook and your thoughts and conclude the day 

with an interesting panel of banks that are 

offering small-dollar loans on what appear to be 

a responsible and affordable basis for bank 

customers. So it's a rich program. I very much 

look forward to it. 

And if I may, let me ask Comptroller 

Hsu, who's with us here this morning, to offer 

any thoughts.

MR. HSU: Thanks so much, Chairman 

Gruenberg. It's great to be here. Great to see 

everyone again. 

Just to echo something that Marty 

said, I think the passage of CRA, the timing is 

very important because there are some head winds 

now on some of the things that we all care about. 
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Two being, One is I think the memories of some of 

the George Floyd, pandemic, impacts of the -- and 

my concern is always that sometimes these 

efforts, where there's a lot of consensus around 

everyone kind of joining hands and digging in on 

a lot of the issues that we're focused on here – 

good memories can fade and people kind of go 

back to a business-as-usual, which is something 

that we all constantly need to guard against.

And then the second is that in this 

economic environment it's getting tougher and 

tougher I think for folks who are vulnerable. 

And we're starting to see that in some of the 

data. And so I think it puts extra impetus and 

emphasis on some of the things we're focused on. 

I think the timing of CRA with this really helps 

put a -- kind of inject a shot of excitement. 

Like Marty, I didn't know -- I'm still 

grappling with the reality that we got this thing 

done and -- which is fantastic. I think it's 

really going to be a game changer and it opens up 
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a lot of opportunities. And especially with the 

growth in ideas, I think, like we're going to 

talk about later on today, there are a lot of 

good ideas on the table. And to marry that with 

some of the CRA opportunities is very exciting. 

So looking forward to the conversation.

CHAIRMAN GRUENBERG: Thank you, Mike. 

Let me mention before I turn it over 

to Liz Ortiz, of particular interest to this 

Committee, among the many things in the CRA rule, 

it will give explicit CRA credit for low-cost 

transaction accounts. And the credit will be not 

simply to a bank for offering low-cost 

transaction accounts consistent for example with 

the Bank On certified accounts, but also 

demonstrated consumer usage of the accounts, 

which will be an important accountability measure 

to evaluate not simply whether a bank is offering 

it on the website, but whether it's offering it 

in a way that the customers of the bank are 

actually able to utilize it. So we think it's 
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really an important step forward among a lot of 

other things as we are about to hear.

So let me turn it over to Liz Ortiz, 

our Deputy Director in our Division of Depositor 

and Consumer Protection for Community Affairs. I 

think I actually got that right.

MS. ORTIZ: Yes, perfect.

CHAIRMAN GRUENBERG: And, Liz, it's 

all yours.

MS. ORTIZ: All right. Thank you. 

Before I hand it over to Jonathan for the first 

panel I need to read a brief statement.

Today we expect to be joined by at 

least three members of the FDIC Board of 

Directors; perhaps not all three at the same 

time, but just in case, the Government in the 

Sunshine Act imposes notice and access 

requirements whenever a quorum of the FDIC's 

Board of Directors meets to conduct or determine 

agency business. This meeting is not held for 

such purposes and does not constitute a meeting 
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under the act. 

The Board members present will only 

engage in general or preliminary discussions that 

do not relate to specific proposals for action 

pending before the FDIC. Any specific issues for 

official Board resolution will remain open for 

full consideration by the Board following the 

conclusion of this meeting. If you have any 

questions, I or the general counsel will be glad 

to answer them.

And with that, I turn you over to 

Jonathan Miller.

MR. MILLER: Thank you. And I want 

to thank Liz for setting the Board meeting --

this coming meeting for this date. We were going 

to delay the rulemaking further, but we couldn't 

disappoint Liz.

(Laughter.)

MR. MILLER: So thank you, Liz, for

doing that.

So really this is coming home for me 
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in a certain way. This is a great committee and 

I played a role in nurturing it for a few years 

and handed it -- put it into good hands with Liz. 

So happy to be here. I'm particularly happy to 

be here to discuss the final CRA rule. I'll turn 

it over to my great colleagues to discuss the CRA 

rule. 

So I will just say briefly -- the bios 

are in your packets a little bit more fulsome, 

but Pam Freeman is a former chief for CRA and 

Fair Lending Compliance in our Exams Branch, and 

she really helped me run the team, the FDIC team, 

in developing the rule. Kris Rengert is a senior 

consumer researcher. He led our data analysis 

efforts, which were quite significant in this 

rule, and did a great job doing that. And then 

Jessica Thurman is currently a chief for CRA and 

Fair Lending in our Exams Branch and was a key 

contributor to the development and finalization 

of this rule. 

So with that, let's go to the next 
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slide, please. Well, we can go to the slide after 

this, the timeline is that it's now done. 

(Laughter.)

MR. MILLER: And actually before I 

leave, I should also say these three fine people 

are part of a larger amazing team we had here at 

the FDIC. And the FDIC team was one of three 

amazing teams including the staff of the OCC, 

that was just incredible, and the Federal Reserve 

Board as well, including one of Raphael Bostic's 

staffers on loan to the Federal Reserve Board and 

others. It was just a terrific group of people.

So let me start with the objectives of 

the rule. They sort of speak for themselves, but 

I'll say a few things about it. So first, the 

final rule encourages banks to expand access to 

credit investment and banking services in LMI 

communities. That is LMI communities both urban 

and rural. We do this for example, as the 

Chairman said, by expanding the geographic area 

in which we evaluate a bank's retail lending and 
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by expanding the geographies where community 

development activities are counted.

The second element, second key 

element, adapting to changes in the banking 

industry. Again, as the Chairman noted, the 

business of banking has changed remarkably since 

1995 when the internet was barely born. We now 

know from our unbanked survey that the majority 

of people interact with their banks either 

through mobile devices or online. Now the retail 

lending assessment areas and outside retail 

lending areas, we're going to follow where the -

- follow the banks in their expanded -- where 

they do business.

Third, we provide greater clarity and 

consistency in the application of CRA 

regulations. Again, as the Chairman said, we've 

developed much more rigorous benchmarks, 

performance thresholds, and the like. Those will 

be transparent to the bank, they will be 

transparent to the examiner, and they’ll be 
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transparent to the public. So each agency will 

see how the other agencies are operating, and we 

expect that will lead to considerably more 

consistency. 

And finally, the rule is not a onesize-fits-all rule. It's really tailored based 

on the bank size and the business model of the 

bank. That was important to us. So for example, 

there will be no new reporting requirements or 

data collection requirements for small or 

intermediate banks. That tailoring I think was 

an important goal for us going in and I think 

we've achieved that. 

So with that, I'm going to hand it 

over to Pam and we'll start getting into a little 

bit more of the details.

MS. FREEMAN: Thank you, Jonathan. It 

really is a pleasure for us to be here today and 

present to you this final rule.

So the next few slides illustrate the 

basic framework of the evaluation, both of the 
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current rule and the new rule. In the current 

rule we do evaluate institutions based on the 

size. So large bank exam procedures include the 

three separate tests. The lending test, which 

includes a retail lending segment and the 

community development lending. Then you have the 

investment test and the service test.

Intermediate small banks are 

evaluated under the small bank lending test and 

a community development test. And then small 

banks are evaluated under the small bank lending 

test and they can get optional consideration for 

investments and services.

And now the new evaluation framework. 

This chart summarizes that and it shows that all 

banks -- apart from those evaluated under the 

optional Strategic Plan. We continue to have 

different performance tests for the different 

size banks, but we also take into account the 

business models, as Jonathan mentioned. 

We retain the basic structure of the 
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current regulation with the three bank size 

categories, but we bumped up the thresholds at 

which a bank moves from one category to the next, 

and we retain the limited purpose designation 

which consolidates the former wholesale and 

limited purposed designations. And we have 

retained the strategic plan option.

So small banks, currently the 

threshold for small banks is less than 376 

million in total assets, and that changes with 

the new rule to less than 600 million. This will 

result in over 600 banks currently defined as 

intermediate small banks being redesignated as 

small.

Intermediate banks. Currently the 

threshold is 376 million to less than 1.503 

billion in assets. And we renamed the category 

intermediate banks and increase the range to 600 

million to less than 2 billion. This results in 

about 130 banks currently considered large being 

redesignated as intermediate.
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And currently institutions for large 

banks are at least 1.503 billion, and that's 

going to 2 billion.

So the most significant changes; let's 

start with those. That's for large banks. There 

are going to be four performance tests that 

they're subject to, and that's the retail lending 

test, the retail services and products test, the 

community development financing test, and the 

community development services test. Each test 

focuses on the activities that advance financial 

inclusion in low and moderate-income communities 

and to low and moderate-income individuals.

Intermediate banks are going to be 

evaluated under the new retail lending test and 

the community development test currently 

applicable to those institutions unless the bank 

opts to be evaluated under the community 

development financing test. 

And then small banks will continue to 

be evaluated under the existing small bank 
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performance standards unless the bank opts into 

the new retail lending test. 

And thenthen limited purpose banks 

will be evaluated under the community development 

financing test for limited purpose banks, and 

that's a modified version of the community 

development financing test.

And as I mentioned, banks will 

continue to have a strategic plan option subject 

to approval by the bank regulators. 

With that, I'm going to turn it over 

to Kris.

MR. RENGERT: Thank you, Pam. 

So assessment areas are the primary 

areas in which banks are assessed on their CRA 

performance. Under the existing regulation banks 

are evaluated and their assessment areas are 

delineated where they have a main office, 

branches, and deposit-taking ATMs. Our goal was 

to maintain a focus on evaluating banks where 

they have branches, but also to take into account 
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the growing use of mobile and online banking.

The final rule retains the requirement 

to designate assessment areas around main offices 

and branches, as well as deposit-taking remote 

service facilities, which includes ATMs. These 

are called facility-based assessment areas, or 

FBAAs. Large banks and limited purpose banks 

that would be considered large are required to 

delineate facility-based assessment areas 

consisting of one or more contiguous counties 

within an MSA or one or more contiguous counties 

within the non-metropolitan areas of a state.

For intermediate and small banks 

however the rule provides these banks with 

greater flexibility and allows them to delineate 

partial county FBAAs consistent with current 

practice and recognizing their smaller service 

areas. Also, like today, FBAA delineation must 

not reflect discrimination or arbitrary exclusion 

of LMI tracts. 

Next slide, please. The final rule 
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includes two provisions to evaluate retail 

lending outside of FBAAs. First, the final rule 

requires large banks to delineate retail lending 

assessment areas, or RLAAs, where a bank has 

concentrations of closed-end home mortgage and/or 

small business lending outside of its facilitybased assessment areas. 

A large bank delineates retail lending 

assess areas in geographic areas where it has 

originated at least 150 home mortgage loans, 

closed-end home mortgage loans, or at least 400 

small business loans for two consecutive years. 

These geographic areas include MSAs, or nonmetropolitan area of a state, excluding counties 

that are part of the bank's FBAAs. 

If a bank does more than 80 percent of 

its retail lending; and for this retail lending 

includes open and closed-end mortgage, 

multifamily, auto, small business, and small farm 

loans. If it does more than 80 percent of this 

lending inside of its FBAAs, it is exempt from 
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establishing RLAAs. This is one way of 

recognizing the importance of branches. 

Intermediate and small banks are not required to 

delineate retail lending assessment areas.

Second, the agencies evaluate the 

remaining lending outside of a large bank's FBAAs 

and RLAAs in an area described as the outside 

retail lending area, or ORLA. New acronyms. For 

intermediate banks and small banks that opt into 

the retail lending test lending in ORLAs is 

evaluated when more than 50 percent of their 

retail lending is outside of their facility-based 

assessment areas. Other intermediate banks and 

small banks that opt into the retail lending test 

have the option to be evaluated in their outside 

retail lending areas.

Additionally, as noted on this slide, 

the final rule clarifies the areas where a bank 

is evaluated on their community development 

performance. To provide greater certainly the 

agencies will consider all community development 
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qualifying activities regardless of location. 

This will create many CD, lending, investment, 

and service opportunities in rural areas and 

other underserved areas. CD loans, investments, 

and services conducted outside of facility-based 

assessment areas are considered at the state, 

multistate, MSA, and at the institution levels as 

applicable.

And with that, I'll hand it back to 

Pam.

MS. FREEMAN: All right. So I'll talk 

a little more about community development. So we 

feel like the final rule responds to stakeholder 

feedback about improving transparency and clarity 

regarding community development activities that 

are eligible for CRA credit. 

One key part of the final rule's 

highlight is the establishment of clearer 

standards for what constitutes community 

development activities that would build upon the 

current rule. This includes looking at the 
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majority standard which generally considers 

whether a majority of the beneficiaries, dollars, 

or housing units go to any one of the enumerated 

community development categories. In cases where 

there's less than a majority or it's hard to 

determine majority if a bank can still get full 

credit for activities that have the express bona 

fide intent of community development.

Banks will also get credit for 

activities associated with low-income housing tax 

credits or those that are conducted in 

conjunction with minority depository 

institutions, women depository institutions, 

low-income credit unions, and Treasury-certified 

CDFIs. Finally, similar to the current rule 

partial or pro rata consideration is provided for 

mixed-income rental housing that provides 

affordable units in conjunction with a government 

plan.

For additional clarity the agencies 

are going to maintain a publicly illustrative 
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list of qualified community development 

activities. In addition, the agencies are going 

to develop a process where banks can confirm the 

eligibility of a community development activity 

in advance. So these will really help add for 

certainty, consistency, and clarity.

So this slide demonstrates under the 

current regulation that community development 

activities fall into four categories. So that's 

affordable housing for low-income individuals, 

community services for low-income individuals, 

economic development by providing financing for 

small businesses or small farms, and activities 

that revitalize or stabilize low and moderateincome geographies, designated disasters areas, 

and distressed or underserved non-metropolitan 

middle-income geographies.

Now this slide provides the 11 

categories of community development activities. 

The new definitions clarify and expand on the 

current definitions and they also codify current 
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guidance. So I want to highlight a few of the 

provisions included in these definitions.

First, to provide clear standards the 

agencies retain the affordable housing in 

recognition of the importance of promoting 

affordable housing for low and moderate-income 

individuals. But this includes a new provision 

for defining naturally occurring affordable 

housing. It recognizes the importance to 

communities of multifamily rental housing that 

does not involve a government plan.

Second, the rule replaces the current 

revitalization and stabilization activities 

component of the current definition with six new 

place-based categories of community development. 

So four of the place-based categories focus on 

low and moderate-income areas in distressed or 

underserved non-metropolitan middle-income 

census tracts. 

One of the place-based definitions is 

for disaster preparedness and weather resiliency 
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covering activities to help individuals and 

communities prepare for and adapt to and 

withstand natural disasters, weather-related 

disasters, or weather-related risk. 

Another place-based definition is for 

activities in native land areas. This provision 

in this category -- the provisions in this 

category reflect the unique economic, credit, and 

financial service needs of Native and Tribal 

communities.

All of the place-based categories that 

specify eligible activities may not involuntarily 

displace or exclude low and moderate-income 

residents in the targeted census tracts. 

Third, the final rule includes a 

specific category for investments, loans, and 

other activities taken in cooperation with MDIs, 

WDIs, low-income credit unions, and CDFIs.

So the agencies established a set of 

impact and responsiveness factors that inform the 

qualitative review for the community development 
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financing and community development services 

test. These factors include but are not limited 

to the specific factors delineated in the 

regulation and presented on this slide. 

Some examples of these factors in the 

final rule are activities that serve persistent 

poverty counties or those that serve geographies 

with low levels of community development 

financing and activities that benefit or serve 

particular low-income individuals' families and 

households.

And with that, I'm going to turn it 

over to Jessica.

MS. THURMAN: Thanks, Pam.

So now that we've talked about the 

what and the where, we can talk about how we're 

going to evaluate banks under the new final rule.

So I'm going to go over -- in the next 

few slides we'll talk about the four performance 

tests that are in the final rule. The first test 

is the retail lending test. So the retail lending 
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test includes metrics, benchmarks, and 

performance thresholds. And the purpose of that 

is to make sure that we are providing 

transparency and predictability in the CRA 

evaluation. 

So the product lines that we are 

planning to evaluate under the retail lending 

test are closed-end home mortgage loans, small 

business loans, and small farm loans, and in 

cases where auto loans make up a majority of a 

bank's lending, we'll also look at auto lending. 

And of course any bank can opt into having their 

auto lending reviewed under the retail lending 

test.

Go to the next slide. 

MR. KELLY: Quick question. Majority. 

Does that mean over 50 percent --? 

MS. THURMAN: Yes.

MR. KELLY: -- of their lending?

MS. THURMAN: Yes. Originations. 

So if we kind of delve a little bit
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deeper into the retail lending test -- so the 

final rule establishes a set of retail lending 

metrics and benchmarks to evaluate a bank's 

lending to low and moderate-income individuals, 

small businesses and small farms, and in LMI 

census tracts. So the metrics apply both in the 

assessment areas that were described by Kris and 

then also in the outside retail lending area, or 

what we call ORLAs.

So we look at two different variations 

under the retail lending tests. The first thing 

we look at is the retail lending volume screen. 

And so this evaluates the bank's volume of retail 

lending in their assessment area and compares 

that to the deposit base in each of those areas. 

And then we take that metric and compare it to 

what other banks who operate in that facilitybased assessment area. We look at what other 

banks are doing in that assessment area to figure 

-- to determine the volume screen.

Separately we look at distribution 
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metrics. And I think that most people are very 

familiar about what the distribution metrics look 

like. They look very similar to what we do today 

in the current rule. 

So we look at both geographic 

distribution and borrower distribution. So for 

geographic distribution we look at what banks are 

doing in low and moderate-income census tracts 

for each of the product lines. And then for 

borrower profile, for that borrower distribution 

we look at how they're serving small businesses 

and how they're serving low and moderate-income 

borrowers. So I think it's important to note 

that the metrics approach is really tailored to 

local opportunities and economic conditions in 

each of the bank's assessment areas.

Go to the next slide. So as we start 

to think about what performance looks like in the 

retail lending tests -- so the final rule 

establishes lending distribution performance 

ranges for each of the rating categories from 
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outstanding down to substantial non-compliance. 

And the performance ranges are tailored to each 

geographic area, be it the FBAA, the RLAA, or the 

ORLA. I hope you all remember what each of those 

acronyms meant.

(Laughter.)

MS. THURMAN: And then we use 

thresholds to establish these performance ranges. 

And when we talk about thresholds, thresholds are 

based on a set of local data that we use such as 

community benchmarks and the market benchmarks. 

So community benchmarks are based on demographic 

data such as the percent of low-income families 

in a certain assessment area and market 

benchmarks are based on the aggregate performance 

of other reporting lenders in the assessment 

area. So that's what we talk about when we're 

looking at what we call thresholds.

And so really the goal of the retail 

lending test; and I think we have achieved this 

goal, is to provide banks with greater certainty 
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about what their CRA performance should look 

like. We tailor expectations into the unique 

conditions of the different market areas that the 

banks operate in and then we automatically adjust 

performance thresholds over time in a way that 

reflects changes in both business cycles and the 

economic conditions in those assessment areas.

So as a whole the test removes some of 

that uncertainty that we've had in the past 

regarding what an evaluation should look like. 

It adds a bit of rigor to the test as well and it 

brings the evaluation from behind -- what banks 

say were behind that curtain before. We bring it 

to the forefront. 

Go to the next slide. We'll talk 

about the second test, which is a bit near and 

dear to my heart -- is the retail services and 

products test. And so the purpose of this test 

was to really modernize the way we look at retail 

products and services in the current rule. We 

really want to add an explicit focus to the 
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potential for financial inclusion for LMI 

borrowers, small businesses, and small farms.

And so we add specific measures for 

both -- for the evaluation including availability 

and usage. So if you take a look a little bit 

closer at that chart, we incorporate some 

benchmarks into the test primarily for the retail 

banking services, but it does remain a primarily 

qualitative test. 

So the test has two prongs. It has 

retail banking services and retail banking 

products. So for all large banks we look at 

retail banking services, we look at branch 

availability and services, and we also look at 

remote service facility availability.

For large banks over 10 billion we 

also look at another aspect of retail banking 

services, which is digital delivery systems and 

other delivery systems. But I think it is 

important to note that if we have a bank -- what 

we consider digital banks or a bank that does not 
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operate branches, and they are under the 10 

billion and they're a large bank, we will also 

evaluate them for digital delivery systems and 

other delivery systems.

So the second prong is their retail 

banking products. And in that test for all large 

banks we look at responsive credit products and 

programs. And for example, those can be the 

special purpose credit programs. And then we 

also -- for those large banks over 10 billion we 

also look at the availability and usage of 

responsive deposit products. And a good example 

of that is our Bank On certified accounts. Any 

low-cost transaction account could be considered 

a responsive deposit product.

So we think it's very important to 

note that for the retail banking products --

those can only contribute positively to the 

retail services and products test conclusion. So 

we look at retail banking products and at an 

institution level. We look at digital delivery 
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systems and other delivery systems at the 

institution level, but for the retail banking 

services tied to branch availability and remote 

service facility we evaluate a bank at their 

assessment area level, their FBAAs.

Next slide. So the third test that we 

evaluate banks under will be the community 

development financing test. And for this test we 

use metrics and benchmarks to standardize the 

review of community development loans and 

investments, but this also remains a qualitative 

test as well. And we also use the impact and 

responsiveness factors that Pam talked about 

earlier to evaluate how responsive these 

activities are in the bank's assessment areas and 

broader. 

So we evaluate community development 

loans and investments in facility-based 

assessment areas, but then also in the broader 

level as applicable in the multistate MSAs, 

states, and at the institution level. So banks 
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can receive credit for qualifying activities 

anywhere in these areas. And I think most 

importantly banks can receive consideration at 

the institution level for any community 

activities that they do.

So for the various metrics we combine 

community development loans and investments 

together and then we measure that dollar volume 

against the volume relative to deposits. And I 

think it's an important aspect to note that now 

that we combine community development loans and 

investments that this allows banks to engage in 

activities that really speak to their expertise 

and that is -- what is most needed for financing 

that project. So banks no longer have to think 

about should it be a loan or investment because 

of the separation in the test. We bring it 

together which allows them to make a -- to 

determine what works best for them and also what 

works best that project.

And so in addition we also not only 
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look at originations, purchases, and increases, 

but we also look at prior activities that remain 

on the bank's balance sheet. And so we do this 

in order to emphasize the importance of long-term 

capital in these community development financing 

activities.

So last but maybe not least is the

community development services test. And so the 

community development services test evaluates the 

extent to which a large bank is providing 

community development services in their FBAAs and 

then also in their multistate MSAs, and also at 

the institution level. 

Community development services test 

is a pretty much qualitative test. We're not 

asking for a lot of data collection. We really 

just ask the bank to provide us any relevant 

information that they can to demonstrate how 

they're serving their community through community 

development services. And this could be through 

total number of hours or number of services 
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performed during the relevant time period. We 

also evaluate the impact and responsiveness of 

these services as well.

I'm going to pass it onto Kris now to 

talk about ratings.

MR. RENGERT: All right. Thank you, 

Jessica.

So the next several slides are going 

to -- we're going to talk about ratings. The 

final rule provides greater transparency and 

consistency on assigning ratings for a bank's 

overall performance with ratings grounded in the 

bank's performance in its local communities.

Under the methodology in the final 

rule each performance test results in a 

performance score and a conclusion. So each 

conclusion would have a score associated with it; 

for instance, a high sat would be a 7; outstanding 

would be a 10, and at the state, multistate MSA, 

and institution level. These performance scores 

are then combined using a weighted average 
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approach with the value resulting from this 

calculation translated into the rating for the 

respective state, multistate MSA, or institution.

With respect to conclusions the 

agencies maintain the current five categories of 

outstanding, high satisfactory, low 

satisfactory, needs to improve, and substantial 

non-compliance. For ratings the agencies assign 

one of the statutory ratings of outstanding, 

satisfactory, needs to improve, or substantial 

non-compliance.

Next slide, please. So for large 

banks the agencies determine a bank's state, 

multistate MSA, and institution rating by 

combining the bank's performance scores across 

all four performance tests. The agencies 

maintain the emphasis on retail lending and 

community development financing by giving these 

tests the heaviest weights. The final rule 

provides a weight of 40 percent each for the 

retail lending test and the community development 
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financing test, while the retail services and 

products test and the community development 

services test performance scores account for 10 

percent each.

In addition to the weighting approach 

the rule requires that as applicable for each 

state and multistate MSA, and at the institution 

level the retail lending test conclusion for a 

large and intermediate bank needs to be at least 

low satisfactory in order for the bank's overall 

rating to be satisfactory or higher.

Next slide, please. So just a few 

things on this -- for intermediate banks the 

agencies weight both the retail lending test and 

the applicable community development test at 50 

percent each consistent with current 

requirements. However, as I mentioned, an 

intermediate bank needs to receive at least a low 

satisfactory on the retail lending test in order 

to receive an overall satisfactory at the 

corresponding state, multistate MSA, or 
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institution level. The agencies are not applying 

the current requirement that an intermediate bank 

must receive a satisfactory rating in the 

intermediate bank community development 

evaluation.

Small banks are evaluated using the 

status quo small bank lending test so their 

rating continues to be based on lending test 

performance. Small banks have the option to 

submit retail services and community development 

investments and services for consideration to 

elevate a satisfactory rating to an outstanding 

rating, however they could receive an outstanding 

rating based solely on their retail lending 

performance.

Next slide. Now near and dear to my 

heart, we turn to data collection and reporting, 

which is covered in the next two slides. 

The agencies recognize the importance 

of using existing data sources where possible and 

of tailoring data requirements. Under the final 
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rule small and intermediate banks do not have any 

new data requirements for the required 

performance tests. 

For large banks with assets over 10 

billion the agencies establish new reporting 

requirements for deposits data which include the 

volume of deposit is in the bank aggregated at 

the county level based on the location of the 

depositor. These data will be used in 

calculations in the retail lending and community 

development financing tests and as part of the 

weighting calculation for aggregating 

performance scores.

The FDIC's summary of deposits data 

which distributes a bank's deposits across its 

branches, as opposed to counties, will be used 

for banks with assets of $10 billion or less, 

although individual banks may choose to 

voluntarily collect, maintain, and report their 

deposits data based on depositor location. Large 

banks and limited purpose banks that meet the 
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asset size threshold for large banks are required 

to report the delineation of FBAAs and RLAAs, if 

applicable. 

Next slide, please. For retail 

lending the final rule mostly relies on similar 

retail lending data to what is used today. Two 

notable additions to data requirements are for 

small business and small farm loans large banks 

will add flags for loans to businesses and farms 

with gross annual revenues of $250,000 or less 

and with gross annual revenues between $250,000 

and 1 million to the small business and small 

farm loan data they collect and report today.

Large banks for which automobile loans 

constitute the majority of their retail lending 

originations or which opt to have their 

automobile lending evaluated under the retail 

lending test are required to collect and maintain 

data on their automobile loans including income 

level and census tract for each loan. We expect 

this requirement to impact very few large banks.
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The final rule requires all large 

banks and similarly sized limited purpose banks 

to collect, maintain, and report community 

development financing data. The community 

development financing data is necessary to 

construct community development financing 

metrics and benchmarks used to consistently 

evaluate the dollar amount of a bank's community 

development lending and investments. 

The agencies also require that large 

banks collect and maintain community development 

services data in a prescribed format or a format 

of their own choosing. Regarding retail services 

and products, large banks are required to collect 

and maintain data to support the final rule's 

branch analysis and remote service facilities 

analysis, again in a prescribed format. 

In addition, large banks with assets 

over $10 billion and other large banks that do 

not maintain branches have new data requirements 

for digital and other delivery systems. This 
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facilitates a review of the largest banks and 

digital bank's performance regarding their 

digital and other delivery systems. Also large 

banks with assets over $10 billion are required 

to collect and maintain data on deposit products 

like low-cost bank accounts that are responsive 

to the needs of low and moderate-income 

individuals and communities. 

While not required large banks that 

are at or below the $10 billion threshold need to 

collect and maintain the corresponding data if 

they want the agencies to consider their digital 

and other delivery systems or responsive deposit 

products.

Hand it back to Pam.

MS. FREEMAN: All right. Thank you.

So when is all of this effective and 

applicable? You're probably wondering. So 

although the date -- the effective date of the 

final rule is April 1st, 2024, the applicability 

date for the majority of the provisions is 
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January 1st, 2026. So that includes the new 

definitions, the new tests, the data collection 

and maintenance requirements, and the appendices 

that explain all the tests. So that's January 

1st, 2026. 

The reporting of the data will be 

effective in '27. Usually the reporting date is 

April 1st. So generally we're thinking banks 

will start being examined under this in 2028, but 

that's general. 

And just a few nuances of 

applicability. We've already had questions about 

strategic plans and we've said in the rule that 

strategic plans that are effective as of January 

1st, 2026 will remain effective until their 

expiration date. 

And then as far as limited purpose 

banks we've been asked am I going to have to ask 

for redesignation? And the answer is no. Those 

banks that are considered wholesale or limited 

purpose now will remain limited purpose, but as 
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we do today we will continue to evaluate the 

effective -- are they still -- is that 

designation still applicable, especially under 

the revised definition that will be effective 

January 1st, 2026.

And with that I'd like to thank you 

for your time and attention and open it up for 

questions. 

Or you just comprehended everything we 

said?

(Laughter.)

MS. FREEMAN: I'm sure. I'm sure you 

have no questions.

MR. KELLY: Pam, it was well-stated. 

I do have a question. I ask about the 50 percent 

rule on auto lending. Can someone help me with 

a little bit of a history there, the number of 

banks that might even fall into that category and

would that be considered a risk being in that 

space?

MS. FREEMAN: So it's hard for us to 
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know exactly how many will be subject to that 

because it's based on the number of originations 

and we don't have that data readily available. 

All we have is the call report data to look at 

now, which is just outstanding balances. It's 

not originations. But we don't expect it to be 

a large number of institutions.

MR. KELLY: That's what I was 

thinking.

MS. FREEMAN: And does anyone have 

anything to add to that?

MR. MILLER: Any bank can opt in to 

get the auto lending evaluated as well.

MR. KELLY: Okay. Thank you.

MR. MINTZ: I have two questions. 

First, how relieved are you all that --

(Laughter.)

MS. FREEMAN: Super relieved.

MR. MINTZ: Congratulations and thank 

you for all of this incredible work. 

I'll limit myself really to one 
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serious question, which is when you talk about 

the data that banks can assemble and present to 

examiners about their responsiveness to your new 

and incredibly wonderful retail services product 

test, what kind of data are you all anticipating 

and what guidance might you give us? And 

parenthetically, is the kind of data that you may 

be familiar with that's being collected by the 

Federal Reserve and their Bank On national data 

hub in the ballpark? And if so, in what ways?

MS. FREEMAN: Right. So we do hope 

that that data will help banks provide the data 

that we've requested. And we've specifically 

prescribed that it would be the number of 

responsive deposit accounts that are both opened 

and closed during a certain year in the 

evaluation period by low, moderate, middle, and 

upper-income geographies. So we're interested to 

know where they're opened and closed 

specifically, but in the aggregate.

MR. MINTZ: So I have a follow-up.
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MS. FREEMAN: Absolutely.

MR. MINTZ: That's what we do up here. 

We lie. One of the things that we have been 

talking about with our partners when you look at 

the rate of accounts that are closed is that some 

of those accounts are closed involuntarily --

very few -- some of those accounts are closed 

because somebody exits the banking system, and 

some of those accounts are closed because the 

customer moves into a different product at the 

same institution. Is that kind of nuance 

something that you think examiners would take 

into account?

MS. FREEMAN: Absolutely. So we have 

another provision that -- optionally a bank can 

collect and maintain and give us any information 

that shows availability and usage of these 

accounts, but if a bank was able to show that, 

well, they were originally in this account and we 

were able to move them into these other accounts, 

that's very valuable data. So really we have a 
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couple pieces of prescribed data, but then it's 

whatever the bank can give us to show 

availability and usage. Thank you.

MS. CAMPER: Can I ask a follow-up 

question on the responsive products? So I'm 

looking at slide 15 that Jessica went through and 

it appears that only large banks with assets over 

$10 billion can get credit for responsive deposit 

products. Or is that not the case? Because the 

column just above it says responsive credit 

products, not deposit products for banks over 2 

billion.

MS. THURMAN: Yes, so we evaluate 

banks with assets over $10 billion. We also 

evaluate them for responsive deposit products. 

Any bank can opt into the retail services and 

products test and be evaluated under any of the 

factors in the retail services and products test.

MS. FREEMAN: So it's a required 

evaluation for those -- 

MS. CAMPER: I see.
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MS. FREEMAN: -- over 10, those large 

banks 2 to 10 can absolutely give us data to 

consider. And then even smaller banks can ask 

for additional consideration.

MS. CAMPER: Okay. And the reason 

that I ask is part of what we're doing is 

encouraging banks of all sizes to offer 

responsive --

MS. FREEMAN: Absolutely. Yes.

MS. CAMPER: -- deposit products and 

one question they have is CRA credit available? 

MS. FREEMAN: Yes.

MS. THURMAN: Yes.

MS. CAMPER: So I just want to make 

sure we have accurate --

MS. FREEMAN: For any bank it's 

available, yes.

MS. CAMPER: Thank you.

MS. FREEMAN: Thank you.

MS. McHALE: I'd like to ask two 

questions. One is a clarifying one around 
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community development activities. I just want to 

-- I may have heard this wrong. Community 

development activities that occur outside of the 

facility-based assessment area: financing 

activities, disaster, resiliency, supportive 

CDFIs, MDIs, those will count? 

MS. FREEMAN: All community 

development activities will receive 

consideration.

MS. McHALE: Okay.

MS. FREEMAN: It's just where will it 

receive consideration?

MS. McHALE: Yes.

MS. FREEMAN: Will it be at the 

assessment area levels, state level, at the 

institution level. 

MS. McHALE: I think I just want to 

highlight and say how incredibly important that 

is, because in a moment where there is so much 

volatility and uncertainly -- but also we're at 

a time where we need so much innovation in the 
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community development field that to be able to 

invest in things, to test, to learn, and then to 

help replicate and scale in other places is 

fantastic.

The other clarifying question was the 

list. It's like the golden list. When would 

that be available? I'm sorry that I'm -- 

MS. FREEMAN: Oh, the illustrative 

list? Yes.

(Laughter.)

MS. McHALE: The illustrative list. 

Thank you. When do you think that would be --

will be available?

MS. FREEMAN: Definitely by January 

1st, 2026.

MS. McHALE: Okay. 

MS. FREEMAN: No later than.

MS. McHALE: Okay. So the reason why 

I'm so interested in the illustrative list it's 

just I -- this may not be something we can --

something I think we all have to think about, 
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which is it's the -- now we have the what and 

it's the how do we begin to prepare, how do we 

shift the how, how do we work? And it's on both 

sides. It's a real shift both on the examination 

side, on the institution side. 

And so I would just put out that one 

thing that we -- and certainly our trade 

associations I think are already ahead of us on 

this, but really doing some deep dives to really 

begin to understand the details, because while it 

may seem to those that are practitioners, not in 

a financial institution, that some of those dates 

are very far off. It actually will be here before 

we know it.

MS. FREEMAN: Right. We do realize 

that.

MS. McHALE: Yes. So I just -- if 

there are opportunities for collective learning, 

to do deep dives into these areas that would be 

really welcome.

MS. FREEMAN: So would you find that 
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list helpful prior to January 1st, 2026?

CHAIRMAN GRUENBERG: Careful now.

(Laughter.)

MS. FREEMAN: I know. I'm putting it 

on myself.

MS. McHALE: I personally would. I 

personally would. And then just one other small 

clarifying question. It sounds -- maybe again I 

heard this the wrong way -- under the community 

development currently, under the community 

development investment test it's -- there are --

investment activities also include financial 

institutions' charitable activities. And while 

it's a very small percentage, again a very 

important way to drive innovation. Does that 

move over now to the services test?

MS. FREEMAN: No. So donations and 

grants are still an investment.

MS. McHALE: Okay.

MS. FREEMAN: But we realize it's the 

-- typically they're smaller dollar and they're 
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not compared to a large investment. They may not 

-- so we did add an impact and responsiveness 

review factor for them.

MS. McHALE: Great. 

MS. FREEMAN: So actual monetary 

donations are still investments.

MS. McHALE: Thank you.

MS. FREEMAN: Yes, thank you.

MR. ANTONAKES: Good morning. So 

first and foremost I'd like to congratulate the 

panel and all the agencies for the outstanding 

work here. Having started my career as a CRA 

examiner, I take a personal degree of 

satisfaction with this work. Also as I joked 

with others last night, having been battered and 

bruised during interagency deliberations through 

the years, no small task to finalize a rule of 

this length and complexity. So really 

congratulates all around.

Really pleased to see more explicit 

call-out of fair lending activities, racial 
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equity activities, also alignment with the CFPB's 

1071 definitions. I think that will be 

exceptionally helpful throughout.

I have one question on the asset 

threshold designations, and as was welldiscussed, tailoring in terms of data collection 

requirements within that space. And this may 

well be within the 1,500 pages. I haven't 

committed it yet to memory, but I'm working on 

it. 

Could you discuss a little bit 

examiner intention around tailoring within that 

swath of $2 billion to $2 trillion institutions 

in terms of exam scope or perhaps exam frequency? 

And as a larger bank on the smaller 

end we're subject to continuous supervision for 

risk management. Do you envision a process where 

the largest banks would ever be subjected to 

continuous supervision on the CRA fair lending, 

just because I can't imagine how long it would 

take to conduct an institution exam of that 
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scope?

MR. MILLER: So it's probably early 

for us to speculate on sort of that -- the answer 

to that question, I mean I will say in response 

to you, Steve and Brandee, your question. So we 

adopted the -- the Board met on Tuesday at 4:00 

to -- a week ago Tuesday at 4:00. I will say 

there were some activities of the members -- by 

the members of the team that evening. And then 

on Thursday when our heads cleared a little bit, 

we got together and started to talk about -- on

just and FDIC basis started talking about --

MR. ANTONAKES: It's nice that you 

gave them a 10-hour break.

MR. MILLER: I know.

(Laughter.)

MR. MILLER: -- implementation. I 

mean, because there is -- and on the list -- and 

we actually have really helpful resources. We 

have a division that we call Corporate 

University, which is really skilled in developing 
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training and outreach materials, both externally 

and to our own examiners. And we have a mountain 

to climb with regards to training our examiners 

as well. And there are going to be multiple work 

streams going on and on an interagency basis. 

Because consistency was such a driving force in 

the rulemaking, we want to make sure that there's 

consistent implementation.

So I will say we're on it. I mean, 

it's very clear in our minds that we need to do 

outreach to the industry, that we need to do 

outreach to the non-profit and consumer community 

and civil rights groups, and to our own examiners 

just to make them -- and I think in fact this 

presentation will be -- is a good start, is like 

our first start at this, and we'll build on it. 

And then we'll sort of go progressively from 

making people aware of the framework like we have 

tried to do here and to digging in deeper and to 

understanding -- to set up a process for how we're 

going to take the applications for the -- pre-
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approval applications from banks and so forth. 

So we have it all squarely ahead of us 

and we have actually started to -- and I give 

again my team enormous credit. And so we'll --

maybe we'll come back in a year or two and let 

you know -- and we'll have all your answers.

MR. ANTONAKES: Very fair, Jonathan. 

Thank you.

MS. RODRIGUEZ: Thank you. I just 

also want to echo congratulations. We really 

appreciate the engagement of the FDIC and all of 

the regulating agencies on your partnership and 

engagement in forming this final regulation.

Just to follow up a little bit, 

Jonathan, on what you were saying, as you look 

forward to these dates of implementation and 

examination how would you -- what roles and how 

would you expect community development 

organizations such as NeighborWorks 

organizations to lean in and help with the 

implementation? What roles would you like to 
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play to help get this understanding and deepseated into the community?

MR. MILLER: So it's a great question. 

And I have a little bit of the same answer that 

I just gave to Steve.

PARTICIPANT: (Off microphone.)

MS. ORTIZ: What's the answer?

(Laughter.)

MR. ANTONAKES: They already know. 

They've reviewed the 1,500-page reg.

MR. MILLER: All right. So a number 

of people have already approached us about having 

the opportunity to explain a little bit about 

what they do, to our examiners, for example, to 

help them understand better, what to be looking 

for and so forth. And I think we will -- those 

are valuable offers and we'll sort of keep it in 

mind as we put together our work plan for training 

for our examiners and outreach and all the rest 

of it. 

MS. RODRIGUEZ: No, please do, because 
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we're allies. We want this to be successful. 

We're very invested in the outcome here.

MR. MILLER: And I would just say 

throughout the rule -- I mean the more groups 

like NHS, NeighborWorks groups and other groups 

can work with banks and come to us with ideas, 

the more effective that kind of application is 

likely to be.

MS. RODRIGUEZ: That's helpful. Thank 

you.

MR. HSU: Maybe just to reiterate, 

like at the OCC we're going through a very similar 

-- you almost described exactly what happened 

(laughter), a similar 10-year -- or 10-hour grace 

period. And then immediately just thinking 

towards implementation. And I just got briefed 

on this yesterday. Pretty aggressive plan in 

terms of -- because there are lots of pieces to 

keep track of. And at the OCC the range of 

institutions that we have to do CRA for is quite 

wide, right, I think, Steven, to your point.
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So highly encouraging. Just reach out 

early and often. I think this is the time to 

start engaging with us to say hey, here's how 

we're thinking about things, because that 

feedback becomes really, really important as we 

are putting this together in terms of like now 

moving towards implementation for which -- and it 

provides a lot of energy, too. I wouldn't 

underestimate that part of it saying hey, there's 

real interest in kind of getting in there and 

getting this done, because I think that's why we 

do this. And it is energizing to folks to feel 

that.

MS. BILONICK: Hi. Sorry. This is 

an awkward microphone, or maybe I shouldn't -- I 

don't know which one is my mic. So I don't know 

if this is on. Can you hear me? I'll just hold 

it.

So I had two questions. One, you 

mentioned the racial equity lens in the 1071 

definitions. My understanding was that there is 
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not a race or ethnicity lens to these 

assessments. Is that correct? It's an income 

and geography lens apart from Native communities?

MR. MILLER: For the assessments, 

that's right. But we do have a provision which 

we think is important and will have a lot of

impact. We do have a provision which requires 

the agencies to publish on an assessment-area 

basis, the HMDA data related to race, income, 

ethnicity, applications and approvals by 

assessment area, by income, by race, ethnicity, 

and the other factors. So that will be publicly 

available for all assessment areas for all large 

banks.

MS. BILONICK: And would that 

eventually include 1071 data assuming that it is 

enacted and collected?

MS. FREEMAN: That is not in the rule 

at this point.

MS. BILONICK: Okay.

MS. FREEMAN: Okay. Yes, we really 
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can't do that at this point because of the --

it's not effective. And we don't know what the 

CFPB is going to do, publicly, so we didn't want 

to say.

MS. BILONICK: Totally makes sense. 

My second question was I like that you flagged 

the zero to 250K and 250K to a million for small 

businesses. And I was wondering if there were 

target percentages that you were looking for in 

either of those categories and/or if either were 

weighted, like if the zero to 250K had a heavier 

weight than 250 to a million? 

MS. FREEMAN: Our weighting is --

MR. RENGERT: They are not given any 

overall differential weight, but the weighting -

- so the distribution analysis would look at a 

bank's loans to the lower end of the zero to 250 

distinctly and compare it to community benchmarks 

and market benchmarks, and then separately look 

at loans to small businesses or small farms, 250 

to a million, and look at community and market 
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benchmarks.

The weighting that might then happen 

then is when rolling up the results of those 

distinct distribution tests and that would be 

driven by the demographics of the area in which 

we -- in which the --

MS. BILONICK: And could those be 

achieved through investments into CDFIs or 

community lenders or is it strictly what's being 

done directly by the banks?

MR. RENGERT: It's strictly their 

retail lending, the retail lending test. 

MS. BILONICK: And I just wanted to 

say also I worked with small businesses my whole 

career until my current role and those thresholds 

are absolutely right. I know like every business 

that we worked with was certainly under a million 

and mostly under 250K. So those were -- whoever 

came up with that, bravo.

MR. MILLER: Can I -- just one other 

thing related to the first question you asked 
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Marla? So we do -- we asked a question in the 

NPR and got pretty universal support for the idea 

of including special purchase credit programs, 

SPCPs, a credit given -- banks credit for them in 

the retail services and products test. And 

special purpose credit programs are part of the 

fair lending laws, ECOA the Equal Credit 

Opportunity Act, which allows special 

consideration for loans to certain groups that 

have been previously disadvantaged and those --

so those will get credit and without regard to 

income.

MS. CAMPER: Hi. I want to follow up 

on Steve's question about implementation and 

threshold, so I'm glad that the small business 

thresholds feel right. I would say that our 

member banks, the $2 billion banks don't see 

themselves in the same cohort as the $2 trillion 

banks. So I think there was some awareness and 

concern that large banks, again, I don't think a 

$2 billion bank necessarily self-identifies as a 
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large bank in the same way. 

So Steve had asked, I think, in terms 

of implementation, is there I think an awareness 

or will there be an awareness among examiners 

about those are really different in kind or was 

that something that you thought through when you 

created those thresholds, especially where a lot 

of other regulations thresholds might be $10 

billion or $50 billion or now in some areas $100 

billion?

MR. MILLER: So I guess I would say 

we're looking at it from the other side of the 

telescope or whatever the right analogy is. We 

raised -- so today, a large bank is $1.5 billion 

and above. As a result of this rule, it will now 

be $2 billion and above and some 600, I think was 

the number, 600 and something banks that are 

currently considered to be large will be 

considered intermediate. 

And I will say, you know, we get 

comment letters from the range of stakeholders, 
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and we heard -- we had comments raising concerns 

about communities where you had banks that were 

previously large banks and were subject to the 

investment and CD investment tests and a more 

rigorous CD test thanthan intermediate banks 

that, you know, those banks will no longer be 

measured in the same way for community 

development.

So rule writing is balancing of 

interests -- so, now we did add, there are at $10 

billion there are additional data requirements 

and retail -- for both retail and deposit and 

retail services and products in terms of accounts 

and so forth. So we do think we calibrate and 

tailor that somewhat. I think what -- how then 

to get to the other part of the question we 

haven't -- we'll get to the examiner training. 

We understand that concern, but for the basic 

business that the banks are doing, the retail --

the tests are achievable.

MS. CAMPER: Okay, great. And then 
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just one more and that was not a -- just really 

to get an understanding of how you were thinking 

about that.

MR. MILLER: Yes.

MS. CAMPER: And then on the 

implementation and the speed of training, I would 

say there is already a lot of energy. We have a 

webinar schedule tomorrow and we have -- I don't 

know if I can say the number, several thousand 

people already signed up to -- yes, it's very 

scary because I'm on it and there will be lots of 

people looking. 

But the level of interest and anxiety 

about getting a jump on 2026 does feel sort of 

around the corner, especially where you have that 

'24 number poked in there. So the sooner the 

details come out, I think banks are really eager 

to get a jump on implementation. So thank you 

for that. Thanks.

MR. CALHOUN: First of all, 

congratulations, and thank you for all the hard 
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work on this. I mean it's a remarkable 

accomplishment.

So a detailed question and then a 

broader one, a follow up on the question about 

the list of illustrative presumed compliant 

activities. I think that is a hugely important 

part of the rule, often overlooked, although much 

discussion of this in all of this here, but in 

some ways, it can be as impactful or more than a 

lot of what was up here. 

Many of us were very deeply concerned 

about that list in the prior CRA rule that was 

withdrawn. That list covered, I think, three 

full pages of fine print in the federal register 

and was accompanied by wildly loose definitions 

like benefitting LMI communities could mean 

predominantly or partially. And predominantly 

was above 50 percent. Partially was anything 

below 50 percent, so I think that goes down to 

like .1 percent.

And so I think that is a huge part of 
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the rule yet, quite frankly, to be written and 

will drive a lot of activity. We fully support 

the greater certainty on the rule.

So my question is first is mainly 

about process. What will be the process for 

developing and updating that list and it will be 

-- will there be opportunities for nonprofit 

organizations such as the number of the ones up 

here to comment and have input on that. So that's 

that one. 

And then the other one is a shorter 

question, but just the big picture, in addition 

to more certainty, I think the goal was to have 

greater quality and quantity of CRA lending and 

just how do you see the rule advancing that goal?

MS. FREEMAN: So as regarding the 

process for the list, obviously we haven't worked 

out the details yet, but that's an ever-evolving 

list. So it's not like we're going to come out 

with a list whatever date in the next couple of 

years and then that's it. It will constantly be 
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evolving and we will constantly be adding and 

sometimes taking activities off. And we've even 

addressed that in the preamble, if we took 

something by some chance, it would still -- still 

be effective --

MR. CALHOUN: Retroactive.

MS. FREEMAN: Yes, right. So it will 

be evolving. I do think input and as we get 

requests for pre-approval of an activity, that 

yes, this does qualify, we would consider adding 

that to the list. It depends. We don't want to 

add something so specific that it would not lend 

itself to any other bank. But as far as like the 

examples you give, you gave, regarding the OCC's 

past list, so we have a majority standard in this 

rule. So I think we'll be able to incorporate 

that. It won't be -- it will be long. It will 

be long to be useful, it will be long. But 

hopefully, we'll organize it in a way that will 

be very useful to the banks and the public.

MR. CALHOUN: So I'll let it go, but 
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we have concerns that a prior challenge with the 

CRA rule and there are numerous reports that 

showed this that a lot of displacing, gentrifying 

activities were given CRA credit. And we were 

very concerned that the prior illustrative list 

double downed on that and so that's an example of 

a place where it can override all of this very 

positive language in places in the rule itself if 

the illustrative list is sort of a per se safe 

harbor.

MS. FREEMAN: So we -- that's why we 

incorporated, that low and moderate income 

residents could not be involuntarily displaced. 

That was very important.

MR. CALHOUN: And then the big picture 

part?

MR. MILLER: I would recommend you 

read the chairman's statement at the adoption of 

the rule. I mean we expand the areas in which a 

bank is evaluated. I think that's going to be 

really, really important. We're expanding the 
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areas in which banks can get credit for community 

development. I think that's going to be really 

important, especially for addressing some of the 

problems with credit deserts. And we have 

benchmarks and performance standards that are 

much more rigorous and I think will result in 

banks working to achieve more -- higher grades or 

at least doing more to achieve the grades they 

want.

MS. LIBBY: Okay. So I will echo the 

congratulations that others have said or shared. 

And I think building on this discussion I'm 

curious. I know there were a lot of groups that 

were interested in seeing how race and ethnicity 

might be included and so knowing that it isn't 

being sort of factored in on an individual level, 

I am just curious if you see it having a role in 

sort of how assessment areas are being defined 

and if it had something to do with the way that 

you're looking at those on a more granular basis. 

I'm just curious how and whether that might play 
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there to satisfy some of those questions and 

concerns.

MS. FREEMAN: So we kept in the rule 

that assessment areas that cannot arbitrarily 

discriminate, cannot arbitrarily, you know, 

redline. So we kept that in the rule and we feel 

like that's still critical. But our fair lending 

program here at the FDIC, as well as the other 

agencies, is very rigorous. Thank you, Jessica.

So even though they're separate 

regulations, they still are married in some way, 

so we will take into account discriminatory 

lending practices in our exams. We have and we 

will continue to do so.

MR. MILLER: Do you want to talk about 

assessment areas, too, the full counties?

MS. FREEMAN: Yes, for large banks, 

we're incorporating the requirement that they 

have full counties and we do think that will help 

so that they can't carve out certain areas. So 

that was our reasoning there. We still think 
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some smaller banks could possibly because they 

might not be able to serve an entire large county. 

But large banks, we feel like a full county is 

reasonable.

MS. LIBBY: Thank you. 

MS. RODRIGUEZ: I have sort of a weedy 

question so if there's time. On page 13, under 

the retail lending test and the volume screen, 

the outline that a bank's volume will be 

evaluated and compared to other banks with 

branches in that assessment area.

I guess my question is will be like 

for like? Or will it be any bank in that 

assessment area regardless of size or -- yes, I 

guess that's my question.

MR. RENGERT: So it's an aggregate. 

The comparison is all banks that have reported 

lending, relevant reported lending that have a 

branch in that area. So it's the direction --

the answer to your question, it's not like for 

like. It's reporting lenders with a branch in 
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that assessment area.

MS. RODRIGUEZ: Because we will find 

that smaller banks can be a little bit more nimble 

and provide some more targeted practices. So 

that could be very beneficial in that regard.

MR. MILLER: Any other questions? So 

when you're finished with the rule, feel free to 

ask more questions.

(Laughter.)

Thank you very much. We enjoyed the 

opportunity. Thank you.

(Applause.)

MS. ORTIZ: I think that's the first 

time I've ever heard applause for a panel at the 

ComE-IN. Jonathan packed the room with several 

of his friends.

Another first for ComE-IN is I think 

we're actually running ahead of schedule, but I 

think we'll still come back at 10:45 as we had 

planned. Okay, great. So I'll see you all at 

10:45. Thank you.
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(Whereupon, the above-entitled matter 

went off the record at 10:24 a.m. and resumed at 

10:47 a.m.)

MS. ORTIZ: Welcome back, everyone. 

You know, I think this next panel is perfectly 

positioned to pick up where the last one left off 

where we were talking about the importance of 

outreach to not only financial institutions but 

to community-based organizations and have their 

input as we think about the opportunity to 

implement the new CRA rule. I feel like I should 

just say you're speaking my language as the 

Deputy Director for Consumer and Community 

Affairs. And so this next panel is really going 

to talk about where we are headed with the next 

iteration of our economic inclusion strategic 

plan and I think you'll see a lot of really 

helpful connections with your work and with the 

panel that just preceded us.

And with that, I'll turn it over to 

Montrice.
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MS. YAKIMOV: Thanks, Liz. Good 

morning, Chairman Gruenberg, and esteemed members 

of our Committee on Economic Inclusion. I am 

really happy to introduce this next panel which 

will share information gained through a robust 

process the FDIC is following to update our 

economic inclusion strategic plan. And I'll 

sometimes refer to that as just plan for sake of 

brevity.

Because the plan covers a multi-year 

period and establishes a flexible blueprint for

our work in community affairs programs, the 2024 

plan is a critical document and it continues a 

long standing FDIC practice in place for many 

years to issue economic inclusion strategic plans 

to guide our work. This practice actually began 

in 2006 with ComE-IN, developed a plan to 

organize and guide its work. The FDIC 

subsequently issued two multi-year plans in 2014 

and again in 2019 and both proved really valuable 

in focusing our programs to expand access to 
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financial products and services for mainstream

institutions. We've been focused on expanding 

access to transaction and savings accounts, small 

dollar loans and consumer credit, responsible and 

sustainable mortgage loans, and small business 

loans.

The FDIC has also leveraged our 

economic inclusion strategic plan to focus our 

efforts on promoting financial education as a 

means to expand financial empowerment and 

economic inclusion. 

I kind of need a booster seat here. 

These chairs aren't built for short people.

(Laughter.)

So to update our current 2019 plan, 

the FDIC engaged Abt Associates to complete a 

comprehensive data review that we refer to as an 

environmental scan. Data gathered included 

information such as current challenges to 

economic inclusion and approaches that appear to 

hold promise for advancing economic inclusion. 
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Our consulting team interviewed 

internal and external stakeholders, with 

structured research questions. They conducted 

nearly 30 interviews and listening sessions, 

including about 60 internal and external 

stakeholders and that included every member of 

the ComE-IN and we sincerely want to thank you 

all for the input and engagement on your parts.

Our consultants also completed a 

robust literature review which included more than 

80 sources. These efforts were vital because we 

really want our updated economic inclusion 

strategic plan to be rooted in data and research 

including insights gained related to broad 

changes impacting the financial services 

industry, particularly those changes that have 

been in effect since our 2019 plan was issued. 

So today our panel will walk you 

through the research they completed and they'll 

also describe how the FDIC is thinking about 

updating our economic inclusion strategic plan. 
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We'll then move to a discussion and we truly look 

forward to your input, thoughts, and 

perspectives.

And with that, I'd like to introduce 

our speakers for today's panel: Zoya Aleem, Dr. 

Lianne Fisman, and Sarah Wolff in that order. 

Zoya is a Senior Analyst. Lianne serves in the 

capacity of Senior Director for Science and 

Research. And Sarah is a Senior Associate. And 

I should say my name is Montrice Goddard Yakimov 

and I'm the Acting Associate Director for 

Community Affairs.

Zoya, please get us started.

MS. ALEEM: Thank you, Montrice, with 

introductions. Good morning to everyone and 

thank you for the opportunity to join you today. 

My colleagues and I are very excited to share 

with you what we've learned.

Before we start, I'm going to provide 

a quick overview of what we will talk about for 

the next 45 minutes. First, I'll provide an 
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overview of the research that Abt engaged in to 

build out the plan. Second, we will share some 

of our key findings which include insights about 

the prior plan, as well as opportunities and 

challenges for the next plan. Lastly, we will 

talk about how this research informs the 

organization and content of the emerging economic 

inclusion strategic plan. After the 

presentation, we'll open the floor up for 

discussion.

To start with, I'll give you a quick 

overview of the research that Abt engaged in. 

Abt conducted a literature review, as well as 

stakeholder interviews and listening sessions. 

As the slide indicates, we reviewed about 80 

sources to answer 7 research questions. The 

sources included relevant FDIC internal and 

external documents, Executive Orders, and other 

relevant literature that emerged during the 

process. The team also spoke to 57 stakeholders. 

We collected input from FDIC staff and other 
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stakeholders including staff from financial 

institutions, nonprofit organizations, and 

federal agencies beyond the FDIC. We also spoke 

with researchers from a range of institutions 

including think tanks and universities.

For reference, this slide shows a list 

of the seven research questions that guided the 

literature review. The first question examined 

the prior plan and the progress made since its 

implementation. The second question investigated 

the barriers to banking households and successful 

strategies to date. The third question looked 

for evidence of the Community Reinvestment Act's 

impact on the behavior of banks. The fourth 

question addressed the effectiveness of financial 

education and its role in banking households. 

The fifth explored practices, strategies, and 

products that have helped low and moderate income 

households, that is, LMI households build 

savings. The six question examined small dollar 

loan pilots. And the seventh and last question 
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looked at practices and strategies beyond account 

opening that banks and non-banks are using to 

help under-served consumers.

Now we're going to shift gears and 

talk about some of our key findings. I 

specifically am going to share what we've learned 

about the perceived role of the plan, as well as 

views on the opportunity areas for the 2019 plan. 

Then my colleagues will go on to discuss 

additional key findings.

So we asked stakeholders what they 

thought was the role of the economic inclusion 

strategic plan. And a common theme that emerged 

among internal staff was that the plan should 

serve as a tool for internal coordination and 

provide staff with a sense of how their economic 

inclusion work fits into FDIC's other roles and 

initiatives. 

Second, some stakeholders thought 

that the plan should serve as a tool for 

communicating to external audiences and signaling 
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to consumers that economic inclusion is an area 

of interest to the FDIC. We also heard from 

senior staff at other federal agencies that the 

plan should be used to communicate with and 

possibly inspire other federal agencies about the 

FDIC's economic inclusion work. 

Third, others thought the plan should 

serve as a tool to engage partners, such as banks, 

CBOs, other federal agencies, as well as state 

and local government in working towards economic 

inclusion goals in the plan. As you see at the 

bottom, there's a red box that highlights another 

theme that we heard quite consistently from the 

FDIC staff and that was a need for the plan to 

have flexibility built into it. Interviewees 

often cited the success of the bankable moments 

campaign and emphasized how important it was to 

be able -- how helpful it was to be able to pivot 

to leverage the economic stimulus payments to 

encourage people to open safe and affordable 

accounts.
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We also asked stakeholders about their 

views on the opportunity areas from the 2019 

plan. As a reminder, the 2019 plan was organized 

as a ladder as shown here with five rungs called 

opportunity areas. Each rung represented a 

product or point of connection between the 

consumer and the financial institution. This 

ladder shows support financial education and 

capability as the bottom rung and strengthen 

access to financial services for small businesses 

as the top rung.

This slide summarizes insights from 

stakeholders by opportunity area. I will start 

with the bottom rung, for the first opportunity 

area, and work my way up to the top of the ladder. 

Financial education for opportunity area one. We 

heard a range of insights about this area, but 

most consistently we heard that while financial 

education is an important core strength for the 

FDIC, it shouldn't be necessarily a stand-alone 

area and is most effective when paired with a 
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program or an effort. 

Opportunity area two, insured 

transaction accounts. Many stakeholders thought 

that affordable insured accounts are the 

foundation of economic inclusion. Many 

stakeholders also wanted the FDIC to expand their 

focus and think beyond account opening for the 

next plan. They saw other opportunities within 

the area of transaction and savings accounts such 

as making bank accounts work better for people.

Number three, consumer credit. Many 

stakeholders thought that this area is important 

for economic stability. But they also recognized 

that this is a challenging area for the FDIC to 

make progress with banks given market pressures 

and realities.

Number four, mortgage lending. This is 

another area where stakeholders wanted to see 

more done, yet understood the challenges posed by 

market realities. For example, high housing 

prices and elevated interest rates have made 
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housing less affordable and the share of 

mortgages made by non-bank lenders has 

significantly surpassed the share originated by 

bank lenders. Given these market realities, 

interviewees suggested that the FDIC expand their 

focus to include other wealth-building approaches 

or on addressing affordable housing more 

generally.

Lastly, number five, small business 

lending. We've heard slightly different 

responses about this particular area. Some 

stakeholders described challenges posed by --

faced by consumers, getting small business loans 

from banks. And for them, that justified 

attention to the issue in the next plan. By 

contrast, other stakeholders did not talk about 

this opportunity area very much and some 

questioned how important it is given that a 

smaller segment of the population goes on to 

become a business owner. 

Now I'm going to hand the mic off to 
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my colleague Lianne, who will go on to discuss 

additional key findings.

DR. FISMAN: Thanks, Zoya, and thank 

you for having us. I'm going to switch the slide, 

and then I'm going to start off by sharing some 

of the things that we heard from interviewees 

about their vision for the rule and content of 

the plan.

And so I'll start with one of the 

issues that we spoke to interviewees about was 

whether the plan should address the needs of 

particular demographic groups that we know from 

the FDIC household survey and other data are 

disproportionately un- and underbanked. 

And I don't think I need to say this 

to anyone here, but for example, we know that 

Black households are more than five times as 

likely to be unbanked as White households. 

We know that Hispanic households are 

more than four times as likely to be unbanked 

than White households. We know that working-age 
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households with a disability are also four times 

as likely to be unbanked as households without a 

disability.

So the question is how did the folks 

we spoke to think about how we should talk about 

these disparities in the plan. Most interviewees 

did agree or said that they thought that the plan 

should have a goal of closing the racial wealth 

gap. But there was a real split in how folks 

wanted that to be addressed in the actual plan 

itself.

On the one hand, as shown in the light 

blue box on the slide, some said that being 

explicit about subpopulations, particularly 

racial subgroups, would be the right thing to do. 

And these folks indicated that explicit language 

would help the FDIC stay really focused, kind of 

keep their eye on the ball and focus on closing 

the gaps uncovered in the household survey.

This viewpoint is illustrated in that 

first quote I think pretty nicely. Doing the 
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right things means targeting the people who are 

left out. Another person said that race-based 

policies caused the inequalities, so race-based 

policies need to be part of the solution.

On the other hand, as shown in the 

orange box on the bottom of the slide, some 

interviewees saw risks to naming subpopulations, 

or just simply didn't think the plan needed to be 

explicit to allow the FDIC to respond to specific 

challenges, racially or demographic challenges.

And these individuals advocated for 

broader language and strategies that were sort of 

more broadly encompassing.

Moving on to the framework of the 

plan, we asked interviewees, as Zoya mentioned, 

to reflect on the economic inclusion framework 

from the last plan, it's that ladder. 

And just to remind you, that framework 

was built around five opportunity areas that 

really focused on bank products. So there was 

financial education products, bank accounts, 
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consumer credit products, mortgages, and small 

business loans.

Many of the interviewees stressed that 

these five economic inclusion opportunity areas, 

or opportunity areas, have served as a useful and 

productive organizing principle for the FDIC's 

economic inclusion efforts to date. 

In fact, some folks we talked to did 

not want to see them change at all. One of my 

favorite quotes was that somebody described them 

as a beautiful string of pearls.

But other interviewees indicated that 

they liked the opportunity areas, but they 

thought they could be rethought. That the ladder 

was not sort of a good conceptualization. As 

shown in the orange box, there were folks who 

wanted to see the opportunity areas laid out more 

as a menu. Or another person suggested the idea 

of Legos. 

And I think that's in recognition of 

the fact that different people need different 
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things from the banking system at different 

times. That it's not this linear relationship.

In addition to these views, we did 

hear substantial support for thinking about ways 

that we could reconceptualize opportunity areas 

in the plan. Specifically support moving away 

from opportunity areas that focus on bank 

products. This view I think is captured pretty 

well by the quote in the green that I won't be so 

bold as to read, I'll let you read it yourself.

But these individuals thought the FDIC 

should consider reframing the opportunity areas 

to emphasize consumer and community outcomes 

versus bank products. So looking at the outcomes 

that the plan seeks to foster. And the next slide 

will provide a little more detail on what folks 

were thinking about when they talked to us about 

that.

So this slide, as I said, highlights 

some of the themes that we heard related to 

reconceptualizing the opportunity areas. As I 
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said, they kind of centered around organizing the 

opportunity areas around outcomes. Some of the

key themes that emerged from these interviews 

that we found really compelling are listed on 

this slide.

First, in the blue box, a focus on 

consumer outcome, specifically you can see the 

person quoted here suggested that the outcome 

areas look -- the opportunity areas focus on the 

outcome we want to people to have based on their 

relationships with banks. 

Another idea, shown in the orange box, 

is to focus opportunity areas on the challenges 

that consumers face. And these folks suggested 

opportunities be built -- be more person-centered 

around the inclusion barriers that we need to 

solve.

And finally, as shown in the purple 

box, some folks suggested a framework built 

around values, and this kind of framework would 

elevate values-oriented concepts like equity as 
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sort of the framing principle.

Now I'm going to really switch gears 

and talk about some of the highlights from the 

environmental scan, which you know was interviews 

and a literature review.

With respect to the state of --

current state of economic inclusion in the United 

States, these insights have really informed sort 

of the opportunity areas as they've emerged in 

our research. So I'll start with some highlights 

about consumers.

They're shown in the blue box, just to

orient you. You have very colorful slides. We 

know that the share of unbanked households has 

been in steady decline. 

The 2021 household survey indicates 

that only 4.5% of U.S. households are unbanked. 

And this is the lowest rate of unbanked 

households recorded since the survey started in 

2009.

So while this decline is very 
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promising and exciting, the household survey also 

highlights continued disparities across 

demographic groups. 

As I noted previously, households of 

color are much more likely to be unbanked than 

their White counterparts. And furthermore, folks 

with lower incomes, disabilities, and lower 

educational attainment are also more likely to be 

unbanked.

Second, our research elevated 

important events in the financial services 

sector, which are in the purple box. The first, 

probably something everyone here is very familiar 

with, recent bank failures highlighted the value 

of deposit insurance for consumers, and relatedly 

the importance of making sure that consumers 

understand this insurance and how important it 

is.

Another important trend in the 

financial service marketplace is the growing role 

of non-bank financial service providers. This 
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has been fueled at least in part by the rapid 

growth in technology. 

Some Fintech products, I think we all 

know, have some of the same functionality as 

traditional savings and checking accounts. They 

have the ability to receive and store money. But 

of course they're not necessarily as safe and 

secure as insured depository accounts.

Another important trend related to 

non-bank providers relates to mortgage lending. 

And Zoya mentioned the share of non -- the share 

of mortgages made by non-bank lenders has really 

shockingly increased and been -- surpasses those 

made by banks.

And to illustrate just how kind of 

extreme this trend is, I would say consider that 

in June 2023, non-bank lenders made 79% of all 

mortgages purchased by government-sponsored 

entities. And for government-backed loans, like 

FHA and VA loans, was at 93%.

And you know, this is a really 
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important trend for us to think about since these 

government-backed loans are disproportionately 

used by first-time homebuyers, non-White 

borrowers, and lower income borrowers. So I 

think those are some pretty staggering numbers.

Our research pointed to some other 

trends in the housing market that are also 

relevant to economic inclusion and actually as 

excited to hear about them in a CRA presentation 

as well.

So to begin with, the demand for 

affordable housing in much of the U.S. far 

outweighs the supply. So high -- and high rental 

costs limit opportunities for folks to build 

their savings and you know, gain financial 

stability.

In terms of home ownership, which you 

know, Zoya also alluded to, is a key wealthbuilding activity. There's a whole host of 

challenges facing consumers right now, high --

rising mortgage prices, and also difficulty 
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saving for a down payment due to non-mortgage 

debt and that includes student loans. 

And I'm calling that out because that 

-- those challenges are really compounded for 

households of color, who tend to be 

disproportionately by all kinds of non-mortgage 

debt in comparison to White, their White 

counterparts.

To end on a positive note on this 

slide, the fourth economic inclusion trend that 

our research highlighted is shown in orange, and 

it relates to the prior panel as well. It is the 

development of new rules for banks around 

community development. 

And most notable and very celebrated 

in the last hour is the new CRA rule, which as we 

heard expands access to credit, investment, and 

basic banking services in low and moderate income 

communities.

Our literature review also 

highlighted some important external forces, to 
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some degree beyond our control, that might 

inhibit progress toward economic inclusion that, 

again, we just wanted to keep in mind as we were 

thinking about the opportunity areas and 

objectives for the strategy.

The first of these factors is 

inflation. And again, I'm sort of preaching to 

the choir here, but from the second quarter of 

2021 through the first quarter of 2023, the U.S. 

experienced a very high period -- a period of 

high inflation. And how it relates to economic 

inclusion is it made it really difficult for some 

consumers to meet day-to-day expenses, but also 

to manage unexpected expenses.

A second factor, again, I heard it 

mentioned a little bit in the CRA presentation, 

is climate change. Climate change poses a whole 

variety of potential financial risks to consumers 

and communities, including extreme weather 

events, which obviously can cause damaged 

property and property loss, ultimately straining 
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households' financial security.

A third factor that is relevant to 

making progress on economic inclusion, are 

government actions. And as we discussed, 

government actions like the new CRA rule have the 

potential to enhance consumer economic inclusion. 

But of course there are always other future 

actions that can inhibit the FDIC's ability to 

meet its economic inclusion objectives. 

And finally, as alluded to on the last 

slide, emerging technologies present both 

potential benefits and challenges for consumer 

economic inclusion. On the one hand, advances in 

the digital space offer opportunities for banks 

to serve a broader set of consumers, improve 

services, have lower operating costs and enhance 

customer experience generally.

On the other hand, emerging 

technologies also present risks to banks, 

particularly around data security. In addition, 

new technologies has really supported this growth 
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of non-bank financial service providers. 

And they are offering low-cost and 

convenient services that I think do meet the 

needs of low and moderate income consumers. But 

they don't come with the same sort of set of --

the same level of safety and security as insured 

accounts.

Along with sort of our literature 

review that looked at broad market challenges, we 

also talked to our interviewees and looked at the 

literature to think about the challenges that 

consumers face on their journey toward economic 

inclusion. And by far the most common barrier 

that our interviewees raised was trust.

And I think as the quotes on this 

slide pretty clearly illustrate, the 

conversations about trust were often kind of 

enmeshed with conversations about other barriers, 

like such as transparency. 

For example, both these quotes on this 

slide in the orange and green box kind of -- they 
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both deal with trust and transparency. So they 

talk about sort of being burned by bank fees in 

the past and losing their trust in the banking 

system.

The red box at the bottom of the slide 

indicates that trust as a core barrier for 

consumers is really aligned with what we saw in 

the literature. It consistently rises to the top 

as one of the main barriers for folks engaging 

with the banking system.

In addition to trust, we heard about 

a whole range of other challenges that consumers, 

especially low and moderate income consumers, 

face to gaining economic inclusion. The themes 

that we heard from our interviewees aligned with 

the research on these topics and included all of 

the things that I think you would all expect. 

Social factors like racial bias were 

mentioned, and also features of bank products. 

Again, that lack of transparency, fees, lack of 

access to physical banking facilities, and then 
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the mismatch of products that don't quite meet 

the needs of consumers.

I think all of the challenges that are 

on this slide and that we've talked about 

disproportionately impact low and moderate income 

consumers. The quote in the purple box I think 

really captures the disparate impacts of how 

these challenges fall out pretty well. 

The researcher we talked to said it's 

important to acknowledge the cost of bank 

accounts being a hurdle for consumers and 

individuals with low incomes. And I like this 

part, fines increased disproportionately for 

those with the fewest means to pay.

Similarly, the quote about mismatched 

products in that bottom blue box underscores the 

reality that low and moderate income consumers 

have fewer viable choices in the current banking 

marketplace than their higher income peers. This 

person said, majormajor barriers are a lack of 

products that meet people's needs. The banking 
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system has done well at serving higher income and 

moderate income households.

And the red box at the bottom of the 

slide suggests from -- comes from the literature, 

and that sort of elevated some additional 

challenges that we've been thinking about, 

including ID and address requirements, prior 

negative banking history, and language barriers 

for consumers.

Now I'll turn to some of the 

challenges that banks face in terms of taking 

action to promote economic inclusion. 

Interviewees suggested that lack of 

profitability, probably an obvious one of working 

with low and moderate income consumers, or at 

least the perception of lack of profitability, is 

the main challenge that banks face or cite in 

terms of engaging these consumers in a really 

meaningful way.

The quote in the green bubble from a 

financial services professional that we 
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interviewed is illustrative I think of this 

challenge. He said, aa real challenge from the 

bank side is that it's hard to make the numbers 

work and serve them, as in low income consumers, 

and not lose money.

The red box at the bottom of the slide 

kind of summarizes the additional challenges for 

banks include assessing the creditworthiness of 

low and moderate income consumers.

Other challenges that came up, 

Interviewees suggested that another reason banks 

are hesitant to engage in economic inclusion 

activities is because they're worried about 

compliance, and that these concerns inhibit them 

from using new technologies or processes that 

might better serve low and moderate income 

consumers.

And the quote in the blue box captures 

this dilemma, which is that many banks -- many on 

the bank side do recognize that there are 

products and services that could better meet the 
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needs of low and moderate income consumers, but 

they're hesitant to develop them or take them up 

because they have real fear of running afoul of 

regulation.

As the red box at the bottom of the 

slide indicates, the literature actually 

highlights some specific examples of compliance 

barriers that banks cite in sort of inhibiting 

them from serving low and moderate income 

consumers, including the Bank Secrecy Act.

And finally, on the bank challenges 

theme, we heard pretty consistently that banks 

might have internal or infrastructure challenges 

that prevent them from adopting some of these new 

technologies that might better serve low and 

moderate income consumers.

So as indicated in the blue bubble, 

it's really about legacy systems. The legacy 

systems of some banks present challenges. They 

don't often allow banks to securely use, for 

example, new ID verification systems. 
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And a related barrier is the cost of 

implementing new technologies. There's a quote 

in the orange bubble that sort of captures that 

banks and in particular small banks don't have 

the resources to capitalize on these innovations 

that we see I think largely in, well, to some 

degree in the fintech sector.

And finally, as shown in the red box 

on this slide, another limitation to the uptake 

of new banking technologies are the risks. And 

we heard this a lot from FDIC staff, including 

the data security risks that often come with 

digital solutions.

So at this point, I am going to pass 

the presentation to Sarah, who will talk about 

the opportunities for economic inclusion that 

came out of our research and how this research 

might inform the new economic inclusion strategic 

plan.

MS. WOLFF: Thanks, Liane. I'm a real 

optimist, so I'm excited to share some of what we 
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learned about the tools and strategies that banks 

can use to address some of the challenges that we 

just went through.

Starting with the banks. We 

identified three types of tools and strategies 

that banks can use to advance economic inclusion. 

The first is developing products and making 

product changes to better meet the needs of 

underserved consumers. 

The second is developing partnerships 

with other organizations that work with these 

communities. And the third is different 

approaches to marketing and communication and 

otherwise engage directly with these communities.

I'm going to talk a bit more about 

each of those on the next few slides. So as we 

heard earlier, our research identified a mismatch 

between the products that banks offer and the 

products that un- and underbanked consumers need.

It follows, then, that banks can 

better serve these consumers by making changes to 
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their products and developing new ones. 

We identified quite a few examples in 

our interviews and review of the literature of 

some products. In some cases, these are products 

that banks are offering, and in other cases they 

were products and ideas that came from nonprofits 

or other companies.

In addition to specific product ideas, 

we heard that banks can increase economic 

inclusion through the way that they develop 

products, by engaging with the community and 

product development, and evaluating their 

products and sharing what they learned with 

others.

Also we heard that they can use 

technology to bring down the costs and enable 

different ways of providing products and 

services.

Interviewees also suggested that 

banks should build partnerships with community 

groups to further foster economic inclusion. 
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Partnerships can help banks provide services, 

such as financial education or technical 

assistance. Partnerships can also help banks get 

the word out in the community by bringing 

messages through trusted voices. 

Banks can also provide capital to 

community-based lenders to fund loans or provide 

services that banks do not offer. One suggestion 

was for banks to provide capital to minority 

depository institutions or CDFIs, enabling those 

organizations to expand their reach.

Some of those we interviewed 

emphasized that banks could show up differently 

in the community. One area is in the design and

accessibility of bank branches, which are 

particularly important because they're the face 

of the bank in the community.

In addition to more accessible 

communications, one person mentioned the need for 

general communication to help everyone understand 

that banks can be for them. 
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Finally, some people suggested that 

banks need to engage more with the community to 

learn from the community and use what they 

learned then to guide them about how to better 

serve that community.

We heard a lot of specific examples in 

our research about ways banks have successfully 

fostered economic inclusion. These included 

examples of account and loan products, as well as 

broader examples of partnership and outreach 

activities.

For example, one researcher described 

a creative savings product that automatically 

rolls funds over into a savings account once the 

balance reaches a certain level. Multiple people 

mentioned small-dollar loan programs at large 

banks and others, like the ones we're probably 

hear about later this afternoon.

Another person talked about how one 

bank had replaced staff that had been organized 

around products, replaced that sort of structure 
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with a community outreach manager structure at 

some branches.

In addition to what banks can do, we 

talked with folks about what the FDIC can do. 

And four general themes rose to the top. First, 

the FDIC can conduct research. Second, build 

partnerships directly and as an intermediary 

between community groups and banks.

Third, provide support and guidance to 

banks. And fourth, enforce compliance with 

relevant laws, including the Community 

Reinvestment Act.

So a little bit more about the 

research. Many of the people we talked to 

underscored the value of FDIC's research to 

helping understand who is excluded from the 

banking system, why, and in sharing insights 

about how things can be done differently.

The value of the FDIC's household 

survey came up many times. There were also 

suggestions of additional research that the FDIC 
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could conduct that would be impactful. For 

example, by analyzing the banking experiences of 

specific subgroups, such as women-owned 

businesses.

Partnerships are another tool the FDIC 

could continue to employ. People we talked to 

talked about the partnerships at the national 

level, like the successful partnership between 

Bank On and the IRS, as well as local and regional 

level partnerships.

They also saw a role for the FDIC in 

facilitating partnerships between community 

organizations and banks.

In addition to research and 

partnership development, interviewees thought 

that the FDIC should support banks to develop new 

products and services to meet community needs. 

They wanted to see the FDIC give 

support to specific types of new products, such 

as special purpose credit programs or smalldollar loan pilots. And perhaps even develop 
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toolkits and provide support to get new products 

developed and implemented.

Finally, many of those we talked with 

reflected that the FDIC already has a number of 

strong tools that can be used to foster economic 

inclusion, namely, the Community Reinvestment 

Act, which we have recently heard a lot about. 

They specifically mentioned that strong 

enforcement and collaboration with banks around 

the CRA is important for fostering economic 

inclusion.

So now I'd like to share more about 

how what we learned through the research has 

influenced the development of the emerging 2024 

plan. I'm going to talk about some general 

insights that affect the plan, the structure of 

the plan, and then we'll look at two examples.

So the findings we just discussed 

suggested shifts in the content and the structure 

of the FDIC's next economic inclusion strategic 

plan. As shown first in purple, the FDIC's prior 
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plan had been organized according to bank 

products and services that could be leveraged to 

foster economic inclusion. 

However, as we have discussed before, 

stakeholders suggested that the next plan could 

be focused around desired outcomes for consumers 

and their community.

Second, in blue, our research 

highlighted disparities in access to safe and 

affordable financial products across 

subpopulations. These findings emphasize the 

importance of paying particular attention to 

these economic inclusion disparities and in 

targeting strategies to reach those groups.

Third, in orange, the prior plan 

conceptualized financial education as its own 

rung of the ladder, but our research suggest 

embedding financial education within each of the 

opportunity areas. This can be done through 

strategies that provide financial education when 

a consumer is making a financial decision, such 
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as when they're opening a bank account or 

considering buying a home.

The literature suggests that these may 

be more effective times to provide financial 

education than generalized financial education 

classes. The choice also signals that financial 

education is integral to all of the FDIC's 

efforts to advance economic inclusion, and not 

just a standalone program or product.

Finally, shown in green, our findings 

suggest that the next plan explicitly focus on 

enhancing community development outcomes in 

addition to individual level outcomes, with a 

particular emphasis on low and moderate income 

communities.

Here are four potential outcomefocused opportunity areas, which reflect how 

we're thinking about conceptualizing the areas 

for the next plan. 

The first area, in blue, create 

foundational banking relationships, reflects the 
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insight that consumers need both to access bank 

accounts and to use those bank accounts to 

achieve economic inclusion.

The second area, in orange, build 

household financial stability, reflects the 

insight that households need to access products 

and services from banks to help them manage their 

day-to-day finances and to build savings.

The next area, in purple, achieve a 

secure financial future, reflects the insight 

that wealth-building is important for economic 

inclusion. This area encompasses multiple 

pathways through which consumers can build 

wealth, including by achieving and sustaining 

home ownership and business ownership.

The final area, live in strong 

communities, reflects the insight that community 

development merits attention in the plan. This 

area describes an outcome at the community level, 

whereas the other areas describe outcomes at the 

individual or household level.
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In addition to conceptual shifts, 

feedback from the OIG, the GAO, and a review of 

other federal agency plans and guidance about 

strategic planning suggests that the next plan

have a more explicit outcomes-oriented framework 

for each of the opportunity areas.

A proposed framework that could 

achieve those objectives is shown here. This 

framework includes a clearly stated objective, 

monitoring measures, which are macro-level data 

points that the FDIC can track periodically to 

see if the needle is moving in the right 

direction.

Strategies that the FDIC will pursue 

that are designed to help achieve the objective 

in the plan and that reflect that FDIC's 

strengths, and key performance indicators, which 

are measures that the FDIC can track to track its 

contribution to achieving each objective.

Now we're going to look at two 

examples of how this framework could be applied 
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to the emerging opportunity areas. So this is an 

example of how the proposed structure we just 

discussed could apply to one of those areas. 

There's a lot of details, so I'm going to go 

through them clearly and slowly.

First, as we discussed earlier, the 

opportunity area will be -- is conceptualized 

around economic inclusion outcome. In this case, 

it is create foundational banking relationships 

to establish an on-ramp to the U.S. financial 

system, setting the stage for future financial 

success.

In this area, FDIC's objective could 

be to increase the share of households who 

establish and sustain bank accounts using them as 

their primary means to receive income, make 

payments, and keep their money safe.

One monitoring measure that could be 

used to track progress in this area is the share 

of U.S. households who are unbanked, which is 

data that the FDIC collects in the household 
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survey. 

The FDIC would pursue multiple 

strategies to achieve the objective. An example 

is -- example of one is listed here in green, 

develop partnerships with relevant agencies and 

other organizations to connect individuals to 

safe and affordable accounts, leveraging programspecific bankable moments that capitalize on 

consumers' interest in receiving payments.

Finally, the FDIC would track multiple 

key performance indicators to monitor their 

progress and contribution to achieving the 

objective. An example of one such indicator is 

listed in the slide on blue. This example has 

two components. 

The first is a measure of the things 

that the FDIC will do. In this case, it is the 

number of presentations made to banks, trade 

groups, community networks, and other 

stakeholders about promising approaches that 

expand account access and sustained use of 
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banking services.

The KPI has a second component that 

tracks the outcome of that activity, and that is 

that attendees report finding the information 

useful.

Here is another example for a 

different emerging opportunity area, build 

household financial stability. Help households 

build a savings cushion and increase access to 

consumer credit to better manage ongoing and 

emergency expenses.

For this area, FDIC's objective would 

be to increase the share of households that have 

access to and benefit from banking products and 

services to manage fluctuations in income and 

expenses, financial shocks, and emergencies.

One monitoring measure in this area 

could be the share of adults who say they can 

cover a $400 expense using cash or cash 

equivalents, which is data that the Federal 

Reserve tracks in the survey of household 
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economic decision making.

As before, the FDIC would pursue 

multiple strategies and track multiple 

performance indicators to monitor its progress 

and contributions to achieving this objective, 

such as the examples listed here.

So now I'm going to turn this back 

over to Montrice, who will be opening things up 

for questions, conversation, and discussion. But 

before I do, I do want to take a moment to thank 

the FDIC team and for this committee for having 

us here today and for your great collaboration 

through this effort.

MS. YAKIMOV: Thank you, Sarah, Liane, 

and Zoya. And we know that was a lot of hopefully 

you think good information. And so while the 

ComE-IN members may be formulating your thoughts 

about questions, I want to pose an initial 

question to our Abt Associates team.

And so -- collective questions, anyone 

can respond. What do you think, in your view, of 
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the FDIC kind of contemplating this shift from 

the product-focused framework in our economic 

inclusion strategy to more of an outcome-focused 

framework?

MS. WOLFF: Sure, I'll start. So you 

know, one thing I think that the outcomes 

framework opens up -- opens up an opportunity for 

the FDIC to engage with some different 

stakeholders that may not have sort of seen 

themselves or seen partnerships between the FDIC 

and their organization as it related to the bank 

products.

So for example, there might be --

there might be groups who see themselves more 

aligned with building household financial 

stability than they would have seen themselves 

aligned with offering consumer credit.

So there's sort of a broadening of the 

tent that's possible through this different 

framework.

DR. FISMAN: I guess I also think that 
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the outcomes framework will ensure that the FDIC 

stays focused sort of on strategies that really 

are about the advancement of economic inclusion 

for consumers and communities. So you know, 

we're still thinking about bank products, but 

we're thinking about it from a consumer side. 

And so I think thinking about the 

consumer side means that we are more likely to 

reach those outcomes that I think everyone here 

would like to see. And then you know, I'm a 

researcher by training, so I'm always interested 

in monitoring and evaluation. 

And I do think that monitoring those 

particular outcomes, particularly using KPIs, 

will allow the FDIC to see if they are, if the 

strategies they're employing are the right 

strategies. 

And if they're not the right 

strategies, if they're not the right strategies 

that are moving consumers and communities in the 

direction that we want them to be moving, they'll 
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be able to sort of iterate and switch things up 

as they go. I think that's another advantage 

versus thinking more about bank products.

And I'm sorry, do you have anything to 

add?

MS. YAKIMOV: Thank you all. It's 

been great for us to work with researchers to try 

to make sure that as we move forward, we're 

focusing on the right things. And outcomes 

certainly something that we're striving for.

So let me pause there and just turn to 

the committee. Has this presentation prompted 

any questions? So great. Thanks, Susan.

MS. WEINSTOCK: Hi, is this on? Okay, 

maybe I just need to move it closer to my face.

This is great. As I think most people 

around this table know, CFA, part of CFA is 

America Saves. And that is a whole campaign 

around getting folks to save and we work with a 

lot of banks and a lot of other organizations to 

promote savings through employers and all 
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different ways to do it. 

And what we're really -- our theme is 

really to try to build what we call financial 

empowerment so that people can make the 

decisions. So the idea of outcomes, I think 

that's great. 

My one question to you is, and this 

sort of ties into another question I had, was I 

didn't see, and maybe I missed it, the timeframe 

of the research. 

Because I'm wondering about things 

that are beyond the FDIC's control, like Covid or 

very high inflation. Like we saw higher savings 

during Covid, and I think now we're seeing it go 

down and we're seeing consumer credit debt go up.

So I guess my question is, is that, 

you know, the outcome idea is terrific, but how 

do you account for things beyond the FDIC's 

control that are obviously going to affect 

unbanked and banked and indebtedness, consumer 

indebtedness and things like that?
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MS. YAKIMOV: So I'll start, and then 

I'll ask Liz and others to, including our 

research team, to weigh in. You know, one of the 

things that we have built into our emerging plan 

is monitoring measures. 

So the KPIs are, the approach, the 

intent behind that is to be able to measure the 

impact of the specific interventions, the 

specific programs that we would kind of mobilize 

against once the plan is finalized.

But the broad monitoring measures, 

we're looking to see those macro environmental 

factors, those factors that fall outside the 

FDIC's ability to influence, it will give us a 

sense of, you know, scale. Here's what we're 

able to contribute to the reach of our programs, 

as opposed to those broader factors that are 

important to consider as well.

So it hopefully with those two tools 

built into our approach, we'll be able to get 

perspective and insight with respect to those 
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factors that fall outside our control.

MR. BOSTIC: If I could jump in on 

this. So first of all, very great work. Very 

interesting. I was in one of the interview 

things, and it was just a super conversation. 

You guys really pushed us to do amazing things.

On this question, I think there's 

always a challenge because, you know, we do the 

macro economy, and there are huge forces that can 

swamp any kind of effort. So you know, we have 

a similar type of, we did a strategic plan. One 

of our things is improving overall resilience.

And we had a whole conversation about 

this, that you know, Covid happens, or you know, 

a hurricane comes through a community and all 

those efforts go away. So we tried to have a mix 

of metrics, things that were actually the 

endpoint. But also things that were directly 

tied to what we could control as well.

So you could recognize that you could 

do all the right things, but that all these other 
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things happen that prevent the ultimate outcome 

you'd want to get to occur. So you don't beat 

yourself up over those things. You try to be 

clear that when you -- you should beat yourself 

up if things you control you don't do. But that's 

a different thing.

So I did have a question, which was 

this -- actually, maybe it's not a question. It 

will be a comment that I'll finish in a question. 

So this question, this issue of products versus 

outcomes, it goes both ways, right. 

So the thing with products is that --

and you can talk about a small business loan all 

you want, but if you don't have the metrics in 

place to make sure that the goal is to get more 

of them to people who wouldn't get them otherwise 

and all that kind of stuff, you can kind of miss 

the point.

Going by outcomes, though, there's a 

risk, and we've been sensitive to this, that it 

looks like you're going beyond your 
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organization's purview and remit. Because there 

are just -- it's clear what the FDIC can do on a 

loan product, right. 

When you're talking about, what 

strengthening a community, that's a huge thing. 

And people could definitely ask, so is that --

how does that fit to FDIC mission and their 

authorities and all those sorts of things.

So how do you balance those? And if 

you're going to go to this outcome thing, what 

kind of guardrails are you going to put in place 

to make it clear that we understand we're the 

FDIC and not HUD or Agriculture or whoever it 

might be?

MS. YAKIMOV: It's a great, great 

question and something that we've been thinking 

about a lot. So our director likes to say in the 

Division of Depositor and Consumer Protection we 

do two main things. We protect and we connect. 

And where Community Affairs lives is really that 

connection process.
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So imagine a series of objectives and 

approaches that would engage the FDIC within our 

unique ability, our capacity, our mission, 

partnering with a HUD or an SBA, other federal 

agencies that have programs with shared goals to 

expand economic inclusion.

And so imagine an engagement to help 

small entrepreneurs and small business owners 

better access small business loans through 

awareness of loan guarantee programs and 

technical assistance. 

And so that's really how we plan to 

stay within our mission but engaging in other 

agencies. And that's -- those are examples of 

federal agencies, but there are also communitybased organizations with which we collaborate and 

coordinate. Working together, those -- there are 

points of intersection where we have shared goals 

but allow us to maintain our focus. Good 

question.

MS. McHALE: So I'd like to jump in 
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on this, if I can, and offer a -- I was excited 

to see the strong communities framework embedded 

here, but I actually started to connect it as you 

were all talking. You also brought up the issue 

of trust.

And I actually think that it's yes, I 

agree 100%. It's hard to be everything to 

everybody, and this concept of strong 

communities, actually started to hear it as part 

of what makes a strong community is a sense of a 

community's stronger trust in financial 

institutions in communities. 

And there's a connection here. And 

the FDIC playing a role. One is, I personally 

think the FDIC itself is one of the best brands 

we, best, well known brands that we have in this 

country. It's like the Good Housekeeping seal of 

approval. You see the FDIC, consumers feel a 

sense that they're protected.

And so really working to help, again, 

continue to educate how financial institutions 
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work that builds trust in the financial system in 

your local community, which then in turn supports 

more engagement and the product usage.

So I do think that the two go hand in 

hand, and we should think about refining that 

concept of stronger communities as I had written 

it down as strong community trust in financial 

institutions.

And the last thing I'll just say here 

is I think -- I do believe, and I think what you 

didn't say but what I heard was that products 

without usage is not our north star. 

And I would just encourage us to think 

about setting a North Star that's a long-term 

objective, but then setting some shorter-term 

milestones that help to know if we're organizing 

ourselves and using that as a framework to get to 

that North Star. 

I would love to see us reach the north 

stars we're all shooting for in our careers and 

in our lifetimes, and it's going to take -- it'll
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happen in steps and stages.

MS. YAKIMOV: Just said to Liz, we 

need to write that down, that was --

MS. ORTIZ: And so I did.

MS. McHALE: That's very good, because 

I don't think I could say it again.

MR. MINTZ: Three -- two little things

and one larger thing. First of all, on the issue 

-- two issues that were raised before. One was 

about the things you can't control for. 

And I have to really point out, and to 

your question, Susan, about timing, you know, a 

lot of those things you can't control for create 

opportunities that the FDIC grabs, like what 

happened with the stimulus payments and that 

bankable moment watershed.

And so I wouldn't write that off. I 

actually, because I'm inspired by how all you 

have not written that off. And so I just want to 

throw that in there on that issue.

The other issue around -- I thought 
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you raised a really interesting question around 

the FDIC remit and how this squares with that. 

And I would say that I think that, you know, this 

focus on outcomes is mired in how we use our 

connections to banks and community organizations 

to achieve those outcomes. 

So I, for me, it doesn't ring that 

bell of concern. It feels grounded in the muscles 

that you all have. And so I'm excited about that 

and excited about an outcome-based approach to 

inspiring that.

The main point that I want to make, 

which I will make quickly, is that I think that 

an outcome focus as you're proposing, 

contemplating, I think it also helps inspire and 

empower the big swings that the FDIC takes. 

I know so much is going on here, but 

when I think about from my vantage point in our 

partnerships with you all, when I think about the 

really measurable, impactful things you've done, 

the household survey and what people learn and 
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take away from that survey, the safe account 

pilot and all that that's inspired. 

And again, the IRS bankable moment 

extravaganza of an opportunity, when I think 

about those big swings, I work backward from 

there and I say what is it that empowered the 

FDIC team to be able to, I'm sorry to use this 

expression, lean in and make those big swings 

happen. 

Because those big swings are 

extraordinary, and the FDIC team is, you know, 

incredibly good at doing them. So I think that 

if an outcomes-based focus inspires that kind of 

runway, I'm all for it.

MS. BILONICK: Marietta and I are 

coordinated, and when we want to ask questions, 

I thank you for giving me the mic.

So more of a comment than anything 

else, but I was really struck, similar to 

Brandee's observation around sort of trust being 

the core issue, the rigidity of the banking 
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industry and kind of the doing it the same way. 

You know, some of the comments that 

you made around not being able to integrate 

software because it would just kind of throw 

everything off. And so then innovation isn't 

able to occur. Which, and by innovation I mean 

innovation that would result in inclusion.

But I thought particularly about kind 

of the staffing structure of banks and how they 

don't really permit for true engagement in 

communities. 

I know some banks are experimenting 

with, you know, like there's a community manager 

model where staff sort are salaried staff. They 

don't have lending targets, they don't have 

commission. They're just, you know, kind of 

pulling on overhead.

But I think sort of the inherent 

structure of banks and just even just the 

organizational structure, how they're organized, 

what the staffing structure is, prohibits deep 
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engagement in the community, which then prohibits 

informed product design, prohibits the 

development of trust. 

And I don't know how much of an 

appetite there is. It doesn't really benefit the 

bottom line, or it could long term, definitely 

the long game could benefit if you had super 

responsive products that had a big uptake in 

communities. There would be a bottom line 

benefit.

But it just, I kind of wanted to share 

that observation because I felt like there was a 

thread throughout about this kind of rigidity 

that prohibits deep penetration in communities. 

So just throwing it out there.

MS. ORTIZ: Thanks. Naomi, do you 

want to jump in on that?

MS. CAMPER: Yeah, I want to just --

MS. ORTIZ: Okay, and then Marietta's 

with you.

MS. CAMPER: Respond. So you know, in 
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some sense I think -- I assume the rigidity that 

you were talking about in terms of systems has to 

do with many community banks being reliant on 

core service providers who are few in number and 

large in their influence. 

And so I think there may be some 

instances where banks are less nimble than we 

would like because of some issues and some are 

speaking of things beyond their control. I think 

it's important to understand that.

And then obviously there are 4700 

banks and they I think have a wide variety of 

operating models that help them engage or not 

engage. 

But the way that these core service 

providers, the big three that have the vast 

majority of influence looms very, very large in 

the industry, especially among our smaller banks. 

And it is their rigidity, not, you know, the 

banks'. So just clarifying that, thank you.

MS. RODRIGUEZ: The focus to center on 
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outcomes really I think rings true. I think it 

will help build greater connection and muscle 

into the communities. I think that's -- I think 

centering on that is really insightful.

I do want to talk about this issue of 

trust, because I think it rings true with what 

we're hearing from folks on the ground in 

multiple ways. One, how financial institutions 

show up in communities, particularly low to 

moderate income communities. Just what their 

presence looks like matters in developing trust.

And that's, and I don't know, it could 

be through staffing and how to structure. It 

could be what they choose to sponsor and what 

they choose not to -- there's a variety of ways 

financial institutions are present in 

communities. And it can either foster or 

unintentionally undermine trust in that 

community.

So that, I think that'd be the first 

thing. I think the notion of having really, a 
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whole myriad of a menu of safe financial products 

that are under-utilized I think is a challenge 

for all of us. 

And as we think about what the 

outcomes we want, particularly for those that are 

underbanked, I would just encourage the FDIC to 

think through the tactics and strategies to get 

deeper penetration in the community that doesn't 

also inadvertently undermine trust.

So I'll give you an example. So we 

had a pilot about how to report rent payments on 

someone's credit report so they could start to 

build credit. And there was one strategy that we 

would just enroll everyone, and then if people 

didn't want to be involved, they would opt out.

That really undermined trust because 

people didn't have a choice. And we have to 

remember that all consumers are coming into a 

financial institution with a set of experiences 

that may not have been great. 

And so the least, if we narrow their 
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choices, that ultimately undermines the trust in 

that relationship, and you're already starting in 

a bad -- whether it's conscious or not.

So I like the outcome-based. I think 

the devil will be in the detail on how you 

implement strategies and tactics that don't 

undermine this trust matter. Because it's very 

real.

Good point, Marietta.

Margaret?

MS. LIBBY: Yeah, thanks. So building 

on the idea of trust, well, before I do that, 

I'll say I love the idea of focusing on outcomes, 

because it does give people, and also just having 

them kind of roll up into a north star. But I 

think it organizes people with a focus, right, 

and a direction. 

And it seems if the outcomes do focus 

on things that have to be achieved through 

partnerships, you're sort of baking that idea 

into the way that the FDIC is going about the 
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work, which I think does really build on the 

strengths of, you know, some of the things that 

you were talking about, Jonathan.

I think the piece around communities 

and strong communities and trust, I do think is 

really important, and especially I guess I would 

say the idea of partnerships with community-based 

organizations is critical. 

And I think you used an example about 

like a radio host who had a lot of relationships 

visibility and trust. And I think finding those 

kinds of, whether it's a radio personality, a 

community organization, and I know the FDIC has 

done a number of this kind of engagement with 

communities.

But that is, in our experience, 

essential to get young people interested in 

banking. Because, you know, when you were 

talking about some of the cultural differences, 

or I guess I'm talking about that, you were 

talking about, right, trust and branches and sort 
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of what happens there. Our young people talk 

about the cultural differences of just older 

people, younger people, the feel of bank branches 

and sort of welcoming, not welcoming. 

And I think they're clearly doing a 

lot of different, or using a lot of different 

approaches to banking. And so I think the 

importance of having the right messengers is 

important, and those are I think often community 

groups. 

And I guess I wanted to underscore an 

issue that came up I think at our last meeting 

around building, you know, toward these kinds of 

outcomes and knowing that these sorts of 

partnerships are essential to fostering the 

trust. I think identifying how to support those 

community groups to be playing these significant 

roles is important. 

So I think considering resources and 

how the FDIC is going about a set of activities 

that would sort of require that kind of support 
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from these sort of anchor institutions I think is 

something to consider to make sure that they're, 

you know, getting the support they need to engage 

in this kind of work.

But yeah, really excited about the 

direction and a lot of gratitude for the work 

that you've done.

MS. ORTIZ: Okay, Brandee?

MS. McHALE: Thanks, this will be 

quick. I actually want to bring us full circle. 

And Susan, you stopped a little short 

of where I thought you were going, but I want to 

just say in the world that we live in of scarce 

resources combined with lack of consensus, 

sometimes what I find is the best way to have a 

path forward is to really try to focus.

And I would really like to just 

connect this idea of outcomes, trust. And maybe 

one way to do that, and aligning with the 

incredible brand that the FDIC has, with savings. 

And that really doubling down on how, and that is 
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so critical to strong communities. 

It kind of is the -- can knit together 

a lot of these pieces and is really foundational, 

that the more households feel empowered to save, 

they have savings, it creates resiliency and 

creates then -- and that their savings is

protected. It's just reinforcing, and I just 

think really foundational.

MS. YAKIMOV: Great, thank you, 

Brandee.

MS. WEINSTOCK: And if I could just 

say one more thing about that to add onto that. 

We need to make sure like the safe accounts always 

have an option to have a savings account that 

goes with it. 

I was surprised to learn recently 

about a bank that is offering a no-overdraft 

account, which is wonderful and people are taking 

it. And I said does it link to a savings account, 

and they said our 1980s systems don't talk 

together, so it's hard for us to do that.
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And it just sort of deflated the idea 

that they had this great new account, they're 

pushing it out, but they can't add a, just like 

a sidecar savings piece to it because their 

systems don't talk to each other. 

So I'm not blaming the bank for that, 

it's just you got to figure out to get past that, 

and maybe there's things we can do.

MS. LIBBY: And if I could just add 

one thought. You know, we've really been 

thinking about the messaging around savings, 

because I think you're right, Brandee, that it's 

a powerful concept. 

But also, with the struggles people 

are having financially right now, we've heard 

people sort of shut down around the idea of saving 

because it feels like, wait, what. Like I am 

hustling to sort of get through the day, get 

through the week. 

And so the idea, you know, it's very 

aspirational, or it's met with a little bit of a, 
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it can be a tough thing to contemplate in these 

-- in this moment. So I think figuring out ways 

to message that in the right way is really 

important. 

Because it is a powerful concept, it's 

sort of what we're trying to get people to. But 

I think the messaging is really important, 

especially in this moment.

MR. MINTZ: I'll delay lunch by ten 

seconds more just to add one of things that we've 

learned is that, and I think this really 

dovetails with what you're all saying, is that 

people with -- who are living closer to the margin 

and making it work view their primary checking 

account as their savings vehicle. 

You know, they're keeping money in 

that account, and they're not spending it in that 

account. It's in the account, it hasn't gotten 

spent. It's very much sort of like a beta savings 

kind of approach. I'm not sure if that's the 

right term exactly.
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And I think that that really dovetails 

with your point about the FDIC brand and talking 

about a safe place to be able to manage your money 

in a way that contemplates savings in the early 

ways that people contemplate savings.

MS. ORTIZ: All right. Well, thank 

you, Panel, thank you, Committee. Normally I 

would motion to the chairman and ask him if it's 

okay for everyone to break and go to lunch, but 

I feel really empowered right now, and so I'm 

going to say it's okay for us to break and go to 

lunch.

I'm also going to tell the chairman 

that this panel received a standing ovation.

(Whereupon, the above-entitled matter 

went off the record at 12:03 p.m. and resumed at 

1:21 p.m.)

MS. ORTIZ: All right. Welcome back, 

everyone. We're going to kick off the afternoon 

with the member’s round table. Ms. Marietta 

Rodriguez, you are our newest member, you have 
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the honor of kicking us off.

MS. RODRIGUEZ: It feels a little 

unfair and a little like --

(Laughter.)

MS. RODRIGUEZ: Committee hazing.

CHAIRMAN GRUENBERG: No pressure, 

Marietta, but it's an indoctrination sort of.

MS. RODRIGUEZ: Great --

CHAIRMAN GRUENBERG: Why don't you 

stand up while you deliver --? 

(Laughter.)

MS. RODRIGUEZ: So, I will say that 

from -- the comments I make obviously are 

reflecting what I'm hearing from the 

NeighborWorks network. We have 247 locally-based 

non-profits throughout the country, we have one 

in every state, including the District of 

Columbia, and we have four organizations that 

work on the island of Puerto Rico. And I would 

say, similar to what we heard and what you're all 

experiencing, the headwinds of this work are 
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strong and growing stronger every day.

Three big themes, two major headwinds 

and maybe a tailwind, I think time will tell. 

But the first one is, there's still a lot of work 

to be done on creating pathways to affordable 

homeownership and rental, because the inventory 

challenges are so incredibly severe. And while 

so many of our organizations develop both, rental 

and homeownership units, the access to capital is 

challenging -- the interest rate environment is 

even more challenging. So, the need for subsidy, 

and the investment stacks that groups have to put 

together just to get a deal started, are growing 

in complexity and sophistication. And then, you 

have to do compliance on all of those layers of 

financing.

And as a result, for the developers in 

our network, their requirement from their CFO, 

perspective, their asset managers, their mortgage 

lenders, these non-profits are growing in 

sophistication by leaps and bounds. And the 
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ability -- we talked about this a little bit at 

lunch -- to attract and retain skilled staff in 

this environment is a challenge, and a major 

headwind, particularly on the real estate 

development side.

But, despite all of that, they are 

doing some incredible work. We are getting units 

in the ground, we are creating homeowners even in 

this environment. What I would encourage is 

deeper and more robust partnerships with 

financial institutions. The need for down 

payment assistance is greater today than it ever 

has been, so how can we take special purpose 

credit programs and other tools like that to a 

greater scale is something that we're desperate 

to do, to try to meet the demand for those people 

who want to pursue homeownership. Particularly 

for communities of color.

I think the second major headwind, if 

I was going to put it in a theme, would be around 

the work of our housing counseling network and 
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our financial coaches. Both do separate things. 

So housing counselors, just to lay the 

groundwork, help people for -- individual 

interventions -- to become a homeowner, maybe 

even in a crisis intervention. Where a financial

coach really meets the customer where they are, 

and helps them decide where they want to go and 

supports them along that journey. That's an 

important distinction.

And what we're hearing, very much like 

what we heard this morning, was this issue of 

trust, where consumers have a great deal of trust 

for community groups and non-profits in their 

community. But, when there is a handoff to a 

partner who's providing a product or a service 

that can sometimes sever that trust or impact 

that trust. And so, thinking through how we offer 

safe financial products to consumers, not in a 

referable way -- not in just a referral but in an 

invitation, having them choose the service rather 

than sort of forcing them on that.
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I would also say the second theme in 

the housing counselor and coaching space is 

having enough to meet the demand, and having 

enough housing counselors and coaches that 

reflect the community for which they're serving. 

Particularly where communities are doing business 

or functioning in other languages other than 

English. What we're finding is, housing 

counselors and coaches who are bilingual or 

multilingual are burdened, not only to see 

customers and manage a pipeline, but they're also 

burdened in that organization to translate 

documents and do other things. And it's really 

hard to pay those staff and retain them, and the 

burden that they're carrying is really tough.

Related to that, which was a complete 

surprise to me in some ways, is -- a couple of 

weeks ago we hosted a webinar for housing -- for 

financial coaches that was entitled Traumainformed Financial Coaching. And it was not in 

an effort to create clinicians of our financial 
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coaches, but rather help them understand that 

when customers come to them, clients come to 

them, they're coming with a set of experiences 

that may not be so great. I mentioned this a 

little earlier, that we've lived through a 

pandemic, maybe an economic meltdown, maybe a job 

loss.

There are all these things that are 

influencing the economic behavior and decisions 

of these consumers. And being able to step back 

and understand that the trauma that they've lived 

through is really changing the way financial 

coaching is being delivered, I think in a more 

positive way. And we're seeing a lot more 

positive outcomes as a result of that. But, it 

was a webinar that was way over subscribed, 

people stayed longer than the scheduled time. 

So, there's clearly a demand there and we're 

trying to figure out how to meet that more, but 

it's grounded, again, in this issue of trust.

And then, I think if there is a 
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tailwind -- I mean, I think there is some things 

that are happening to be excited, certainly the 

prospect of the implementation of the new CRA 

regulation is one. This is a headwind, perhaps, 

and a tailwind, but how climate resiliency is 

impacting the way communities are providing 

services and products, certainly. We are hearing 

particularly from our multi-family organizations 

who provide multi-family housing, the insurance 

issues related to climate is huge and they're 

really challenged to maintain insurance, and 

maintain these properties. They're working on 

such thin margins anyway, any increases they 

can't increase the -- pass that on to their 

tenants. So, that's a challenge.

But the headwind here -- or the 

tailwind rather, here I think is, there is a lot 

of money being put out in climate resiliency 

through the Department of Energy and EPA. And I 

think that community groups working in housing 

could be a very strong partner and implementers 
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for some of this work. It's a lot of money. But, 

we're sort of blind to the EPA and they don't 

know us in this realm. And so, we need to make 

ourselves known, and how we can partner on the 

ground to help move the needle on some of these 

issues that are that really crippling some 

organizations, and crippling, obviously, some 

communities.

So, those are the themes. I hope that 

was the expectation. So, I'll pass it along.

MS. ORTIZ: That was a perfect 

example, a model for others -- Jonathan. No, not 

you. It's just, she's a model for you --

(Laughter.)

MR. MINTZ: Ow. Wow. Liz, I think 

you're --

(Simultaneous speaking.)

MS. ORTIZ: Just a little bit of 

payback for the Sunshine Act.

MR. ANTONAKES: I cede my seven 

minutes to Jonathan.
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(Laughter.)

MR. ANTONAKES: Good afternoon, 

Chairman Gruenberg, fellow members of the 

Committee, the professional staff at the FDIC. 

Thank you for hosting this important meeting. 

It's an honor to be here. In recognition of the 

number of Committee members yet to speak, I will 

try to be brief whilst building off of Marietta's 

first theme.

One of the greatest obstacles to 

economic inclusion efforts in Massachusetts 

remains the ongoing affordable housing crisis. 

Current home values, local zoning ordinances, a 

lack of affordable housing stock, rising interest 

rates are creating significant barriers for 

first-time home buyers and minority home buyers. 

And it's threatening the future prosperity of the 

state, with growing numbers of young people 

facing no real prospect to purchase a home and 

instead paying exorbitant rents.

As reported recently in the Boston 
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Globe, historically the average home purchase 

price in Massachusetts has been three times the 

median income. Now, that's a stretch but 

potentially manageable. Currently, the average 

home purchase price in Massachusetts is eight 

times median income. As further evidence that 

this crisis it's not limited to Massachusetts, 

according to the National Association of Realtors 

the nationwide age of the median first-time home 

buyer has increased from 29 to 36 since 1981.

It's well documented that 

homeownership helps spur wealth creation. The 

inability to provide affordable home ownership 

opportunities will retard other efforts to 

improve economic mobility. A different challenge 

is the growing surplus of office space in urban 

communities throughout the United States, 

resulting from the significant changes in work 

habits and space needs since the onset of COVID19. Greater remote work has also impacted a host

of small businesses that support these workers,
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growing office and storefront vacancies will also 

reduce tax rolls in municipalities.

Having previously worked in 

Washington for five years, it is striking to me 

during these visits to see how much the city has 

changed since the pandemic, and the significant 

reduction in foot traffic. The Biden 

Administration recently released a guidebook to 

available federal resources, to promote 

commercial to residential conversions. The city 

of Boston has launched a pilot program to further 

encourage these conversions, and I know there's 

been efforts in New York and Chicago to try to 

focus on this challenge.

These are welcome developments but, as 

you all know, further resources, including 

perhaps broader tax subsidies and other 

incentives, will be needed as these efforts to 

become feasible. As the conversions are 

exceptionally expensive due to changes in 

plumbing, electricity, office floor plans, 
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windows, building code requirements, etcetera. 

Nevertheless, seemingly there is an opportunity 

to think bold here, in an effort to both, manage 

increasing office vacancies and potentially 

address the ongoing horrible housing crisis. 

Thank you.

MS. ORTIZ: I'm going to just ask you 

to hold the mic, please.

MS. BILONICK: I don't know if it's 

on.

MR. BOSTIC: It looks like it's on.

MS. BILONICK: Does it sound like it's 

on? I don't know.

MS. ORTIZ: Does it sound like it's on.

MS. BILONICK: Hello? No. All right.

(Simultaneous speaking.)

MS. BILONICK: Talk about leaning in. 

So -- he said it first but then I -- recalling 

your joke, Jonathan.

So, again, Marla Bilonick, not to be 

confused with ORLA, the new acronym that we've 
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all learned today.

(Laughter.)

MS. BILONICK: I had to do it. So, 

I'm going to be speaking on behalf of a little 

bit of a different perspective. I've come, you 

know, other times that I've been here sort of 

speaking more about the Latino community, but 

today my remarks are more about Latino-serving 

organizations, economic development 

organizations, and CDFIs, and sort of what we're 

looking at right now.

So, a couple of things we've obviously 

been keenly awaiting, the finalization of the CRA 

rule. So, we're very excited to hear the updates 

today that we got, and look forward to learning 

more and to diving into that 1,500 page document. 

But, of course this is very important for our 

industry, especially for NALCAB as the largest 

convener of Latino CDFIs in the U.S.

We also are keenly watching 1071 and 

hoping that this will come to fruition. CFPB 
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Director Rohit Chopra was with us on Monday, 

speaking to our staff and board about many 

issues, including immigrant-related financial 

predatory behaviors. But we, you know, sort of 

pressed on him the urgency of 1071. And I know 

there's a lot surrounding that, with regard to 

even just the CFPB's sustainability as an 

organization. But, that's top of mind for us.

We're also very, very patiently 

awaiting the revised certification process for 

CDFIs, to become certified. I am the Chair of 

the Community Development Advisory Board to the 

CDFI Fund, and we are told that it will come out 

this fall. Which could be as late as December 

22, which is the last day of fall, so any day now 

or by December 22. But, that is very important 

to us, because we actually have active 

programming around pushing through more aspiring 

CDFIs to become certified as CDFIs. You may or 

may not be aware that there are approximately 

1,400 CDFIs, and less than 200 Latino-led CDFIs. 
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And knowing who CDFI's serve, that's a big 

disconnect.

Another issue that we're really, 

really following is the once in a lifetime 

investments, the federal investments that are 

coming through, and sort of how our membership, 

how our member organizations can tap into those. 

And how the communities, where there will be 

large infusions of funding. How that either, 

doesn't decimate the communities that they're 

coming to and/or how the community members' 

businesses, organizations actually benefit from 

that.

And I like to think of it as, you know, 

areas that are in drought. When massive water 

comes through it doesn't necessarily immediately 

soak into the soil, it kind of can just rush 

through and rush over. And so, we're really 

trying everything that we can to kind of 

understand how to get ahead of that flood of 

funding, so that our communities benefit and 
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actually obtain the economic vitality that these 

investments will create. And specifically, those 

are around the EPA's Greenhouse Gas Reduction 

Fund for which NALCAB was part of the Community 

Builders of Color Coalition's Justice Climate 

Fund application that was submitted.

We also are looking at the tech hubs 

that were announced last week, and sort of how

those will or will not benefit our communities -

- and we're really hopeful that they will. CHIPS 

funding that's going to come down, and then also 

the Digital Equity funding that's going to come 

from NTIA. Those are all huge, billions of 

dollars of investment.

And not -- I don't want to say not 

coincidentally -- but these are not areas that 

our communities are very versed in working in. 

We have been focused on the immediate needs of 

our community, whether that be housing, small 

business development, jobs. While there's no 

doubting that the climate challenges are here 
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today, front and center, I think our industry 

sort of viewed it as a longer term challenge. 

And now it's, you know, it's here, and so we 

really need to ramp up and get up to speed.

And I would say, you know, for the 

technology investments as well, it's -- you know, 

we haven't done a lot there. And so, we quickly 

have to become green lenders, experts in 

broadband, figure out how to get our businesses 

greened, and, you know, just figure out how to 

work in these spaces where we don't have as much 

experience.

The last thing I'll say is just, we 

are very concerned with the Supreme Court's 

ruling around affirmative action. We actually 

have a member that has been sued for 

discriminatory practices, for having implemented 

a COVID loan program for minority and/or womenowned businesses. And so, this is very real, 

like, we have this example, and I'm sure it is 

the first of, unfortunately, probably many that 
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will come. And so, it's something that we're 

really watching, you know. And I'll just share 

personally that, we were in a conversation with 

a foundation that asked us not to use the word 

Latino in our application, which would be 

impossible because it's in our organization name, 

so, you know.

But, this is emblematic of sort of 

what may have been buried before and is now rising 

to the surface. So, it's something that we're 

very concerned about both, for kind of the turn 

in society as well as how it could affect our 

membership, and our work. So, hate to end on 

that note but that is sort of the list of our 

priorities of challenges that we're facing.

MR. BOSTIC: So, good afternoon, 

everyone. It's good to be here and get to see 

you all.

I wanted to start with inflation and, 

you know, I talk about inflation probably more 

than just about everybody else in the country 
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these days. But inflation is high and it is a 

drag on all Americans, but especially those who 

are closest to precariousness. And we hosted a 

-- we, the Federal Reserve, hosted a Fed Listens 

series where we go around the country and we ask 

people sort of how are you doing. And we have a 

dual mandate of inflation and full employment, 

and we ask which is worse, and inflation always 

comes up worse.

And so, our focus on inflation is 

front and center, and hopefully we will continue 

making progress in getting inflation back down to 

our two percent target. Because, if we get there, 

that creates a foundation for everything else to 

happen. For people to have jobs and for people 

to be more secure in what they're doing.

And I actually gave a speech in New 

York at The New School for Social Research on 

October 19, it was a Schwartz lecture. And I 

talked a bit there about how the Fed's approach 

to monetary policy has been informed by things 
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that have happened over the last ten years, as 

well as these Fed Listens issues.

And I think we are much more sensitive 

to inflation's role, but we're also sensitive 

that the economy can evolve in ways that the 

models would suggest inflation would increase in 

and it won't. So, through the late 2010s we saw 

record employment continue, and every model said 

inflation was right around the corner, and it 

never came. And it sort of helped us think hard 

about what our policies should look like, and how 

we should go moving forward.

Have to celebrate CRA, you know. 

Getting to a place, for me, I think uncertainty 

for banks has been a barrier to full engagement 

in the community. And I'm hopeful that CRA will 

go a long way towards making it clear that we 

need banks to do a wide range of things. Banks 

on the ground have a good sense about what those 

things could be, and we don't want any 

uncertainty to stop them from doing those things. 
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That would be a great thing. And I know the folks 

here in this building have worked really hard on 

this, I had some staff doing this as well and 

it's been very good.

We have been -- at the Atlanta Fed, 

we've been thinking a lot about payments 

inclusion because, as technology has evolved the 

modes of payment have shifted in ways that might 

leave certain people behind. And so, we stood up 

special committee on payments inclusion, Mark 

Pearce here was part of that. And we had our 

final, I guess -- it's not clear it's going to be 

the final -- but technically, for the charter of 

that committee, we had our final meeting and 

conference over the summer.

It was really good from a research 

perspective, and the final report should be 

coming out in the next couple of weeks, I'm 

hopeful. It has a bunch of recommendations for 

next steps to continue the conversation. So, we 

make sure that payments aren't a barrier to 
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people engaging in the financial system, using 

financial transactions.

We did a lot on education at the 

Federal Reserve, and in our bank. We have a long 

history of training trainers, particularly in the 

high school level, about economics, personal 

finance and the like. We're continuing to ramp 

-- COVID was hard on this -- and so, we're trying 

to get that back going again to try to move things 

forward. One area where we have created some 

really nice partnerships is with state councils 

for economic education, they do a lot. And we 

have been able to sort of propagate some of our 

things through them, to get our tools out into, 

like, regular people's hands. Which is, you 

know, the goal is to get to regular people, and 

that's a good thing.

And then, the last thing I would say 

on this also. We have what we call a Fed 

Education Fellows program, we are building 

curriculum for fifth-graders and eighth-graders 
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in this space. Because, it's my view that we 

need to increase the pool of people who think 

they can contribute and be good in this stuff. I 

think too many people are getting bad 

reinforcement early on, and it really causes them 

to not want to view this as something that's 

worthwhile. So, we have to change that cycle.

And the last thing I would say, and 

this is -- Naomi, you may talk about this a bit. 

I have been getting increasing reports of growth 

in fraud in finance and banking, and this is a 

barrier to financial inclusion. The disruption 

that happens is hard for someone with resources, 

if it happens to someone without resources it can 

be incredibly disruptive and difficult.

So, I know the ABA has an initiative 

on this. And I think all of us need to lift this 

up and increase the awareness of this, to make 

sure that people understand that -- so, I think, 

Liz, you didn't say this, someone else said this 

-- but about protect and connect. This is the 
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protect part, this is -- and it's old style, this 

is check fraud type stuff, it's stuff that we 

thought we didn't do anymore, we didn't see 

anymore. So, this is one I think we really need 

to lift up.

Let me just also say, it has been such 

a privilege to be on this committee. I want to 

thank the FDIC for inviting me, and all of you 

for helping to make this an incredibly rich and 

learning experience.

MR. CALHOUN: Perhaps I should give 

all of my time and let Raphael continue. I would 

learn a lot from it. 

Just following up on what he said on 

fraud, at a recent event with a major bank, they 

said over 90 percent of their online account 

opening applications were fraudulent, and they're 

almost all bots. They're not even people, but 

that is the level. It is not a cottage industry. 

It is a major industry sector of pushing fraud 

and not to be forgotten.
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So, these comments go back to some of 

the economic inclusion, and I did not want to 

stand in the way of folks and lunch, so I saved 

it for now, and I'll try and be real quick. The 

first one was, you know, we talked how much it's 

about trust, and I really do think most people, 

you know, particularly with finances, don't want 

to be an expert. They want to go to a place that 

they're trusted, where they trust the people and 

that they are treated well. 

And I think the evidence is strong 

that that is frequently not the experience for 

Black and brown people who go into banks. There 

are numerous studies, whether you look at 

comparative small businesses that go into banks. 

The National Community Reinvestment Coalition has 

been testing on that.

Another group recently did a test on 

housing, and this is the complaint I get from 

many, many people is every Black applicant who 

went in was referred to an FHA loan even when a 
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significant percentage of them qualified for much 

cheaper GSE loans. So, I mean, these are not --

you see that with other services. 

There have been high-profile 

examples, but they aren't just anecdotes by any 

means, and somehow that's got to be part of the 

COA enforcement or just the message with banks. 

If you want -- if we're going to advance 

inclusion, people got to feel like it's a place 

they're going to get treated fairly, and too 

often that doesn't happen.

It goes down to everything. You talk 

about, you know, tying it to the FDIC insurance. 

How do you do that? Who are the messengers? You 

know, it's striking that you look at Black 

households are five times as much to be 

underbanked. They're 2X times as likely to buy 

crypto, so somebody knows how to market and we 

could pull some things out of their playbook.

The second thing there would be the 

products that are there and they really today 
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still really reinforce racial disparities and the 

racial wealth gap, and one I've spoken about 

before is you look at -- if you go into banks, 

and this is virtually universal, the only product 

they offer to tap your home equity is a HELOC. 

Most of them, it's very hard to find standalone 

second mortgage products, and most banks have a 

cut off, a minimum credit score of 680. 

The majority of Black homeowners in 

this country are probably below 680, particularly 

when you look at the FHA population. So, you're 

cutting off home equity loans to the majority of 

Black homeowners, and that is somehow okay for a 

federally subsidized banking system. I just 

don't understand why that is not an outrage.

And particularly in these times, and 

we've published on this, the only alternative for 

folks is they are going and getting cash out refis 

where they're refinancing their entire mortgage, 

bumping the mortgage rate up by 300, 400 basis 

points to get the cash out, and we've got a 
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calculator. If you want to be depressed, go on 

our website. 

It's costing the average, and this is 

for looking at what the actual transactions are, 

the average homeowner over a seven-year period is 

losing close to $50,000 compared to if they were 

given a second loan at 13 percent interest. And, 

you know, again, how do we have a federally 

subsidized banking system where that -- and this 

is, you know, 10,000-plus households every month. 

This is not, you know, a drop there.

We'll hear later today, it's 

encouraging about this small dollar lending. I 

think that's a positive step there. And then a 

related one that is here, and this is 

inclusiveness all around, it's what I call the 

scarlet D.

And we are all schooled. You know, 

I've run lending programs at Self-Help Credit 

Unions, you know, been in charge of compliance, 

and you want to avoid delinquencies and defaults, 
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but delinquencies are often equated with 

defaults. And, you know, at Self-Help, we were 

almost shut down in our first ten years because 

we did home lending to LMI households, and we 

were running ongoing delinquency levels in the 

high single digits, and the regulators, these 

were credit union regulators, were freaked out.

And really we fought with them to keep 

the program live, but we showed over time that 

those people would cure because they needed a 

place to live. This is the one that made the 

most economic sense. It's not like you give up 

your house. You've got to move, come up with a 

new security deposit. You know, these were not 

the strategic defaulters out there.

And we just have to recognize that 

increasingly, the new bank customers, the new 

homeowners are coming to the table with much less 

family and individual wealth. They're in jobs 

that are much more subject to financial 

disruptions.
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And we have to build products that 

recognize that rather than the idea that, yes, 

you want people to work hard to stay on the 

payments on time and avoid avoidable 

delinquencies, but we also have to serve people 

who will have delinquencies but will cure, and 

not treat them as we tended to do, for example, 

in the 2008 crisis. If you were behind on your 

payment, you were a bad person, and if you 

weren't, we gave you a HARP loan and cut your 

interest rate by several hundred basis points.

And then finally, related to this, and 

this is a place -- this may seem like a little 

non sequitur, but it is, is a place where I think 

the FDIC can add, is something missing in our 

field is RCTs, random controlled trials, of what 

really works and what does not. And so, right 

now, we're in the midst of this sort of 

reassessment of credit in the mortgage field, but 

in others as well, of a tradeoff between equity 

versus liquidity. 
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So, in the mortgage area where it's 

been more pronounced, do you want a ten percent 

down payment or even a five percent down payment 

if it leaves the borrower with no credit reserves 

at the time they're moving into a house when most 

people have increased expenses? There is a lot 

of evidence and there are a lot of folks in 

industry who are moving in this direction of 

finding the right place. 

We're running a program, and we were 

talking about this at lunch, where we will do up 

to 100 percent LTV and we like to give big down 

payment grants, but that money usually runs out 

early in the year, and we're giving $2,000 

reserve fund grants that is kept in a separate 

account if they have a financial emergency. 

We've talked with other folks. We want somebody 

to take that to scale, and does that work? And 

then what -- you know, in a diverse group of 

communities?

And I'll just give you an example. 
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This cuts across lots of policy areas. There 

have been -- and as an economist here, you've 

seen a zillion studies, and one of them was just 

in the international area, we were talking about 

it also at lunch, was there was a raging debate. 

Literally, this has gone on for decades, is 

should you give essential supplies to people or 

should you charge them at least a nominal sum?

If you give them fishing nets, if you 

give them a way, will they turn them into party 

fixtures or something? And the debate raged, and 

raged, and raged. Well, they actually finally 

ran a controlled study and got an answer that 

pretty much everyone accepts. 

I'll make you read the study to see 

which it was, but it's the same here. You know, 

how do we, even on small dollar accounts, what 

are the things that really do work? I mean, 

they're not easy to do. 

I don't want to trivialize how hard 

they are to do and how expensive, but given how 
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important the answers are, we ought to be more 

supportive of that kind of research rather than 

just make philosophical arguments about how we 

think people are going to operate. But finally, 

kudos with everyone else for the CRA rule, a 

monumental achievement and all of the accolades 

are well deserved.

MS. CAMPER: Great, thank you, and 

thank you for teeing up the issue of fraud and 

setting it in the context of LMI communities 

having less resilience and greater impact when 

fraud happens. 

In the banking industry, you're right. 

We're just seeing an explosion of everything from 

literally like blue post office theft with 

checks, right, the very sort of most mechanical 

kind of fraud, to extremely high-tech fraud that, 

you know, I think we're all dealing with in the 

cyber area. And so, we are spending a lot of 

time trying to figure out solutions to that, and 

our solutions range from the very sort of low-
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tech to much more sophisticated, so let me start 

with the low-tech. 

One of the things that we've heard 

from customers is when they do have check fraud 

happen to them, and it could be that they put 

literally the check in the mail and somebody 

check washes it, how hard it is for them to get 

provisional credit from their institutions, and 

part of what's happening is that there's lack of 

communication between the financial institutions 

that are the receiving and originating.

We've put something incredibly 

simple, I'm almost embarrassed to say how simple 

it is, into place, where banks opt into our check 

fraud directory. We've created templates for the 

information that's required and it literally just 

tells Bank A who's the contact at Bank B, and 

then we have some time standards, and reports are 

that this has cleared up and sped up the 

processing and remedy incredibly, so something as 

simple as making sure you have the right contact 
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information for the right person at Bank A and 

Bank B.

And so, we have, just in the first few 

weeks of this, we had well over 1,500 banks opt 

in, and we know there are only 4,700 banks, so 

we're quickly reaching scale on something that is 

very low-tech and very effective, and so we hope 

that that is going to bear fruit for customers 

who experience fraud.

We also, and this is what Raphael was 

responding to, part two, we have relaunched ABA's 

Banks Never Ask That campaign, and this is really 

trying to get direct to consumers to be aware of 

all of these phishing scams and phone scams. Your 

bank will never ask you this question. They will 

never ask you for your password. They will never 

ask you for your account number, all of these 

things that, mom, are you listening? Banks will 

never ask you that.

So, we have relaunched it. It uses a 

lot of humor. It is now bilingual. For the first 
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time ever, we have the resources in Spanish and 

in English. It is completely free. Anybody who 

wants to use it can white label it. They can put 

their name on it. It's all open source.

And so, what we've found is because it 

uses humor and it uses some fun visuals that it's 

really -- people are responding to it, and so we 

hope that that starts to break through so that 

people just don't fall prey to these horrible 

schemes.

The final thing in the fraud bucket 

that I want to spotlight is ABA has, for many 

years, created a role for ourselves in bringing 

different people together to combat elder 

financial exploitation, and that continues. You 

know, my personal opinion is if there is a hell, 

people who exploit elder adults belong there.

So, we are putting together an elder 

financial exploitation summit for the spring, and 

that's something where we are happy to partner 

with anybody who can gain the trust of the 
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community that's at greatest risk.

Speaking of gaining trust, I think the 

banking industry understands that establishing 

trust is key and we continue to work in that in 

many ways. We have really spent a lot of time 

with developing a DE&I function to help our banks 

make sure that they are reflective of the 

communities they serve.

We are also trying to do a better job 

coordinating with our own members who are CDFIs 

and MDIs, and there are dedicated trade 

associations, the National Bankers Association, 

the Community Development Bankers Association, 

who is in the room, hello, and so, ABA, we were 

lucky enough, some of you met him last night, to 

hire a vice president whose entire job it is to 

focus on the needs of CDFI and MDI members, 

working in close coordination and partnership 

with those trade associations. So, that's 

something. 

We've had our second MDI summit. 
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There's obviously so much opportunity with the 

ECIP money and other things out there, so that's 

a great focus of ours, to make sure that the 

entire banking industry is learning from peers 

who have really cracked the code for establishing 

trust in communities.

The last thing I want to talk about is 

just, it's not the purview of this committee, but 

just an awareness level for what banks are 

worried about, and it rolls out to how they serve 

communities. One is you've heard me talk ad 

nauseam, because I just can't stop, about ABA's 

commitment to Bank On accounts and making sure 

that banks are offering bank accounts, banks are 

offering accounts that meet the Bank On national 

standards.

And one of the things that I've 

emphasized is the reason we've been so successful 

in getting banks to adopt those accounts is 

because the way that the standards were so 

brilliantly developed allows for a small monthly 
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fee and other revenue-generating activities that 

even if the accounts are not highly lucrative, 

they are sustainable in the sense that they're 

not money losers.

Just for situational awareness, the 

Federal Reserve just proposed a rule on Reg I(I), 

which would cut, proposes close to a 30 percent 

cut in debit interchange revenue. Debit 

interchange for many banks accounts to 30, 40 

percent of the revenue that powers their Bank On 

accounts, so just an awareness that that is going 

to be factored into the economics of these 

accounts. 

Obviously, it's very encouraging that 

the CRA rule is going to have incentives to offer 

some of these accounts. The financial economics 

may change once this rule is finalized, so just 

an awareness of that.

And then just finally, 

congratulations on issuing a 1,500-page rule. 

That's fantastic. I'm sure there's lots to read. 
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It can be overwhelming for banks that, you know, 

don't have lots of staff, so we look forward to 

getting more guidance and helping educate the 

banks, but just recognizing that that's just one 

rule among so many others that the regulators 

have put forward, and being aware that banks are 

people too and they are, you know, up late at 

night worried about how to get things right so 

that we can help all communities, but I'll stop 

there, and thank you. Over to you, Ken.

MR. KELLY: Good afternoon. Thank you 

again, Chairman Gruenberg, for your leadership 

and inviting us to the table. This is a friendly 

reminder that I'm in a room where I'm not the 

smartest person in the room. Great to be with my 

peers, and listening to them, and hearing the 

things, but I'm grounded back into what the 

mission of this agency is, and that's providing 

stability and public confidence in the financial 

system. 

Core to the mission was being talked 
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about, and trust, and so your leadership during 

this last financial turbulence back in March, it 

shouldn't be left on us that that wasn't a lot 

about inclusion, because we know anytime there is 

turbulence or a crisis, people of color typically 

suffer the most, so, again, I want to thank you 

for your leadership in containing the instance 

that took place back in March.

Montrice mentioned that her 

director's statement was to protect and connect, 

and I'm going to describe some things that we've 

been a part of, associated with, protecting and 

connecting. Acting Comptroller Hsu mentioned 

this morning that momentum has a tendency to fade 

over time regarding the need for change.

His comment was reflective of George 

Floyd's murder and what we can attest to at the 

bank level, the partnership level, and the 

industry level, and some things I'm going to 

share in just a moment that hopefully that's not 

fading, and hopefully it inspires all of us to 
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leave here with the charge of making a difference 

where we have influence, so at the bank level 

again, partnership level, and industry level.

We have implemented a cross-section of 

lending products to hit the automotive, as you 

heard me probably drill into Jessica earlier 

about that because that's an area that we 

certainly need to have inclusion. 

Secondly, I want to highlight we've 

had a Fortune 150 company to join us in our 

efforts in creating a loan guarantee program to 

support BIPOC communities in the Minneapolis 

market. We've been able to make our first loan 

there that this person did not qualify for, and 

that's a Fortune 150 company who came to help 

support making that happen.

As it relates to the Durbin Marshall 

opportunity around interchange, I want to talk 

about this because I would say directly related 

and/or indirectly related to George Floyd's 

murder, some positive things have happened. We 
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have a Mentor Bank prior to George Floyd's 

murder, and U.S. Bank, and with that 

relationship, we've been able to work with them, 

with a $6 billion-plus healthcare agency in 

generating income for our institution.

That was something that probably 

wouldn't have been thought about, you know, I 

would say years ago, but that's part of merchant 

services and it's given us an opportunity to 

participate in the financial system in a 

different way as an institution.

Secondly, I'd like to highlight, 

again, thank you, Chairman, for having us earlier 

last month to talk about the relationship with 

Bank of America and the National Football League. 

We shared that with that subcommittee and talked 

about the things that have been made possible 

there.

And my point is I'm creating 

opportunities for the peer members here to think 

about what are some of those opportunities in the 
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spheres that you participate in? That was a 

relationship with Bank of America, and now we 

have an association with the National Football 

League, which has also created some opportunities 

with some of the franchises, so I want to thank 

you again for that spotlight last month here with 

that particular subcommittee.

It's not short on me that if you go 

back to what took place with our institution in 

2022, we were able to expand into the Minneapolis 

market because banks in that market said we are 

going to do something different as it relates to 

the murder of George Floyd, and so we got invited 

by Bank of America, Bremer Bank, Huntington Bank, 

Wells Fargo, and U.S. Bank to look at 

establishing the first, or at this time the only, 

African American owned and controlled bank in the 

Minneapolis market.

I talk about that because it was not 

about just us getting there, because I can tell 

you that, yes, we are short on some of our 
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business goals as it relates to moving into that 

market, but some of the intangibles I want to 

talk about, I think, is extremely, extremely 

important.

One of them include an announcement 

that was made October 19 there in that market by 

Fox News, and this goes to something that you 

said just a moment ago, Mike, about products and 

how people have to trust people that they give 

their trust to, and let me read part of this, 

part of a newscast and article.

Next March, Summit Academy plans to 

begin a training program to help students break 

into a career in financial services. Quote, 

knowing that having somebody that you trust in 

financial services to go to when you have 

questions is a really big concern for the banking 

industry, in particular because they want to 

ensure that ultimately, the impact that they make 

on the community is having more people of color 

as homeowners, said Williams. 
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He's the leader of an organization 

called Summit Academy that does training in that 

market. They're going to stand up the first 

training program for people of color, and 

particularly also assisting African Americans in 

becoming mortgage lending officers.

So, those officers will have an 

opportunity to hopefully work at institutions 

like ours at First Independence, Bremer Bank, 

Bank of America, Huntington, Wells Fargo, along 

with U.S. Bank. I share that, again, because 

that's an opportunity where someone threw a 

pebble in the water and it's rippling across that 

industry.

Also, I need to make note of just this 

past week, GroundBreak, which is a multi-billiondollar investment expected in that community 

there where George Floyd was murdered, is related 

to philanthropy, corporate, and financial 

institutions focused on four areas, home 

ownership, entrepreneurship, commercial 
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development, along with rental housing.

One of the things that should be 

noted, going back to the public relationship 

there, is the Minnesota legislature actually has 

allowed for $175 million in state funding for 

first generation home buyers in Minnesota. So, 

my point is all of these things have a cumulative 

impact, and we have the obligation, opportunity, 

and responsibility to touch them where we can.

At the industry level, I'd like to 

talk about the ABA and MBA. I'm one of a few who 

have probably had the option of being a director 

of both of those organizations, and as my dear 

colleague just mentioned, we've had now the 

second summit, which the first one happened 

earlier this year, the first time ever that a 

minority banking association, along with the ABA, 

which has been in business 148 years, had a focus 

on minority depository institutions, and so I 

want to thank Rob Nichols, the board, and Naomi 

for their leadership there, again breaking 
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barriers one at a time.

I have to begin my conclusion with 

thinking about this mantra, which I think is very 

true and is very telling of the people that sit 

around this table. Culture creates policies, and 

policies determine economics. A clear example of 

that exists on the conversations around this 

table regarding inclusion. 

I think this agency is certainly one 

example of that. I would imagine to say if you 

go back two decades, we wouldn't be talking about 

inclusion at this table, but now we are. That's 

culture that's helping to shape changing policies 

like CRA, which is moving into economics. 

So, to the points that were made 

earlier during the early discussion, let's keep 

score on some of these changes, Liz, some of the 

things we're talking about. There should be a 

tally of these opportunities so people can know 

that while it's probably not at the macro level 

like our leader over the Federal Reserve, it 
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certainly is happening one piece at a time, and 

so I think all of us should continue to contribute 

to that.

So, my hopes long after each of our 

terms are long served here is that we will look 

back at 2023 and have the opportunity to say that 

we made a difference sitting at this table in 

hopefully reshaping the culture as we think about 

money in this country, because it should be, and 

it is really, the oxygen of a capitalistic 

society, and all people should have that 

opportunity to breathe. 

So, having said that, again, I want to 

conclude my comments by saying I'm grateful for 

being here with you and grateful for my peers 

here at this table, and hopefully we'll continue 

to make a big difference in our country. Thank 

you.

MS. ORTIZ: Okay, Margaret?

MS. LIBBY: Thank you. Okay, hard act 

to follow. So, I will say I think in starting 
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off my comments, which I will observe the time 

limit. I've noted my start time, Liz. I know 

I've gotten in trouble --

(Laughter.)

MS. LIBBY: -- that I wanted to share 

a little bit about -- you know, I think my 

comments today are going to focus more on 18 to 

24-year-olds. I'm often talking about young

people, but that sort of transitional age group

rather than the under 18 population, which I'm

sometimes talking about.

But we have been focusing a little bit 

more there and I think one of the things that I 

wanted to share, we've been doing this guaranteed 

income project with 18 to 24-year-olds who are 

Black identified and living in low-income 

communities within San Francisco and Oakland, and 

we've just gotten back some of the baseline data 

from this project where they're also being 

offered optional financial mentoring, so like a 

one-on-one engagement.
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One quick sidebar there, as we look to 

source financial mentors and, you know, looking 

to find Black financial mentors so that we have 

that connection for the young people in the 

project, not easy to find, and so I think that's 

one of the things that we're looking at and I 

think is a great opportunity for partnerships is 

how do you build a pipeline of, and not just Black 

financial mentors, but also Black and brown, so 

that young people who are in this transitional 

period of life really can engage one-on-one 

around debt, around credit, around banking 

access, but with somebody who has a similar set 

of experiences that I think really changes the 

kinds of outcomes that can happen through a oneon-one financial mentoring relationship.

But one of the things that I wanted to 

share about this baseline data that we've just 

sort of looked at is that of the 300 young people 

in this pilot, just under 50 percent of them 

reported either severe anxiety or anxiety in 
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general, experiencing that on a regular basis in 

the last six months, and I think it's something 

that we hear a lot about, the sort of mental 

health challenges that this generation is 

experiencing.

And I think there are a number of 

reasons for that, but I think it's something to 

consider in looking at how we do the financial 

and economic inclusion work. And so, I think 

this idea of how to incorporate trauma-informed 

practices is really important because there is so 

much that young people are experiencing in this 

generation.

I think the other thing that was 

really striking, and this touches on something, 

Brandee, that you were sharing about last 

meeting, is that 90 percent of them were talking 

about food insecurity, that they had experienced 

food insecurity in the last three months, and so, 

you know, when you think of 90 percent, that's 

essentially all of these young people worrying 
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about food.

And so, I think, you know, certainly 

the guaranteed income is a help. It's $500 a 

month. It's 12 months, and so I think it's 

something, you know, as we think about this and 

engage with our internal youth leaders looking at 

strategies that go beyond just income supports, 

while they're vital, to make sure that people can 

take care of their basic needs, housing, food, 

and so on, I think that really looking at wealth 

building products.

So, I know with the strategic plan, 

there's sort of a shift away from thinking just 

about products, but I really do think that inside 

the focus areas and the way that outcomes are 

being defined, I think thinking about different 

ways of supporting wealth building and really 

thinking about what an on ramp to that needs to 

look like so that young people in this transition 

can really have the kinds of investments that 

they need to take or make the strides in their 
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education, lives, and goals, and also employment 

that will make a difference in their lives, the 

lives of the families that they'll have.

I think there's been so much back 

sliding for this population, the young people, in 

the pandemic economy. There's a lot of data to 

support that. I think I shared some of that last 

meeting, but it's, I think, just important in the 

context of the conversation about products to 

think about what that kind of investment can look 

like.

The other issue that has come up in 

the baseline data is around credit and debt, and, 

you know, the amount of debt that some of our 

participants are carrying is pretty significant 

for people of this age, right, but I think for 

those that have been able to access credit cards, 

they're carrying a fair amount of debt there. 

There is some student loan debt, but then for a 

number of them too, they're credit invisible and 

have a lot of questions about credit. 
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So, I think where the strategic plan 

focus around credit is showing up, I think, is 

just incredibly important for young people as 

they're starting out to really learn what it is, 

how to use it, and I think that importance of 

having a one-on-one relationship with somebody 

that you trust to really help you understand that 

and take those steps, I think, is really vital.

The last thing that I'll share, which 

I think sort of also was exciting to see how up 

in the plan was just the importance around multisector partnerships to really, I think, provide 

the comprehensive kinds of supports that young 

people need, and especially opportunity youth who 

are, you know, growing up in low-income 

communities.

And so, I think one of the things that 

we are embarking on is a partnership with the 

largest opportunity youth program or organization 

network in the country that's reaching many of 

the six million opportunities in the country, and 
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they're expressing a new interest in financial 

capability, which is exciting. There is some 

support for this group to engage in this kind of 

work. 

So, I think whether it's networks like 

that or a lot of the guaranteed income projects 

that are springing up all over the country, I 

think there are a lot of places where banks are 

needed in order to really make sure that as young 

people, in that case of the Aspen Network, who 

are starting to take a step toward banking, 

building their credit, looking at, you know, some

of these other financial capability and wealth 

building issues, that there are partnership 

opportunities there, but I think also with the 

guaranteed income projects as people are 

contemplating things like saving and credit 

building as they have a little bit more 

disposable income.

And I think the final thing that I 

wanted to mention in perhaps my final 30 seconds 
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is ChexSystems as something that is a barrier for 

this age group. And I know the Credit Builders 

Alliance has a platform that enables providers to 

really look inside what used to be, you know, 

sort of an impossible thing to look into, to see 

what kinds of reasons somebody is in ChexSystems 

and unable to open their first account.

And I think that platform and that 

newer opportunity, it's just in the last, you 

know, handful of years, I think is hugely 

important because what we've seen with young 

people is that once they're in, once they have a 

bad experience, it's very discouraging. It's 

sort of, yeah, it's the trust that we've been

talking about. 

I think they're much more likely to 

just stay out of banking, and so I think that 

platform which enables people to understand why 

they're there and start to build a pathway out, 

I think, is vital. And I will pause there, but 

just I really appreciate the strategic plan, and 
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the focus there, and especially around focusing 

on folks with an equity lens that have been having 

a harder time engaging with the banking sector, 

yes.

MS. ORTIZ: Okay, Brandee?

MS. McHALE: Yeah, I'm going to talk 

a little bit about banks and the racial wealth 

gap and pick up these two serious headwinds that 

we have, which is what we heard starting this 

morning, and Kenneth, you just sparked my memory. 

Memories fade, but we also have another really 

challenging headwind, which is that the efforts 

to be very intentional about addressing the 

racial wealth gap have now been pulled into the 

debate and fight against being intentional on the 

whole range of diversity, equity, and inclusion 

issues.

So, you know, I think that that, those 

two factors, just we have to be aware that that's 

the environment within which we're trying to do 

this work and, you know, I can't believe that 
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it's been three years. You know, the institution 

I represent, we are coming to the end in 30 days 

technically of the three-year billion dollar-plus 

commitment we made to help address the racial 

wealth gap.

And as we, you know, look back, I can 

say yes, we did all of the things that we said 

that we would do. We had them verified. We did 

a racial equity audit. And if asked the question, 

have we made an impact, when I think about the 

specific outcome metrics themselves, I would say 

well, we did a lot of things, but we haven't 

necessarily made an impact because this has to be 

a long-term play and we have to be in it on a 

long-term sustainable basis.

So, our point of view on this is that 

we are just getting started. Our work is not 

done in this space, and we're going to continue 

forward even in the face of incredible 

uncertainty and actually some fear about what 

that might bring to our doorstep, but even more 
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fear about what it will bring to our doorstep if 

we don't continue to do this.

But I want to be optimistic when I 

answer the impact question, and so what I wanted 

to just share today very quickly, I'll just take 

one moment, is that I want to encourage us to 

think about impact, and maybe this is some 

guidance also for the FDIC's strategic plan, the 

I in impact having three things that we 

continuously measure.

Innovation, are we doing things 

differently to try to address longstanding 

challenges? Are we integrating these efforts 

into the core business and not just thinking of 

this as a vertical, as a set of social impact 

initiatives, but is this actually integrated into 

the business and an economic imperative?

And then the other is influence. Are 

we continuing to stand up and influence others? 

But actually, I think for the financial 

institutions, it's are we willing to be 
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influenced ourselves?

So, if I look at those three Is as 

have we made an impact, I would say yeah, well, 

there's definitely an impact there and we are on 

a journey, and so as we -- and we've done lots of 

-- have been very transparent, have lots of 

reporting. We are about to -- this is a little 

sneak peek. 

We are about to do a wrap-up of where 

we've been to date and then double down on that 

commitment specifically to do three things, which 

is to continue to deepen this model of business 

integration. It has been a privilege from the 

perch where I sit to be able to help lead this 

work at the institution. 

It should not be led by the person 

with the title of head of community investing and 

development. It should be led by the business. 

So, we'll continue to integrate it into the 

business and build up specialized business units 

that focus on this work.
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We will though -- there is a role for 

community investing to support innovation. We 

will continue that, and continue the commitment 

to collaboration and learning, both learning 

ourselves, sharing with others.

And then the fourth piece, which we 

really shouldn't forget, and I think has been 

very different about this work in the financial 

sector, has been a commitment to public reporting 

and being transparent about what we're doing and 

what we're learning. So, I know we are short on 

time, but more to come. 

MS. ORTIZ: Thanks, Brandee.

MR. MINTZ: Like lightning, like 

lightning. We also spent ten hours of frivolity 

at the CFE Fund. For us, the ten hours was after 

the proposed rules came out, and we spent much of 

those ten hours pinching ourselves to believe 

that the innovations in that Reg were true.

And I just, can just try to chip away 

at my level of gratitude and respect for the 
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partnership and the way that it's evolved really 

on a long-term basis to your point about like 

taking a long view of this work. This work goes 

way back. It goes way back to an FDIC pilot, you 

know, before Bank On that, you know, I was but a 

child at the time.

(Laughter.)

MR. MINTZ: And I think that I want 

to just say a couple of things. One is that, 

Chairman, you and your superstar team's 

commitment to banking inclusion and to such a 

powerful focus around entry products, I think, 

not only is in and of itself important, 

obviously, but I think it recognizes that so much 

of the rest of financial stability requires 

realistic first steps.

And there are lots of us doing work 

around first steps like Margaret and her team, 

and many others here, but I think that entry 

level, safe, insured accounts, you know, are just 

proving again and again to be appealing, to be 
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addressing people's concerns. Trust issues were 

very much part of the focus around how we thought 

about this, and seeing this new watershed level 

of support from the FDIC and the other banking 

regulators around offering such intentional 

carrots to the financial services industry is 

amazing.

So, when we were done pinching 

ourselves, we got to work trying to figure out, 

while lighting candles, I don't know what that 

means really, I'm a Jew, but, you know, lighting 

candles to make sure that the rule came out as it 

basically would, and also really trying to figure 

out how to make the most of this upcoming set of 

carrots.

I will say a couple of things. I mean, 

of course, we appreciate the presentation that 

came earlier. It's going to make our job easier 

pushing out awareness to our 100-plus coalitions 

around the country so that they're aware of and 

can engage more of the financial institutions in 
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their communities who don't yet have a certified 

product, to bring even more of them in.

I also just want to throw out a couple 

of numbers that I think are helpful, that I 

appreciate David Rothstein on our team put 

together for us, that I think you might find 

interesting, and for us is kind of our hit list, 

which is an expression I shouldn't use, but -- so 

of the banks that are $10 billion and above that 

are consumer facing, we think there are 109, 70 

of them have certified accounts so far. That's 

64 percent. That's exciting and that's a lot, 

and many, many, many, many thanks to the ABA and 

others who have done such a great job of helping

move that forward. 

Of those that are in the $2-$10 

billion range, our calculation is there are 322 

consumer facing banks. We have 96 of them that 

are offering certified accounts so far. That's 

about 30 percent, not bad, but they're on our 

list.
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And then of those in the $600 million 

to $2 billion, you know, we've got a lot more 

progress to make there, and I believe strongly 

that this gives -- it's not just that it gives us 

an opportunity. I think it gives these financial 

institutions an opportunity to be clear about 

what is valued by the community and by multiple 

sectors of the community, and by now in very, 

very clear terms, very clear terms, their 

regulators, and I think offering them the 

reliability of what kind of product meets those 

expectations, and we want to take advantage of 

our ability to offer them that gift.

So far, we have overall, by the way, 

just a quick update, we have 425 certified 

accounts representing over half the market. 

Another 30 are certified, but not yet publicly 

available, and then we've got dozens that we're 

in talks with.

The last thing I want to say as part 

of my lightning quick update is something that 
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came up in the earlier panel around the Bank On 

National Data Hub partnership that we have with 

the St. Louis Federal Reserve. From the 

beginning, the idea of generating the kind of 

apples to apples data that our banks are 

reporting into the BON Hub was in part so that 

they could look at and say wow, these accounts 

are doing great, but also in part so that they 

could turn around and hand them to their 

examiners. 

And so, we look forward to, among many 

facets of our partnership with the FDIC and 

others, making sure that those bond hub 

structures facilitate banks getting the carrots 

that they deserve with these accounts. Thank 

you. 

MS. ORTIZ: Thanks, John. All right, 

Susan?

MS. WEINSTOCK: Okay, I'm jumping 

right in. I know I'm standing between everybody 

and a break. So, I want to start with the 
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opportunities that -- first of all, let me just 

say we see the bank regulators, like, of course, 

the FDIC, as integral to financial inclusion.

We so value the FDIC data that 

examines the unbanked and the underbanked. It's 

critical. The data and reports that you publish 

and the detail you provide is critical to those 

of us who advocate for more policies to promote 

financial inclusion by providing the solid 

information that we use as foundational to our 

efforts.

We think the FDIC should be very proud 

of the new CRA rules. We also see this as an 

opportunity. We have praised the release of the 

modernized CRA, you know, and we still find 

deeply disinvested communities from Detroit to 

the Mississippi Delta, and we believe the new CRA 

is a great start to ensure that no community is 

left behind and we can better respond to ways 

that both banking and community development needs 

have evolved.
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However, we do think the CRA falls 

short by only targeting lower income communities 

without recognizing race, yet we cannot resolve 

racial injustices by addressing just economic 

injustice alone.

Finally, we see many aspects of our 

program, America Saves, as an opportunity. We 

support individuals and families known as savers 

on their savings' journey directly through email, 

and text messages, and social media marketing, 

and additional educational opportunities like our 

Think Like A Saver podcast, town halls, and 

workshops.

Our 2024 -- we have an annual week 

that we really take this campaign to the next 

level. In 2024, it's going to be during --

America Saves Week will be during National 

Financial Capability Month, which is April 8 to 

12, and then we're going to have Military Saves 

Week, which is from April 15 to 19, with the theme 

of saving for what matters most.
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Now I'd like to raise some specific 

products that are of concern to us and that we 

think challenge inclusion. First, I have to talk 

about Buy Now, Pay Later. It seems to have many 

financial regulators' attention.

Interesting, the Financial Times had 

a piece about this just the other day. In 

Australia, the government announced in May that 

it would bring the products under consumer credit 

regulation. 

In the UK, the Financial Conduct 

Authority has been studying this product, and 

they found that consumers who have used Buy Now, 

Pay Later products more than ten times in the 

past year were four times more likely to have 

missed paying a bill in three of the past six 

months, and they found that the growth in the 

product, usage of the product in the UK has really 

grown enormously.

Last month, CFA, along with our 

friends at the Center for Responsible Lending, 
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published a report about Buy Now, Pay Later in 

California, since that state has taken the lead, 

by requiring that major BNPL providers obtain 

state lending licenses and abide by state lending 

laws.

Key findings from our survey 

respondents who have used BNPL, 37 percent of 

them had incurred an overdraft fee in the last 

six months, 16 percent had been charged a late or 

rescheduling fee or other related fee by the BNPL 

provider or their bank within the past six 

months. Those with lower incomes were more 

likely than those with higher incomes to report 

using Buy Now, Pay Later credit because the 

purchase would not otherwise fit into their 

budget, and consumer understanding about how Buy 

Now, Pay Later functions and is regulated was 

very low.

The report emphasizes the necessity 

for enhanced regulatory frameworks to ensure the 

consumer protections, transparency in agreement 
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terms, and the establishment of standard 

practices for late payments and dispute 

resolutions.

We also continue to highly be 

concerned about overdraft as it hinders inclusion 

and may drive many vulnerable customers out of 

the banking system, and that's where we lose a 

lot of the trust that we were talking about 

earlier today. Reforming these practices is key.

I want to address a few additional 

challenges. We continue to be concerned about 

insurance providers' use of credit scores in 

determining auto insurance rates, which magnifies 

the barriers to insurance, and it particularly 

hurts those who are low income and communities of 

color who tend to have lower credit scores.

And as, from our -- we did a report 

over the summer. We published a report on this 

and we find no relationship between your credit 

score and your driving ability, and yet your 

rates certainly don't show -- show the opposite. 
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You can have a really perfect driving record and 

a terrible credit score, and you will pay more 

for auto insurance than somebody who has a 

terrible driving record and a perfect credit 

score. It makes no sense.

We'd also like to see banks address 

their Know Your Customer policies. Many banks 

use sort of a one-size-fits-all standard for 

approving bank account applications, and this 

creates a hurdle and financial incentive for 

banks to shy away from giving accounts to low 

dollar and low document households.

Traditionally, these systems created 

a flag on accounts without full documentation, 

and many banks have this profit mode of not to 

fully investigate unless they have integrated ID 

tech. They may have to spend $50 to $100 manually 

to verify what ultimately would be a low dollar 

account.

There's good reason to be cautious 

about opening the floodgates to bank accounts, 
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totally understand that. We know that money 

laundering, obviously, hurts people, but there's 

also reasons to encourage banks to look more 

deeply at using tech to make the process more 

nuanced in a place where there is some 

possibility the tech would help the situation. 

So, we'd like to see regulators continue to press 

banks to develop nuanced Know Your Customer and 

customer identification programs that will 

approve more under documented applicants.

So, I just wanted to thank you again. 

It's a pleasure to be with this esteemed group 

and I so appreciate being a part of it. 

MS. ORTIZ: Thank you so much, Susan. 

Thank you, everybody, for an inspiring panel. 

Okay, I think that you all deserve a break. I'm 

thinking if you can commit to coming back at 2:50? 

So, don't be like my daughter and ask for, you 

know, something extra, 2:50, all right? That's 

the time and I'm sticking to it.

But in all seriousness, this really -
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- when I listen to all of you, I know you inspire

me. I hope you inspire folks that are listening

not only to experiment, and take chances, and do

things on a micro level, and show what is

possible, but also, as we said earlier, maybe

take some bigger swings when you see the chance

to do that, because probably some bigger swings

are needed to address some of the longstanding

challenges that we heard people speak about at

the first part of the roundtable. Thank you

again, and I'll see you at 2:50.

(Whereupon, the above-entitled matter 

went off the record at 2:39 p.m. and resumed at 

2:51 p.m.)

MS. ORTIZ: All right. Welcome back, 

everybody. Thank you very much. We are ready 

for our last panel of the day. But first let me 

welcome Vice Chairman Travis Hill to the meeting. 

Welcome, Travis.

David Friedman is our moderator for 

the panel on small dollar loans, today's finale. 
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No pressure.

MR. FRIEDMAN: Thanks very much, Liz, 

and glad to be here today and happy to be kicking 

off the last panel of the day on responsible bank 

small dollar lending.

This is another topic in which the 

FDIC has had a longstanding interest. And, in 

fact, small dollar lending was the focus of the 

inaugural meeting of the FDIC's Advisory 

Committee on Economic Inclusion back in 2007.

So responsibly offered small dollar 

loans can play an important role in helping 

customers meet their ongoing needs for credit due 

to cash flow imbalances, unexpected expenses or 

income shortfalls. And well-designed small 

dollar lending programs may also help to 

facilitate a customer's ability to demonstrate 

positive credit behavior and be able to access 

additional financial products.

We believe that banks are well suited 

to offer responsible small dollar loan products 
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and doing so can support broader efforts around 

economic inclusion.

Back in 2008, the FDIC launched a 

pilot program designed to illustrate how banks 

can profitably offer affordable small dollar loan 

products. And we subsequently released a report 

highlighting lessons learned.

A key finding was that most of the 

pilot bankers used their small dollar loan 

products as a cornerstone for building or 

retaining long-term banking relationships.

At the same time, one of the 

challenges that was identified was the cost 

associated with high touch models of small dollar 

lending. And the pilot flagged the potential for 

future development in emerging technologies and 

delivery channels to help reduce the cost and 

improve performance.

More recently back in 2020, the FDIC, 

along with the Federal Reserve, the OCC, and the 

NCUA issued inter-agency lending principles for 
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offering responsible small dollar loans. The 

principles highlighted key characteristics of 

responsible small dollar loans, including around 

affordability and appropriate underwriting that 

considers ability to repay, repayment terms, 

pricing and safeguards that minimize adverse 

customer outcomes, including around cycles of 

debt due to rollovers and re-borrowing and 

repayment outcomes in program structures that 

enhance a borrower's financial capabilities.

So while this has been an area that 

has been challenging in terms of economic 

inclusion, and we certainly heard a little bit 

about that this morning, there have also been a 

number of significant developments since that 

inaugural ComE-IN meeting and since the FDIC 

pilot and even since the interagency statement a 

few years ago from the increased use of digital 

and mobile banking to the proliferation of 

automated tools that may make it easier for banks 

to analyze account transaction data.
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So we hope that today's panel will 

provide an overview of the current bank small 

dollar lending marketplace and highlight some 

promising approaches that we hope can help to 

inform other institutions considering 

opportunities in the space.

So we are joined today by Alex 

Horowitz, Project Director of the Housing Policy 

Initiative at The Pew Charitable Trust, Chuck 

Bevan, who is a product management executive at 

Bank of America, Tiffany Pack, who is the Product 

Group Manager of Standby Cash at Huntington 

National Bank and Melanie Stern, who is Vice 

President, Community Reinvestment Act Officer and 

Director of Community Lending at Spring Bank.

So each panelist is going to provide 

a short presentation and then we will have some 

brief discussion before opening it up to 

questions. So I will turn it over to Alex to 

kick things off.

MR. STERN: All right. Thank you, 
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David. And thank you, Committee, to the FDIC, 

for having me here. So I'm going to talk about 

bank small dollar loans. I'm not going to talk 

about housing policy despite the title. I'm 

still working on small loans, consumer finance.

So 2022, consumers spent over $20 

billion in fees and interest alone on high cost 

non-depository credit, payday loans, title loans, 

pawn, rent-to-own, high cost installments. This 

is not principal. It's just fees and interest. 

I share this to talk about the scale of the 

problem and the magnitude of what's going on and 

the potential to reach people who need the most 

help.

This excludes late fees. It excludes 

overdraft fees, which also can be avoided 

sometimes with bank small dollar credit. But I 

wanted to put this out here for kind of not the 

total addressable market, but certainly an 

important piece of it because people are spending 

money to access small amounts of liquidity, but 
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doing it largely outside the banking system.

I also share this because these are 

bank customers. These are checking account 

customers. Every payday loan borrower by 

definition is banked, has a checking account, 

because that secures the loan. But 

overwhelmingly people who use these other kinds 

of credit also have a checking account down to 4-

1/2 percent of households being unbanked, that 

means that people who use these loans, in part 

from the FDIC survey data, but also from 

administrative data, we can see these are 

overwhelmingly the underbanked and not unbanked 

folks. It makes it a lot easier to reach them 

than when they are not in the banking system at 

all.

So six of the largest eight banks, 

using branch account here, not deposits, are 

offering affordable small loans. The reasons 

that I put these six up here is because there 

have been terrific programs. David mentioned the 
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pilot that the FDIC did. Other program out there 

including those from CDFIs.

But this is real potential for scale. 

These six banks operate 23 percent of all bank 

branches in the U.S., and the share of 

underbanked Americans obviously is large. And to 

make a real dent and address the need for 

liquidity, it's going to require scale. So that 

means mass market solutions, and that's going to 

include larger providers. So I will focus on 

these six bank's products primarily today, but I 

will also cover some of the rest of the market.

Costs for bank small dollar loans are 

clocking in at 15 times lower or less compared to 

a typical payday loan. So borrowing $400 for 

three months at 15 percent per pay period, we're 

talking about $60 every two week so $360 in fees 

alone for that credit, $400 for three months. 

Our researchers found a typical borrower is 

indebted for five months of the year.

So how do the bank small dollar loans 
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compare? Versus $360 in fees, we're talking 

about $24 or less, an enormous difference. And 

remember, this is only for three months. Most 

people are using loans for longer than that.

So this alone is big cost savings, but 

I share this as a reference point because we often 

can fall back on APR or end up comparing these 

small loans to credit cards or other prime 

financial products or near prime financial 

products. But this is a more accurate reference 

point in terms of what people's other options are 

and what their alternatives are. That's why I 

compare this to a non-banked product that offers 

a similar amount of liquidity for a similar 

amount of time.

And although payday loans are sort of 

the most obvious reference point, that black 

refrigerator on the screen is a very kind of basic 

refrigerator, a price tag of $446 at a main stream 

retailer.

The same model available from a rent-
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to-own chain, $1,624 for the exact same model 

refrigerator versus $446. Rent-to-own typically 

is a markup of 3-1/2 to 4x by the time it is paid 

off. So --

MR. CALHOUN: If I can add, having 

spent over a decade of my life looking at these, 

more often than not that's a huge refrigerator 

because they repo them so fast and resell them at 

the same price.

MR. HOROWITZ: Thank you, Mike. So 

comparing that alone to purchase that 

refrigerator at a mainstream retailer, using the 

pricing that's coming out from banks, we're 

talking about $41 or less to borrow that $446 for 

five months. From a rent-to-own provider, the 

financing compared to that $41, $1,978 if we're 

thinking about the purchase price being the same 

at a rent-to-own store versus a mainstream 

retailer.

So the opportunity here is much bigger 

than just kind of liquidity lending. And small 
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loans from banks can service purchase money loans 

and enable consumers to access lower prices for 

a laptop, for a refrigerator and be able to shop 

at a mainstream retailer that has much lower 

prices than a rent-to-own provider, and rent-toowns in every state.

So we mostly think about consumer 

well-being, right? So affordability, price, the 

safeguards on a product, but we see the consumers 

in financial distress -- and we've done over 20 

focus groups with them -- focus on speed. How 

fast can I get the money? Ease of access, is 

this easy? Is it complicated? Is there a lot of 

paperwork? Certainty of approval, is this a sure 

thing?

So for a product to be successful, it 

needs to meet consumers where they are, speed, 

ease of access, certainty of approval. To 

improve their financial well-being, 

affordability. How big is the payment? Does it 

fit into my budget? Price, how much does it cost? 
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What are the safeguards?

So the products that are from banks 

are meeting consumers where they area. That's 

why they are doing well. They are very, very 

fast, much faster than any non-bank lender.

They are easy to access. And if you 

can see it, you are very likely to be approved 

because banks are showing these products to 

customers who are likely to qualify for them.

These are the six products from the 

six large banks. I won't review all the details. 

Three are open end. Three are closed end. Four 

of the six have a loan size of $500 or smaller. 

Five of the six have a term of three or four 

months. You can see the pricing in the righthand column. But it is low. All of these are at 

least 15x lower than the payday loan pricing I 

showed you on the slide before.

So if payday loan borrowers have not 

been going to banks, this is a survey we did with 

payday loan borrowers before banks were offering 
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these products and said, would you switch if your 

bank or credit union offered this loan? Eightyone percent said they would. They would borrow 

there instead.

We told them projected pricing. And 

we had projected pricing that was somewhat higher 

than what has come out. And when we told them 

projected pricing that number went up from 81 to 

90 percent.

So there is interest. There is uptake

is people can qualify for these loans. If their 

depository institution offers it, they would like 

to get it. That means the place where they have 

a checking account, not going somewhere else.

So borrowers used the bank's small 

loans. We did some open-ended questions with 

them in that survey. What would it say to you 

about your bank if they started offering small 

loans? It would say that my bank cares about me 

more than a payday lender. They care about their 

customers and are reasonable. I would think that 
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they were interested in helping people who are 

going through hard times. That would be awesome. 

I would stop going to payday lenders.

There is real interest here. People 

aren't using expensive loans because they are 

happy to be using expensive loans. They are using 

expensive loans because they haven't had options 

to better ones.

The public is there. This is not just 

about borrowers. The public is there, too. We 

surveyed a representative sample of Americans 

earlier this year, asked about a $500 three month 

loan for $30. These six banks are all clocking 

in at that number or lower on the price. Eightytwo percent of the public viewed it as fair. Just 

18 percent viewed it as unfair. And separately 

what's your view of the bank offering this loan? 

How does the bank offering this loan change your 

view if at all?

Fifty-five percent were positive, 

thirty-seven percent unchanged, seven percent 
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were negative. So not just the product itself, 

but what does it say about an institution if it 

offers a loan like this? Pretty good results.

The joint guidance is working. So the 

2020 guidance that David referenced from the 

FDIC, OCC, Fed, and NCU is working well. It's 

helpful because it's clear, short. It is stable. 

And there hasn't been this level of regulatory 

certainty and comfort with where things are prior 

to really this guidance being out.

And we've heard from executives, trade 

associations, and vendors. We got a lot of 

questions about the guidance when it came out. 

Did it seem like it was stable? We recognized 

the career staff played a major role in creating 

this guidance. And it hasn't changed in three 

and a half years. And it is fueling growth in 

this market. We anticipate seeing several other 

top 25 banks join this market over into the next 

year. And as more banks come in, more consumers 

who have not had a good option before are gaining 
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access to affordable credit. That's a big deal.

To wrap up, to save millions of 

consumers billions of dollars while we think 

about issues like affordability and pricing a 

lot, and that is what helps people have better 

lives, what they are thinking about and focused 

on when they are in financial distress and facing 

car repossession, utility disconnection, 

eviction, is speed, access, and certainty of 

approval. Only products that meet those needs 

can compete because offering a lower price is not 

enough. Offering affordable payments is not 

enough. Offering consumer safeguards is not 

enough.

It has to meet consumers where they 

are and that is going to mean a digital first 

product. It is going to mean a very high degree 

of automation. And depository institutions can 

absolutely perform non-depositories on all three 

of these. And they are, the ones that have these 

products out, because they already know these 
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customers and have a much simpler process to get 

a loan. And customers don't have to travel to do 

it. And this is available 24/7.

Maximizing scale is what's most 

important here. Reaching consumers who will 

benefit the most. Getting as deep as possible in 

the credit box and increasing the number of 

institutions offering these loans because people 

can only get them at the place they have a 

checking account.

It's not something where they can go 

to another institution where they do not have a 

checking account because that relationship is 

absolutely crucial for the loan being successful 

because banks are lending to people who would not 

qualify and do not qualify for other products. 

So that relationship is absolutely essential that 

there is a checking account in place and 

regularity of deposits.

If we do all that, the fact that 

payments are affordable, they are only a small 
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share of each paycheck, the prices are fair, and 

there are safeguards in place that will improve 

consumer well-being. And that is happening for 

consumers who have access to these products 

today. Thank you.

MR. BEVAN: All right. You're a hard 

act to follow. That was great. Thank you, 

everyone, for your time today. I really 

appreciate it.

Balance Assist, a small dollar loan 

product is designed to be affordable, 

transparent, simple, and conveniently accessible 

to our clients when they are having difficulty 

making ends meet.

I would like to offer this scenario 

when I talk to people about Balance Assist to 

help them understand. Imagine this, a client in 

a grocery checkout line suddenly realizes as they 

are checking out that they don't have enough 

money in their checking account to pay for their 

groceries.
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They can take out their mobile phone, 

log into Bank of America's app, apply for the 

loan, and if approved, have the funds disbursed 

in time to pay for those groceries before the 

clerk is done checking out the groceries.

So we've had tremendous success with 

the product to date. The last time I had the 

privilege of talking to the FDIC about Balance 

Assist in July, we were on the cusp of reaching 

1 million loans disbursed, and I am happy to 

report we are now at 1.1 million loans disbursed, 

another 150,000 or so additional loans disbursed 

in just those few months.

All of that amounts to $500 million in 

additional liquidity for clients who need to make 

ends meet disbursed to date since we launched 

nationally in March of 2021.

So what I would like to do is talk a 

little bit about how the product is designed, 

eligibility, and then we'll talk about the client 

experience journey.
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So Balance Assist offers clients up to 

a $500 loan in $100 increments. It's only a flat 

fee of $5. There is no other fee for this loan. 

There are no late fees. There are no other fees 

to speak of.

The loan is repaid in just three equal 

monthly payments. The client can set up 

automatic payments in the application to make 

that an easier process.

It's entirely digital in that all of 

our marketing, the research the client does on 

their own, the application disbursement, even 

adverse action for decline letters is done 

digitally to keep this all in one place and 

directly in the hands of the client.

And then the account that receives the 

proceeds after they're approved and the proceeds 

are disbursed, that account is set to decline all 

overdrafts setting, which means that if they 

attempt to make a purchase and don't have enough 

funds, their transaction will be declined. And 
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that's to help the client because these clients 

are in financial distress very often. We don't 

want them to become overextended and make a 

difficult situation even worse.

Let's see here. I'd like to go to the 

next page. Here we go. Okay. So let's talk a 

little bit about eligibility criteria. So we 

require that the Balance Assist borrower has at 

least 12 months of a checking relationship with 

us. And we actually see that the average tenure 

of our Balance Assist clients is much longer than 

that.

They have to have an open checking 

account that's not safe balance and have a 

positive balance in all of their checking 

accounts. So you can't use the Balance Assist 

loan to pay us back for an overdraft.

They have to have regular monthly 

inflows, which are very reasonable for a client 

that has a full-time job and many clients that 

even work part-time could meet our income 
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requirements. And they can't have an open 

Balance Assist loan and get another one. They 

also can't have more than six Balance Assist 

loans in a rolling 12 month period.

And this actually a change we made to 

the product after launch as the guidance from the 

FDIC and other regulators indicates we don't want 

to create a system of dependency on these loans. 

And so originally we had a 30 day cooling off 

period so you couldn't borrow a second Balance 

Assist loan right away after you paid off your 

first one. You have to wait 30 days.

What we found was that clients were 

applying in large numbers in that 30 day period. 

They had a need for additional liquidity 

immediately after repaying the Balance Assist 

loans. And furthermore, we found that many of 

them were actually going to payday lenders to get 

that liquidity.

And so in order to be there for our 

clients when they needed the liquidity, we got 
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rid of that rule and then to reduce dependency on 

the loan, capped the number of loans that a client 

can have over the course of 12 months. 

And if you do the math, you're like, 

well, why is it 6 loans in 12 months. I thought 

it's a three month term. It should be 4 loans in 

12 months. A lot of clients do repay their 

Balance Assist loans early. Okay? And then they 

come back for additional liquidity.

And then we have credit bureau 

criteria that we use on top of our eligibility 

criteria. We rely heavily on our internal 

criteria. And in fact if a client does not have 

a credit score at all, we do require additional 

tenure of two and a half years, and they have to 

meet all of our internal O&S eligibility 

criteria, but we will still approve a client 

without a credit score.

Let's talk a little bit about the 

client experience for marketing through 

repayment. I guess the clicker is tired. It's 
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probably running out of batteries after a long 

day.

Okay. So marketing. Rather than 

pushing the product at a sales format, we are 

trying to raise awareness of our product among 

eligible clients. We target clients monthly in 

a variety of digital channels to raise awareness. 

But email is the most effective. Every time we 

drop email, we see a large inflow of 

applications.

Most of our marketing is very terse. 

So we drive the marketing into a landing page, 

basically a web page for the product to give them 

a lot more information about the product before 

they make a decision. And then that will in turn 

take them to the application.

All of our marketing, including that 

landing page and the application itself is 

available in English and Spanish.

As for the application, it's very 

brief. And we talked about the grocery store 
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example. There are really only four fields in 

the application. All the other data we need on 

our client to process the application, we already 

have because they have logged into their online 

banking account. We have access to their profile 

or their history with us.

And if they are approved, we present 

the amount they are approved for. They can accept 

that amount or they can actually choose a lower 

amount and consent to the terms.

And then if they are declined, they 

will be notified right there that they couldn't 

approve their application, and they will be 

notified that an adverse action notice would be 

provided the next day electronically to them.

When approved, the client then -- and 

after they've accepted their terms, they select 

a checking account into which we will place the 

funds. And they can set up autopay, which is 

optional. It's very popular though. The 

majority of clients do select to have their 
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payments automatically made. And the funds are 

available in minutes.

So again back to that grocery store 

example, it's very important to us that once 

approved, the funds are available almost 

immediately. My experience personally has been 

less than a minute was the fastest that I've had 

funds disbursed after approval.

And then, again, overdraft is set to 

decline all on that account. And they are 

notified of that by email as well.

As for servicing, the account is 

immediately visible in online banking. And while 

we say it's entirely digital, we do have 

readiness materials in place for our associates. 

They have job aids. They are trained on Balance 

Assist so they can answer questions. And because 

the application is so straightforward and simple, 

they could walk a client through the application 

if they had to.

They also, you know -- special issues, 
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fraud claims, collections, we do have associates 

that specialize in caring for our Balance Assist 

clients. And collections communications begin 

when a client is 15 days past due, well before 

they would be reported for delinquency.

All right. And then repayment, we 

send a lot of reminders. We try to stay engaged 

with the client throughout the process. For 

every payment, we send a payment due soon 

notification. When they make a payment, we 

acknowledge that with another notification. And 

if they fall past due five days after their due 

date, we will send them another notification. So 

ahead of collections notifications, every client 

will be notified that they have missed a payment. 

And then when they pay off their loan, we 

acknowledge that as well.

The client cannot make a payment in 

the overdraft. So if they don't have the funds 

to make a payment, we will decline that 

transaction. And then if we go -- okay. So I 
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think that's my last slide. Yup. And I'll turn 

it over to Tiffany.

MS. PACK: Okay. All right. I'll 

move this over here. This is not for short 

people. I will second that. Okay.

Can you guys hear me okay? Is that 

too loud or no? Okay. All right.

Thank you, everybody, for having me 

and trusting me with the next 10 minutes of your 

day. My name is Tiffany Pack. I'm with 

Huntington Bank. And I'm here to talk to you 

about our small dollar loan, Standby Cash.

I am going to touch on Standby Cash 

itself as a program, our journey, how did we get 

there and what have we learned so far.

And this is real sensitive now. I 

don't know what I'm doing.

DIVA: I'm going to have to advance 

the slides for you.

MS. PACK: Can you go back one? Okay. 

All right.
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So Standby Cash, I'm going to give you 

a little bit of a history lesson real quick. So 

Huntington Bank, our number one priority is 

looking out for our customers, which is the 

heartbeat behind our fair play banking journey 

that we started in 2010.

When you think of fair play, banking 

at its core began with fee forgiveness. Fee 

forgiveness, we wanted to give our customers the 

opportunity to avoid fees, but still also have 

access to short-term liquidity if needed.

Proof point with that is our AsteriskFree Checking and our 24-hour grace. I'm sure 

you guys are aware of our 24-hour grace where we 

give customers an extra day to cure any 

overdrafts before we charge any fees.

Well, that was in 2010. A decade 

later, fair play banking is still the foundation 

of how Huntington innovates today. And Standby 

Cash is another proof point in how we are 

fulfilling this purpose.
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Okay. So I did a little bit at a time 

hop. I'm going to go back to 2015. So 2015, 

Huntington actually wanted to do a small dollar 

loan. We wanted to give our customers the 

opportunity or find a solution for our customers 

to reduce their dependency on overdraft and 

overdraft fees.

Just unfortunately at that time, I'm 

sure you guys are aware, there wasn't a lot of 

regulatory guidance for us and we couldn't make 

the business case pencil.

So fast forward, 2020, regulatory 

guidance came out as we discussed earlier. And 

it was a perfect storm. We were coming out of 

the pandemic. There was a lot of unknown 

uncertainty. And we knew there was going to be 

a customer need.

So we acted quickly. We were able to 

get Standby Cash approved by the Board in 

September. The teams hit the ground running. 

And in May of 2021, I'm not sure if you guys are 
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familiar with the life span as far as product 

development, it's conservatively 12 to 24 months 

it takes to build a product. We built Standby 

Cash in eight months. So we were able to launch 

Standby Cash in May of 2021.

So what is Standby Cash? So this is 

probably what you guys really want to know. 

Standby Cash is a line of credit that we offer to 

our customers. It's easy, accessible, and it 

provides our customers with access to affordable 

short-term liquidity. 

Standby Cash, it is associated with a 

checking account, but it's not overdraft 

protection. Anytime a customer uses Standby 

Cash, they have to initiate the borrow. And they 

have three months to pay it back. And it also 

has no interest as long as they are set up for 

autopay. If they are not set up for autopay, 

it's 1 percent monthly interest.

I'm going to try to stay to my slides. 

Okay. The one thing that I like most about 
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Standby Cash is that -- oh, Diva, I'm sorry. Can 

you go back one? Okay.

One thing I like most about Standby 

Cash is the underwriting. We don't determine 

eligibility based on traditional underwriting. 

So we don't check the customer's score. We use 

strictly their deposit behavior. So how much are 

they getting in deposits? What's their balance? 

What's their overdraft activity look like?

We use that to determine whether or 

not a customer is eligible for Standby Cash. But 

we do report to the credit agencies. So this is 

my favorite subject, and I can talk to anyone 

about it for hours that will listen, is that 

because we don't use their credit score, they 

don't have to have credit for Standby Cash, but 

we report to the credit bureaus. It helps them 

build credit. It's helping our customers build 

credit, and we're seeing it.

So now we can -- okay. So when we 

launched Standby Cash, we had no idea what to 
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expect. We didn't have benchmark. We didn't 

have another product to benchmark it against. We 

didn't have financial performance to benchmark it 

against. We had no trend. We had no idea what 

to expect. So we learned a lot.

So the first thing that we learned is 

that our customers have a very, very strong need 

for this. We hit our annual target for new 

enrollments in two months. We were blown out of 

the water. We're like -- assumptions were really 

just that, assumptions.

And what's really cool, I want to say, 

neat about it, is it didn't just appeal to our 

subprime. We have a lot of -- excuse me, a good 

decent, I should, of mass affluent and wealth 

customers that are also using Standby Cash. And 

our customers are using it to proactively avoid 

overdrafts rather than using it reactively.

Convenience and access matters. Alex 

alluded to that earlier. They want it, and they 

want it now. They want it to be easy. And our 
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customers can borrow and access funds in less 

than three minutes. That's with the initial 

enrollment. After enrolled, they can access 

funds within seconds.

And then our Standby Cash users, 

again, my favorite subject, are using it to 

establish and build credit.

Okay. So when we built the product, 

any enhancement that we make, as we think about 

our future roadmap, we always take into 

consideration our customer feedback as well as 

the feedback from our community.

So some of the things that we are 

learning that we've learned is that the customers 

are saying is very helpful. They like that it's 

available to them. They think that we care about 

them. And then it's also helping them build 

credit is another sentiment that we're hearing. 

We're also hearing sentiments about they want 

more money. They want access to more money. 

Customers think they should be eligible, but 
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they're not eligible. And then some customers -

- we do show it to anyone that's eligible so they 

don't -- so some of the customers that don't want 

it, they don't want to see that offer.

And then with the community 

development so when we were doing the product 

design, we worked with -- we did a lot of customer 

research and then we also partnered with customer 

advocacy groups that supported productive 

classes. We partnered with our groups within, 

our community groups within the organization.

And one of the things that we heard is 

that they want to see customer education, 

financial literacy from this program. So we do 

provide that to our customers. There's a 

journey. So it's not just a one and done. It's 

not just as soon as you enroll. We give you some 

financial literacy and then we're done.

We are with them throughout key 

behaviors. So if, you know, through payment 

activity, high usage. We send our customers 
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emails to let them know, hey, you know, you 

probably don't want to use this much or your 

payment is late. This is how it impacts your 

credit. So they can understand how their 

behavior is impacting their credit.

Oh, yes. Thank you. Okay. So I 

mentioned earlier when we launched, there was a 

lot that we didn't know. One thing that we did 

learn quickly is that we didn't make the product 

too accessible to too many people that were not 

using it responsibly.

And it did give us -- the initial 

eligibility criteria that we had gave us -- it 

was a credit risk. It gave us a cost of capital 

that was not sustainable. So we did have to make 

some program changes.

I mean, one thing that we did learn 

though is a key risk indicator of how a customer 

-- just basically a key risk indicator for a 

customer is how they operate their primary 

checking account. So I'm talking about what 
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their balances are. Are they overdrafting their 

account? What do their deposits look like? Those 

are key risk indicators of whether or not the 

customer will pay us back.

So we have made changes to our program 

that aligned with some of the things that we've 

learned through our data.

And then coming soon, Alex showed the 

chart earlier. We were the only one that was 

free. We are going to join the party and begin 

charging for the use of Standby Cash next year.

And then I think that's -- oh, I still 

have this. That's it.

MS. ORTIZ: Thank you.

MS. STERN: Alrighty. So, yeah, I 

like being the caboose. It's no problem at all. 

And I'm from the Bronx. I'm sorry that the 

chairman is not here because we have that in 

common. So I talk very quickly so -- I also 

wanted to say that not everybody is familiar with 

Spring Bank. But I now have a 9-month-old 
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granddaughter. So I'm very into the little 

engine that could. So I think in some ways that 

describes who we are.

So for those who don't know us, we are 

a bank that was established in 2007 in the South 

Bronx with a goal of meeting the needs of the 

community. We are located in the poorest 

congressional census tract in the country. I 

know that sounds a little odd being that we are 

in New York, but it's a very, very high density 

neighborhood with a lot of poor folks.

And I have to shout out to Jonathan 

Mintz who was there at the inception, and Brian 

Blake who was there close to the inception. So 

thank you for creating an establishment that pays 

me. So thank you for that.

So as I said, we were established in 

2007 really as you can imagine right into the 

headwinds of the financial meltdown with the goal 

of proving out the case in part that you can be 

in a poor or low to moderate income community and 
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still make money. And we have actually been able 

to do that.

So we are a CDFI bank. We have been 

a CDFI for about 10 years. And six or seven years 

ago, we became a B Corp. So for those of you who 

may not know, the B Corp movement is companies 

around the globe who are for profit and for good.

So we're both very, very, excited 

about being a CDFI but also excited about being 

a B Corp. We think that it sort of gives us --

it's another credential. It helps us to sort of 

to lay the case for who we are more recently, 

more readily.

So I think I may have skipped one. 

Let me go back one. Yeah, so here's a brief 

timeline. This has been definitely an 

interesting journey. And unlike my colleagues 

here, we were looking from the get-go being able 

to lend to others in addition to our customer 

base. And that, as you can imagine, has a whole 

load of challenges that are very different.
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Before I came to Spring Bank, I was at 

Inclusive. I worked with credit unions. You 

know, it is a membership which is loyal to the 

credit union. That's a very different model in 

some ways from a bank although we like to think 

we have a very loyal customer base. But it does 

raise some additional challenges when you're 

lending to non-customers. And the goal in 

lending to non-customers, of course, is to 

convert people into customers.

So we rolled out a couple of products 

that were not sustainable. One that I thought 

had a lot of promise called Borrow and Save, which 

I also worked on with credit unions where a 

certain percentage of the loan was retained in a 

savings account, only accessible when the loan 

was paid off in full. But we sustained fairly 

significant losses. We have done a couple of 

other modifications and permutations of small 

dollar lending. And then we landed on our 

employee loan, which I will describe in a moment.
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But generally the challenges are 

finding a viable product. I think it means being 

in it for the long haul. This has not been an 

easy road. And we have gotten a tremendous amount 

of support from the CDFI fund. And that has 

certainly helped us be innovative and also build 

sustainability over time.

And Chairman you missed the fact that 

I gave you a shoutout to also being from the Bronx 

so.

CHAIRMAN GRUENBERG: Thank you. Are 

you from the Bronx?

MS. STERN: I am from the Bronx. Well, 

I like to think I was from the Bronx. My parents 

thought we were from Riverdale, but I went to 

high school in the real Bronx. You caught me on 

that one so. Yeah, my parents signed every 

letter, and their return address is Riverdale, 

and I always said da Bronx so.

Anyway, being in the small town 

lending space, especially for a smaller bank, 
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means that you have to be in it for the long haul. 

We do not use credit scores for most of our small 

dollar loans as you can imagine. That has been 

sort of an interesting challenge, but it has 

worked for us in many ways.

We have also tried the alternative 

credit score space. We haven't found that to be 

any more effective than not using a credit score. 

So we have stopped using any variation of a credit 

score.

There are some great models out there, 

and we work with a company called Happy Mango, 

which I love. And they're our platform provider 

for this. And they had an alternative model. 

But we sort of did some soft credit pulls on a 

lot of our customers, and found there was no major 

distinction between the alternative model and the 

credit score model.

So essential to doing small dollar 

lending, it's been touched on many times, is 

adding technology. There was some discussion 
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earlier today about the challenges of trying to 

plug in new technology to your core. We used one 

of the basic core systems. So we built a platform 

outside the core and that's worked really well 

for us.

We outsource our financial 

counseling. We don't have the capacity or the 

capability, the know-how, to do it in-house. We 

have so many great partners where we are in New

York who do financial counseling. So we work 

with many of them. And we have baked into our 

platform access to Green Path. So you click a 

button on our platform, and you get connected to 

a financial counselor. And it's all private. We 

don't know if folks are doing that.

Marketing appropriately, for the most 

part, we of course are marketing a product. But 

we think of it as marketing an opportunity.

Collecting the data, there hasn't been 

a lot of discussion about that today. I am up to 

here with data collection so if anybody wants to 
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take on any of that. We collect a lot of data, 

and we are being required to collect more and 

more. But frankly, a lot of that data is 

extremely useful.

And we have a carve out for monies we 

got from Treasury for ESOP that allows us to 

collect demographic data that we wouldn't 

otherwise be allowed to collect. So that's been 

a sort of interesting journey as well. As I said, 

be willing to innovate, pivot, in our case take 

some early losses. I know that's difficult. But 

as I said, we do have CDFI grant funding that's 

been enormously helpful.

So we landed, after I said, much trial 

and tribulation on our employee opportunity 

program, which we have been offering since 2017. 

It's a way to get credit to people who may not be 

customers, but do it in a way that's responsibly 

and hopefully over time sustainable.

So we use the fact that people are 

employed in lieu of a credit score. And we 
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partner with employers. We currently have 37 

employers, some of them quite large. Some of 

them about 50. We try. We aim for 50 or more. 

And this is built in, I think, a really creative 

and interesting way that allows working folks to 

access credit. The loan is on us, and costs the 

employers nothing. We don't charge anybody to 

participate. And we've done -- we're doing 600 

or 700 loans a year. We would love to double 

that and that's certainly our goal.

A quick look at what the loan looks 

like. A loan of up to $3,000, no minimum credit 

score requirement. The first loan $3,000. The 

second loan up to $3,500. You can use it for an 

emergency. A lot of people use it to go on 

vacation. We're fine with that. As a matter of 

fact, there are more people using it for what I 

would call positive opportunities than 

emergencies than we anticipated.

It's 12 months, fully amortizing 16 

percent. I'm sure many of you know, or some of 
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you know, that New York State has a usury cap, 

which we're very proud of in New York at 16 

percent. It makes it a little more challenging 

as the interest rate environment has changed. 

But it also means that we do not have storefront 

payday in New York.

So you're not going to see -- like 

many of you have been around the country where 

there is a payday lender on every block. You 

won't see that in New York. It doesn't mean that 

people are not accessing other ways of getting 

payday loans online. We are surrounded by rentto-own stores and check cashers where we are in 

the Bronx. So the challenges are still out there, 

but they are bit different.

A really unique piece of this program, 

the employee loan, is that the loan payments are 

a direct deposit into a savings account we open 

for each borrower.

So that means that anybody can divide 

their deposit, their paycheck any which way they 
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want. They can put, you know, some of it in their 

Chase account, some of it in their Huntington 

Bank account and then at least the payment amount 

has to go into their Spring Bank savings account. 

We pull the payment out of there.

And what we've learned over time is 

that it was pretty easy to add a feature on the 

platform where somebody clicks a button to add 

$25 or $30 or $40 to every loan payment. We also 

have a lot of instances where people, for better 

for worse, forget to turn the payment off. They 

don't have to. I mean, they don't have to 

continue it obviously.

So we have had instances where people 

come in, in an emergency. They need another loan. 

And we're like, wait, you've got $1,200 in your 

savings account. So I don't tell people they 

shouldn't know where their money is going every 

month, but we have had plenty of instances where 

people come in for more money and another loan, 

and they don't need it.
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As I said, we partner with Green Path 

in addition to some local organizations so that 

anybody can get financial counseling with the 

click of a button.

This is just a look at how we talk to 

employers and how we explain it. A real challenge 

for us is the fact that, you know, you talk to an 

employer in New York who is earning a good amount 

of money. They are in the C suite. And you say 

16 percent, their hair stands up on end. That 

sounds like a lot, a lot of interest to a lot of 

folks.

So we try to explain that, you know, 

this stuff is going on. And it's a little dicey 

in that you don't want to accuse an employer of 

not paying enough. So we try to sort of thread 

that needle as well as we can.

As I said, technology is critical to 

this product. We have a great partner in Happy 

Mango. I wanted to ask Kate Hao, who is the 

developer, how she picked the name. She said the 
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fruit products always do well. So that's how she 

landed on Happy Mango. They've been a fabulous 

partner. And she makes changes and modifications 

for us and adds features as we go.

This is a little more detail on how it 

works. Employee applies online. We cannot turn 

this product around instantaneously. That would 

be a goal if we could. But the platform 

automatically sends an email to employers so they 

can verify the person is employed, and they tell 

us how much they are earning.

A lot of our employers are very quick 

to hit the -- all they have to do is hit a button, 

and the information comes back to us. But some 

people less so. So we never promise that we'll 

get these out in less than three days. We often 

do. We have just added staff that has allowed us 

to turn them around in two days, but we never 

over promise.

Why we're able to do this at no cost 

to employers in part is because of support from 
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the CDFI fund, but we would be doing this anyway. 

And our goal is to build enough strength and 

capacity and at least double the number of the 

loans in the next year so that we can reach 

sustainability on this product. And then we hope 

to make the case to, and we continue to try to 

make the case to, fellow CDFI banks and others 

that this is doable and can be profitable.

It's probably not a big, big surprise 

that employees love it. All of our employers 

have been happy with the process. We've had to 

turn off a couple of employers because of higher 

than average losses, but we've also offered folks 

an opportunity -- Eileen Fisher Company came to 

us during the pandemic and asked us to set up 

loan product for their furloughed employees. We 

said no problem. And Eileen Fisher personally 

backstopped them. So why not? Let's do it.

So as I said, easy for employers. Why 

it works, the user experience has been really 

good. We offer it as a holistic benefit where 
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there are loans and savings and credit building 

and counseling all baked into one product and one 

program and one platform.

Customer retention, currently 25 to 30 

percent of employees who have taken the loan 

maintain an account with us. Actually, more do, 

but a lot of those are sort of very, very small 

balance. So we're just sort of building in a way 

to reach those folks on a regular basis to explain 

to them why it would be good to continue to bank 

with us or increase the balances in their savings 

account. But a sizable have moved over either 

their entire direct deposit or continued to bank 

with us.

I think that's really the essentials. 

This is, as I mentioned, some of the challenges 

in trying to convince new employers to come 

onboard. Currently, we've disbursed $9 million 

in small dollar loans, most of those employee 

loans.

And I know we're pressed for time, so 
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I will leave it at that.

MR. FRIEDMAN: Thanks to our 

panelists. I think the presentations touched on 

sort of a range of interesting topics. I mean, 

for me, sort of hearing about the range of 

strategic objectives that institutions are sort 

of thinking about in this area, and the role of 

technology certain spark a number of questions. 

But I think in the interest of time, I will sort 

of hold those and open it up to the floor. So 

any questions?

MR. BOSTIC: So this has been great. 

This is a soapbox issue of mine. We need more 

competition against payday lenders and these high 

cost loan providers. And this is a product that 

I've been trying to see happen in a lot of places.

A couple things, this is all cash flow 

underwriting. And if you have certainty of the 

cash flow then there is going to be certainty in 

repayment. And that something that hasn't 

penetrated the industry as much. And I think 
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that is super useful.

I just had a couple of questions. 

Alex, you talked about regulatory certainty. 

There was one regulator that was not on your page, 

which is CFPB. I talk to bankers. They are 

worried about the CFPB. And they are not sure 

about the regulatory costs they see. So I would 

be interested to get your perspectives on that. 

I am going to ask all of them and then you guys 

can go.

And for Chuck, you talked a lot about 

the volumes. I didn't hear about performance. 

On all of these, I am curious as to how much nonpayment are we actually talking about just to try 

to set expectations for new lenders who might 

want to try to get into this. This is a higher 

cost product. And so just being exclusive might 

be helpful.

I was just also curious, like Tiffany, 

like this seems like something you could market 

on. I know you need to have a product for -- you 
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know, a relationship for a year or something like 

that. But this could be a competitive advantage 

for a whole host of folks because the set of 

people who use these products is more than just 

the lowest balance people.

This is a strategic thing that happens 

all over the place. And I think it has the 

potential to appeal, which gets me to the last to 

the last question, which is where I started which 

is why is this not taking off? Like what do you 

think are the barriers?

Like, Alex, you said it's a success. 

It feels really slow to me, and it feels like 

folks are not leaning into this and trusting in 

the potential of this product nearly to the 

extent that they should give what you all are 

saying. Like I don't get it. It feels like 

there's a disconnect there.

MS. PACK: Do you want us to take the 

answers in the order --

MR. BOSTIC: However you want to do 
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it.

MS. PACK: I can go first. So when 

we launched the Standby Cash, it did take off. 

And we're actually still enrolling over 100,000 

customer each year. So we have a steady 

enrollment in our portfolio. And our portfolio 

is growing at a really healthy pace.

We took it out of mass media marketing 

when our losses got really high. So to put that 

into context, we were losing 36 percent a year. 

Our losses were at 36. That's a lot, so for a 

free product that wasn't making any money.

And it did bring in acquisition. So 

our strategy was acquisition retention. So we 

did see acquisition from Standby Cash. And 

retention was kind of hard to measure that early 

on because it was so early. So we did see a 

little bit of retention improvement from Standby 

Cash also. But that is the reason why we took it 

out of mass media because of the losses.

So we had to do some changes to the 
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eligibility to get that under control. And my 

goal, my personal goal, is to get it back in mass 

media at least to mid to end of next year once we 

have everything together because I want to open 

up the product to more people and increase the 

lines, too.

MR. BEVAN: You asked about 

performance. I can't speak to specific loss 

rates in this forum. But I can say the loss rates 

on the balance of this product are within our 

expectations and have come down over time due to

some tweaking of our eligibility criteria but 

also we see a lot of repeat borrowing. So a lot 

of the 1.1 million loans I mentioned earlier are 

from clients coming back. And we do see clients 

coming back and reaching that six loan limit in 

12 months. So that's a good testament to the 

efficacy of the product and the popularity and 

utility of the product among our clients.

And then you asked about -- I'll 

comment on your question about why it's not 
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taking off, maybe profitability. It also may be 

a matter of framing. For us, we do a really good 

job at the bank of deepening and maintaining 

long-term relationships with our clients. And 

while we require a year of tenure for this 

product, the actual tenure of these clients that 

are taking Balance Assist is, you know, in many 

cases 5, 10 or more years. We've invested already 

a lot in those relationships over what might be 

a decade or more. And banks look at the benefit 

of long-term tenured deep relationships. And 

this is a driver of maintaining and further 

deepening those relationships. I think you'll 

see more lenders give it a second look.

MS. STERN: I just want to say this 

is so interesting because our losses on the 

employee loan program, which albeit is relatively 

small, are less than 5 percent. So, you know, I 

think we're -- and they're not necessarily longterm customers. We also have a product very 

similar to the Bank of America product for 
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existing customers that we've had for a very long 

time. But it's kind of interesting to me that 

losses pretty well managed.

MR. BEVAN: So CFPB is not a problem 

here. Once Director Cordray finalized the 2017 

Payday Lending Rule, it became pretty clear that 

nothing more strict than that was going to 

happen. And the 2017 Payday Lending Rule, which 

was rescinded, would have in no way gotten in the 

way of these products because they all have terms 

more than 45 days, and they are all repayable in 

a multi-payment structure. So they weren't 

covered by the 2017 Rule. So that rule would not 

have impeded these products in any way. And 

nothing more strict than that was coming down the 

road.

The CFPB did issue a no action letter 

template in 2020 at the same time as the joint 

guidance, which was helpful that the bank policy 

in suit had requested. But I don't see any real 

risk from the CFPB for institutions offering a 
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product like this that has a multi-payment 

structure.

MR. MINTZ: Could I? Thank you. This 

is a really interesting panel. David, thank you 

for moderating it, and Alex, the context was 

super, super helpful. All three of you should be 

really proud of these products. And I can see 

that you are. And Melanie, you brought back a 

lot of happy memories from your launch.

I have a question that has -- there 

are two sides to the coin for you, Tiffany, and 

for you, Chuck. So, Tiffany, one of the things 

that you talked about in regard to eligibility 

was concern about clients who have histories of 

overdraft.

I think you know this, but if not, 

folks back home will know, Huntington is the only 

big 30 consumer bank that doesn't have a bank 

uncertified product. And so I guess I might ask 

whether as you think about expanding eligibility 

rather than contracting it, you think about a 
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product that would generate successful histories 

of no overdraft with an account that can't have 

overdrafts.

So I think that there is a different 

direction for a solution to such a wonderful 

product being expanded. And I hope we can revisit 

talks with Huntington about that.

And then before you comment on that, 

the flip side, Chuck, probably not a big surprise 

to you is, are you announcing tomorrow that Safe 

Balance customers -- or later tonight that Safe 

Balance customers -- I'm trying to be nice here 

-- you know, are eligible, and why not?

I mean, especially if you are looking 

at 12 months of a successful relationship. For 

goodness sake, you've got this great account. 

It's a huge seller. They are successful 

relationships. They are your customers. They 

need this product more than anybody else. What 

am I missing from this equation?

MR. BEVAN: Which side of the coin do 
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you want to --? 

MR. MINTZ: You go first.

MR. BEVAN: -- okay. All right. So 

let me just take a step back and explain Safe 

Balance from our perspective, right? So the Safe 

Balance product, I managed this product when it 

was launched in 2014 many years ago so it's near 

and dear to my heart. But it's designed for 

clients who have expressed that they have had 

trouble with overdraft in the past.

They are willing to accept not having 

overdraft service available to them, paying a 

monthly fee and not having check writing ability 

in order to have those guardrails to protect 

themselves, right, from overspending, from 

falling into overdraft and the trouble that 

they've gotten into in the past. And also clients 

were entering the banking system after a period 

of being unbanked, right, is the primary product 

for us for clients who are just coming back into 

the traditional banking system.
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MR. MINTZ: That's not true of all of 

the customers, right?

MR. BEVAN: Not all. And that's --

MR. MINTZ: Like I talked to other 

banks --

MR. BEVAN: Any generalization --

MR. MINTZ: Yeah.

MR. BEVAN: -- about any product, we 

can find examples that it's not true. I will 

tell you like Balance Assist for Safe Balance 

clients, you might -- the average balance is very 

low. You might have clients in the Safe Balance 

portfolio who have several hundred thousand 

dollars in their Safe Balance account.

MR. MINTZ: No, no. I'm not talking 

about the outliers.

MR. BEVAN: Yeah.

MR. MINTZ: But I'm saying like my 

sense from most of my banking partners is that, 

you know, you are looking at maybe a 50/50 split 

of people who choose that account because they 
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like it and people who choose that account 

because it's kind of their only --

MR. BEVAN: Yeah.

MR. MINTZ: -- realistic choice. So 

anyway, I --

MR. BEVAN: I would say --

MR. MINTZ: I know you love this 

account --

MR. BEVAN: I do.

MR. MINTZ: -- so that's why I'm 

pushing.

MR. BEVAN: I do. And I think in a 

lot of cases clients are making a deliberate 

choice. And whether it's 50 percent or 20 percent 

or 10 percent that are those clients that are 

very vulnerable, we have to take that very 

serious when we're talking about small dollar 

lending as I talked about.

We're making this product extremely 

accessible, easy to apply for, easy to disburse. 

And a charge-off on a small dollar loan like this, 
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a $500 loan, is really nothing to Bank of America, 

right? It's such a small amount. But to a client 

who experiences that charge-off, it can really 

damage their credit. And so we have to be 

extremely cautious as we develop this product.

And I'm not saying we'll never make 

Safe Balance eligible, but we're in the early 

days of development of small dollar loans, and 

we're taking a cautious approach for the wellbeing of our clients as we consider product specs 

and eligibility.

MR. MINTZ: I would just respectfully 

urge you to take a look at the performance data 

of those customers and to ask yourselves in 

comparison to the performance data of the other 

customers who are currently eligible, you know, 

whether or not the type of product they have is 

really the go/no-go kind of factor that it needs 

to be at. I hope you will revisit that.

MR. BEVAN: Yeah, absolutely. 

MR. MINTZ: Tiffany?
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MS. PACK: Is it my turn?

MR. MINTZ: It's yours.

MS. PACK: Okay. So you make a good 

point as we go into a future that may not be 

overdraft. We may not be able to have overdrafts.

The one thing that I like about our 

overdraft behavior or the overdraft rule, 

eligibility rule, is that it encourages and 

rewards a behavior shift within our customers so 

they are proactively avoiding overdrafts rather 

than going into overdraft and then trying to cure 

that within the 24 hour grace.

So that's one of the things I really 

do like about the overdraft eligibility rule. 

But to your point, as we go into a world where we 

may not have overdrafts, there are other models 

that we will need to consider as we think about 

expanding our eligibility.

Two to three years into the product 

now, we do have more customer behavior data that 

we can look at to create more in-depth models as 
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we look at expanding our eligibility.

MR. MINTZ: You can put your heads 

together and take a look at the performance of 

those people in no overdraft accounts. Great.

MR. KELLY: I have a question. It 

sounds like profitability has been challenging 

with these programs. So help me in understanding 

how you all talk about them internally. Is it 

part of CRA? Where does it fit in your P&L 

internally if you don't mind without getting into 

too many details?

MS. STERN: So this is -- all of our 

small town loans are just baked into the mission 

of the bank.

MR. KELLY: I'm sorry. Could --

MS. STERN: I'm saying all of our 

small town loans are baked into the mission of 

the bank. This is in part of what we exist to 

do.

We have not -- I have heard in the 

industry a lot of discussion about a certain 
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amount of blow back or misunderstanding or a lack 

of understanding on the part of regulators. I 

have to say we haven't had that. We sort of lay 

out what the products are. And we have not, you 

know, had any excess regulatory compliance issues 

with the product.

It is not -- and we have several small 

town loan products together. They are not 

profitable. Thankfully the bank is.

MR. KELLY: Mm-hmm. Sure.

MS. STERN: So that allows us to do 

this. But that is certainly our goal over the 

next two years to build enough volume that the 

products would be --

MR. KELLY: Sure. Thank you.

MS. STERN: -- at least break even.

MR. KELLY: Thanks, Melanie.

MS. PACK: So, Kenneth, with our 

behind closed doors what I can say is that 

acquisition and retention, a relationship 

builder, is the conversations that we were having 
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when we first launched Standby Cash. And it was 

probably six months after we were asking 

customers why they were coming to Huntington.

And of our branch, customers that were 

surveyed, 24 percent said it was because of 

Standby Cash and because our acquisition is just 

90 days, so you just have to have an account with 

us for 90 days and not a year. And then for 

online customers, 44 percent said Standby Cash 

was one of the reasons why they came to 

Huntington. So we're using that as acquisition 

play.

With the P&L, we don't really -- we 

have the opportunity of writing a loan on our 

deposits P&L so that's been -- yeah, we've been 

able to do that so far. But now that we're going 

to be implementing a fee, we are anticipating a 

break even when it comes to our losses and, you 

know, what we would make off of the fee.

MR. BEVAN: Yeah, thanks. I think my 

answer would be similar and echo what I said when 
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I responded to Raphael's question. You know, if 

you take a longer view of the client 

relationship, and we're seeing long tenured 

clients applying for the Balance Assist Loan, 

it's a good investment in the relationship. And 

a lot of our growth in our deposits business has 

been because of our ability to retain and grow 

meaningful relationships with our clients. So 

it's just another investment in those longer 

relationships.

MS. CAMPER: A quick question, and I'm 

probably -- I just want to make sure I have the 

premise right before I ask. Bank of America does 

a credit check?

MR. BEVAN: We do. We do.

MS. CAMPER: And the two of you do 

not. And one of you said that you thought it was 

not predictive.

MS. STERN: That was me.

MS. CAMPER: That was you? Okay. But 

presumably you find some value in it. How do I 
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like -- discuss.

MR. BEVAN: I would love to talk shop 

on eligibility criteria in detail. We do find it 

predictive. And we find it to be an important 

component of the process. And if I go back to 

what I was saying a minute ago to Jonathan, you 

know, if there is a charge-off on a small dollar 

loan, that's not a lot of money. That's not like 

a large mortgage charging off on the bank. That's 

not a lot for Bank of America but that could be 

a very detrimental event.

And the credit report gives us insight 

into what else that client is doing outside of 

Bank of America. And they may already be 

overextended. We don't want to make a bad 

situation worse. And so it's very important in 

our underwriting to use the credit report.

MS. STERN: We did a -- for the first 

couple years of our program, we did a soft pull. 

Equifax allowed us to do a soft pull, which was 

great. So for several years, we did a pre- and 
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post-loan. And we just found it was not 

predictive of repayment. We would look at the 

folks who repaid. And some of them had great 

scores, and some of them did not and the other 

way. I can't say if it's something unique to us. 

I don't know.'

MR. HOROWITZ: Of the six large bank 

products that are out, two pull a credit report 

and four don't.

MR. CALHOUN: A comment, observation 

and question, I think it's really important here, 

the focus has been on the responsible credit 

product. But the research and experience show 

that that's only half of the solution. You have 

to also not have a bad product available also, 

meaning standard abusive overdraft.

We talked earlier about Fiserv. And 

Fiserv, one of the leading core providers, they 

provide overdraft services, actively marketed 

that. They also for a period marketed it at a 

very high cost bank direct deposit advance. It 
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was less than the payday lenders, but 

embarrassingly close to the payday lenders.

And they actively marketed in writing, 

don't worry. This high cost payday-like product 

will not reduce or diminish your overdraft 

revenue. It will just add onto to it. And in 

fact, the CFPB collected data on this because 

they tracked the data when eventually the bank 

regulators, I would give a nod to our OCC folks 

because it was mainly their banks, closed that 

down. CFPB had the data and showed overdraft did 

not go up at the banks. They got rid of their 

payday-like loans. They just went down.

What's notable here is all three of 

the banks you have here have very robust 

overdraft reform. I would start out, I think --

MS. STERN: We don't have overdraft.

MR. CALHOUN: You don't have overdraft 

at all, right. That is definitely -- but Bank of 

America notably limits theirs to a $10 fee with

two per rep, so nothing 10 up, so it's per year, 
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which -- and then this was actually part of that 

comprehensive reform. So otherwise, if you don't 

do that, people will flow sort of like water. 

Folks who have that desperate need for cash at 

the end of the month, they will flow back to the 

other products. So you got to plug the hole in 

the bucket as well as be putting the water in.

And then Huntington, I think your $15 

fee, which is well below the industry $35. So 

one, I think that's a really important part of 

this lesson. Repeatedly throughout this market, 

just like with subprime mortgage lending, we were 

offering fully underwritten fixed rate loans. We 

could not outcompete abusive exploding ARM 

subprime mortgages needed for the rest of the 

market. That's why QM rules are needed to protect 

the mortgage market. And similarly, you need

that here in the small dollar.

My question part of this is in North 

Carolina, we've had an experiment with this that 

goes back 20 years. So State Employee's Credit 
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Union, one of the larger credit unions in the 

country, was disturbed because in those days the 

payday lenders would come physically into the 

bank office on payday mornings and be first in 

line with their checks to make sure they were 

getting them cashed, which was much to the 

chagrin of State Employee's Credit.

So they set up a program called Salary 

Advance and continued to offer a variety of that. 

It was much like this. So lessons, I think, 

validate what you are doing. It is totally 

online. You can click on it today. You can click 

on it on the mobile or the computer mobile page 

and get it.

The total fee is 11 percent straight 

up APR. They believe they break even at that 

rate.

They have a very high take up rate and 

renewal rate, if you will. People taking them 

out again. So one of the things they did, and 

they have a variety of that, a more complex one 
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now under new leadership, they put in a built-in 

savings requirement. The one that they used was 

5 percent of essentially the loan amount.

So after you took out 20 loans, and 

people will take out 20 loans in a year if there's 

not a limit, you have enough in savings to get 

that amount of money without having to take 

another loan. That's how they built in a break.

So I just wonder if people have 

thought about experimenting with some built-in 

savings here given all the studies that show that 

having some savings at least correlates with 

dramatically reduced use of high cost lending 

products although the causation is not as certain 

if it's for savings. But again, things, as we 

talked about earlier, to experiment of how do you 

break that cycle.

The other thing, I don't know if you 

can comment on this, Chuck, is my understanding 

is that you have seen, in fact, account balances 

increase with the overdraft reform that you have 
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at Bank of America. So I don't know if you're 

the one who has those numbers or not.

MR. BEVAN: Yeah, I would have --

MR. CALHOUN: The question about the 

savings part and then have you seen the impact on 

account balances from either of these programs, 

your overdraft reform or the Safe Balance?

MR. BEVAN: Yeah, thank you for the 

question. I have not considered the savings 

component of it. We found that income is very 

predictive so the inflows into the accounts. And 

if we look at the average balance in total of 

total deposit relationship, the clients that need 

to balance this loan don't really have a lot of 

means to start saving. So it's an interesting 

component to kind of transition them from small 

dollar lending to savings. So definitely worth 

talking about. I like that. I like that idea.

And then thank you for that 

recognition on the overdraft reform. I was very 

proud of what we've done.
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MR. CALHOUN: The old standard as we 

say.

MR. BEVAN: I would also note that a 

lot of clients after they have been charged two 

fees will continue in some cases to overdraft 

without a fee. And so it makes it much more 

affordable for the client.

I can't really -- I don't have the 

data at hand to say that we have seen balances 

increase. But definitely improved the balances 

in general among clients who previously 

overdrafted very frequently because we have been 

working to drive down the number of clients that 

are reliant on overdraft, right, by some of the 

policy rules we've made. So definitely helping, 

but I don't have a number that I could share on 

that front.

MR. CALHOUN: And I don't know if 

you've got any comments.

MS. PACK: I can say -- I can't give 

you exact numbers. But I can tell you that we 
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are seeing a balance build in our Standby Cash 

users. So we believe that it's because they are 

not reliant on overdrafts, and they are not 

paying the overdraft fees. We are seeing their 

balances build.

MS. STERN: Quickly on the savings, 

and we can talk about this offline, on our 

platform we added a button -- we asked people if 

they want to add to their payment, $25, $50, $75. 

Do they want to move their entire direct deposit 

over, which some people do? They can say no, but 

they have to answer the question. So they can't 

move forward with the application without 

clicking something. And it's working.

MR. FRIEDMAN: With that, I want to 

thank our panelists, and I will turn it over to 

Liz to -- or to the Chairman. Thank you.

CHAIRMAN GRUENBERG: Thank you all for 

your indulgence. Let me thank this panel as well. 

You have been very helpful, and I appreciate the 

feedback on your experience. And it is something 
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we will be following.

Let me thank our staff as well for 

organizing today's program. I thought it was 

outstanding. And I thank all of the members of 

the Committee for their time and their service. 

It brings a lot of value to us.

We will see you next time. We will 

come back on some of the issues in particular 

relating to the strategic plan and how we might 

take that forward.

Listen, thank you all. Wonderful to 

see you all. Thanks. Thanks a lot.

(Whereupon, the above-entitled matter 

went off the record at 4:07 p.m.)