The OCC’s Acting Comptroller of the Currency Rodney Hood spoke at the 2025 Just Economy Conference on how financial inclusion is the civil rights issue of our time.
Transcript:
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Hood
Wow. What an amazing crowd!
Yes, I feel the excitement, and it’s good to be here with everyone. Thank you so much for that wonderful introduction. But most importantly, thank you for allowing me to join you all at this very important conference on the just economy. And I always cherish opportunities to spend time with NCRC, and today is no exception. In fact, I’m no stranger to the organization, as was just mentioned, my affiliation began some 30 years ago, and I do want to set the record straight, it wasn’t just that Irvin Henderson and I decided to just randomly go to Paris. Let me tell you, there was a little bit more to it than that. I was young and beginning my career in community banking. I was a commercial loan officer. I just taken a new job as the CRA officer and Irvin Henderson, along with John Taylor, Buzz Roberts and Pete Gracia, we were all ladies and gentlemen, invited to go to Paris, France, to teach the French government about community development, talking to them about CRA and whether or not it’s something that they wanted to pursue to help their local communities and their individuals have access to financial services. So it was a wonderful time well spent, but you do get to learn a lot about people when you spend a week with them in a foreign country. And I will say that Irvin, who is sitting here in the front row, Irvin, great to see you again. And we both had hair then it was so amazing, but it’s still nonetheless wonderful to be with you all.
But as I talk about that position, or that trip that we all took with many of the pioneers in community development, my can I say how far we’ve all come since that time? Today, I’m indeed honored to oversee America’s federal banking system as the Acting Comptroller of the Currency. Thank you all.
But I was just going to finish that by saying, by no way should you interpret my being acting with being inactive. I certainly believe in really working hard and diligently, and we’re going to be talking about some of the things that we’ve been able to address over the past six weeks that I’ve been in my role. Many of you in this room may know that my interest in finance began when I was a youngster. I was studying accounting through college. I did have a little bit of a stint in Africa as a missionary, where I did look at perhaps going into the priesthood, and when I didn’t go into ministry, I went into finance. Logical choice, you may think. For me, it was a logical choice, because all the work you’ve heard me champion, all the work you’ve heard me advance, has been around helping the least amongst us. It’s been not necessarily having to wear the clerical collar to touch communities in need. So I want you to know that I have always cherished opportunities to give back. Whether I’m a CRA officer, whether I was the chairman of another federal regulatory body that oversaw credit unions, or in the work that I’m doing now, every role that I’ve had, I focus undeniably on the importance of financial inclusion for underserved because I know how transformative it can be when people gain access to quality, affordable financial services and products.
Make no mistake about it, financial inclusion to me, and undeniably, is the Civil Rights challenge of our generation. That’s why my focus has been on this has been on wavering, and I encourage innovative thinking among stakeholders in financial services about how we can lead the way to foster greater financial inclusion in economically disadvantaged communities. During my time as the NCUA chair, I made financial inclusion a priority for the agency and the overall cooperative system. Again, I continue to champion this topic at the OCC because I believe our national banks and our Federal Savings Associations should all help people to access our financial mainstream. A bank account is simply a starting point in financial inclusion, not an end-point. I want to repeat that a bank account is the starting point in financial inclusion, not an end-point. The first thank you. I agree with that, and I’ll tell you why I even as an advocate for Financial Inclusion and financial access, I think in many instances, I was putting such emphasis on getting that checking account and that savings account is, if that stopped. No. We need to look at having small-dollar loans, credit cards, mortgage lending opportunities, investment opportunities through 401 Ks. I’m thinking that inclusion really needs to be holistic, and I give you my word that I will be looking at holistic solutions to financial inclusion. Building banking relationships with consumers through investments into the financial literacy and capability training is also a good start. Lamentably, the number of households that do not have more than $400 in savings, to me, is alarming, and more must be done to increase their awareness and importance of personal money management. There are numerous reports that argue for more financial education to help families and workers save and build wealth while avoiding financial traps. Private sector financial partners should take the lead in expanding financial literacy training, including collaborating with community and faith-based organizations like NCRC to make these programs more widely available.
Next, I believe supporting small businesses and entrepreneurship is a key factor towards establishing an economic foundation in any community. Small businesses are the backbone of economic viability. They help to create the opportunities for employment and commerce that attract capital investments. I was very proud to work in creating with our friends from SBA and treasury, the Paycheck Protection Program administered by financial services providers that kept many of our Main Street businesses afloat during a time of extreme stress. It also proved the use case and significant community value in providing access to affordable business capital. Financial services providers can help businesses build and expand by providing technical assistance and innovative tools, products and services geared toward helping small enterprises get the access to the capital they need to create jobs, sustain jobs and support their local communities.
Another approach to increasing financial inclusion is leveraging the potential of financial technology. FinTech has shown great promise for improving efficiency and customer service, especially as convenience drives the increasing numbers of banking customers, like many of you, into a digital world. The same FinTech tools can be used to provide banks with analytical tools to explore customer cash flow analysis and spending habits, data you all that can be used to leverage products that can facilitate bank lending decisions, as well as materials to incentivize savings. The pace of financial technology development means that connecting financial providers with economically disadvantaged communities and further increasing access to affordable financial services knows no boundaries.
Additionally, building generational wealth is founded in homeownership. I know that’s something you often advocate. Yes, it is one of the fundamental building blocks. Buying a home helps members of economically disadvantaged communities have access to their American dream and own an asset to build equity that can ultimately provide opportunities for starting a small business or paying for an education or creating again, that building block for the next generation. However, financial inclusion should not just focus on buying a home, maintaining and preserving generational assets, such as a family home or farm is just as crucial to ensuring opportunities for economic mobility. Lamentably, over the past few years, housing affordability has indeed deteriorated. Between 2020 and 2024, median family income increased by 24.6%. However, during the same period, home prices rose by 45% nearly double the average five-year home price appreciation since 1980 According to the US Department of Housing and Urban Development, housing price growth has moderated in the last two years, with the year on year growth in late 2024 close to long term averages. Mortgage interest rates have also climbed from approximately 3% in late 2021 to a range of 6% to 7% in recent years, according to Freddie Mac. Higher home prices and increasing interest rates have contributed to affordability challenges which I know many of you are trying to address, with the share of median household gross income you all needed to buy an average price home increasing to 35% well above the average of 24%. According to the American Homebuyer Institute survey, 5.6 million households with a mortgage have, or roughly 11% of all households with a mortgage, they are now spending more than half of their gross income on housing costs.
Today, we simply need to find a solution, but we must, in doing so, we must clearly recognize that there is no silver bullet to immediately solve the challenge. Of financial inclusion and for affordable home ownership. However, we can carefully consider a comprehensive agenda that firmly roots financial inclusion for underserved and disadvantaged communities at its core. That’s why, as I stand before you today, I’m indeed pleased to highlight the financial inclusion efforts of the OCC through Project REACH. Project REACH, which stands for the roundtable for economic access and change, brings together leaders, like many of you in this room, leaders in banking, civil rights, community development and technology, to identify innovative solutions to financial inclusion for economically underserved communities. In fact, this initiative has already demonstrated enormous impact. Those of you that are in the New York Region, I want you to know that we will be having a convening in New York on April the 29th and I hope many of you can join us. For example, through reaches convenings financial institutions develop an affordable credit solution for consumers that were recently unable to access credit because they lacked a credit file or did not have a credit score. This resulted, ladies and gentlemen, in more than 100,000 accounts established under this particular pilot program. Other innovations related to cash flow underwriting are especially promising. Several banks have begun piloting tools that analyze consumers habits and making deposits and paying bills as a means of determining their ability to manage debt for credit underwriting purposes. This creates a range of opportunities for those who lack a FICO score, any type of credit score, and they are what we would call credit invisible.
Today, I’m pleased that several national banks have undertaken a pilot program to expand the use of alternative, non-FICO data, primarily from deposit accounts, to qualify credit-impaired consumers for affordable lines of credit and bringing them into the regulated financial system. And I put the emphasis y’all on the regulated financial system, because if we don’t bring them into our system, such as the OCC it makes them vulnerable to those pernicious and predatory payday lenders that are in all the communities that we really see every day. So we really want to bring them into the mainstream. The success of this pilot shows how outcomes can be accelerated and expanded through future collaboration and engagement.
This now leads me to tell you about more of how the OCC is refocusing and rededicating Project REACH in its efforts to support financial inclusion. Over the last five years, the OCC provided a forum for industry and community leaders like all of you to collaborate on developing innovative solutions, primarily centered on areas that were key to community and economic development topics. As we recognize the evolving financial landscape, we need to ensure that all communities are afforded the opportunity for economic inclusion and mobility. This means we need to educate consumers about opportunities and risk related to digital assets and create technical assistance vehicles that could lead to accessing affordable credit for new entrepreneurs and the gig economy workers. We will also focus our work, y’all on four key work streams. Affordable housing will be a work stream. Also there’s going to be a work stream devoted to small business. Third is going to be a technology work stream that’s going to work on the emerging technologies such as FinTech and digital assets. And the fourth work stream will focus on geographic specific efforts addressing unique economy challenges facing specific neighborhoods, communities or reasons throughout our country, thus promoting holistic development strategies for local areas, along with community leaders and representatives from MDIs and CDFIs.
But I’d be remiss if I didn’t tell you this, this work cannot be done in a vacuum. It takes collaboration and partnership with organizations like NCRC that play a vital role. So today, I’m happy to announce the restructuring of the OCC office that will drive this collaborative effort. I am pleased to stand on the stage here of the NCRC Just Economy Conference to announce the launch of the new Office of External Relations and Strategic Partnerships that will be led by Andrew Moss, who’s also serving as my Deputy Director or Chief of Staff. Andrew, please stand. applause. Andrew has been helping me every step of the way as I have taken on the mantle of Acting Comptroller, and he will continue to do great jobs, but with this new expansion of his efforts it’s critically important for the work that needs to be done. I know that there are many Project REACH participants here in the room that. So I want to thank you all for your work. I know that you’re going to soon hear from Mark Morial, who will also be an active participant on Project REACH. But Project REACH, as with many things, is not done in a vacuum or me doing it solo. Some of my colleagues are here today, and I’d like to recognize them, Shanice Brown, Lizette Flores and Crystal Dooley are all going to be working with Andrew and Project Reach. Yes, here, here to all of you. So here, here.
Now, everyone. In closing, I would like to note that financial inclusion is not just about banking. It is about fairness and opportunity. As the noted civil rights leader, someone that I’ve had the pleasure of meeting on many occasions, as the civil rights leader, Ambassador Andrew Young once said, and I quote, ‘To live with dignity, to live with liberty and to live with opportunity means that we must access and have access to wealth, building tools like education, jobs and homeownership.’ End quote. That’s why, together, I believe, ladies and gentlemen, that we can ensure that every individual, regardless of their background or circumstances, that they can all have access to these essential ingredients for economic mobility and financial security. And it’s in that vein that I conclude, and I thank you. NCRC, thank you for inviting me today. May God bless your conference, and may God bless each and every one of you. Thank you for having me with you.
Transcribed by https://otter.ai
