Speaking at the 2026 Just Economy Conference on April 15, Representative Bill Foster, ranking member of the House Subcommittee on Financial Institutions, recognized the importance of modernizing the Community Reinvestment Act for “tomorrow’s banking landscape,” protecting the Community Development Financial Institution (CDFI) Fund and preparing for a future with AI.Â
Transcript:
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Okay, what’s so funny about that? I think, all right, all right. So deal is, you’ve rarely seen a PhD physicist with walk up music. You know, this is…anyway, I just want to thank you all for for being here, and thank NCRC president and CEO, Jesse Van Tol for organizing this event and for his leadership in supporting community development, fair lending and community reinvestment.
You know, we’re really at a pivotal moment for fair lending, for access to housing and community investment. We’re also seeing the emergence of exciting and terrifying new technologies that have the potential to reshape financial services, specifically the emergence of artificial intelligence and agentic commerce.
Congress right now is is considering legislation, you know, really potentially very significant legislation to support the development and construction of affordable housing. The legislation that was passed by the House will streamline permitting for new construction, adjust FHA multifamily loan limits and make important reforms to existing programs like the Home Investment Partnership, community development block grants and Housing Choice Voucher Program.
The Senate has its ideas as well, and there’s an interesting negotiation that I imagine you may hear more about this later in this. It would also provide additional flexibility for banks to invest in public welfare, increase agency coordination to support our veterans, and make reforms to make it easier for banks to access capital they need to lend to our communities.
The Community Reinvestment Act remains an important economic policy but it’s important for it to evolve and to meet today’s banking landscape and tomorrow’s banking landscape. The reforms made in 2023 made progress in modernizing the CRA to better reflect online banking, nonbranch lending and persistent inequities. And while regulators have proposed rescinding the 2023 reforms, it’s essential that we continue working to ensure that the CRA achieves its goals as the banking system evolves.
We also have to ensure that programs like the CDFI Fund continue to support these efforts. Delayed funding for CDFIs has delayed important community investments across the nation, and I welcome the release of the remaining funding for 2025. However, I urge the administration to prevent future funding delays and to provide the flexibility for any challenges created by the delay.
We must also ensure that community development programs are not saddled with unclear requirements for executive orders or elsewhere that will make it harder for firms to do their work.
And then there’s the CFPB and consumer protection. You know, Democrats on the Financial Services Committee are very concerned of the administration’s demolition of the CFPB. The CFPB was the cop on the beat for fair lending compliance. It ensures and enforces rules that are meant to prevent discrimination in consumer finance, and these rules attempt to level the playing field and ensure that nobody is treated differently based on their race, sex or other protected characteristics. And so that’s going to be an ongoing battle.
But it will be changed by everything that’s about to happen to the financial system and in regards to artificial intelligence, you know, if we, if Democrats, have a good election, I’m in line to be the chair of the banking subcommittee in the US House and our financial institutions committee, so I spent a lot of time worrying about the effect of artificial intelligence in destabilizing our financial system. It’s going to happen both directly and indirectly.
The indirect effects will simply be the damage that AI will do to many long-standing business models. And you can see that the famous Citrini memo that caused the mini-crash on some sectors of the stock market a while back. You know, I think, frankly, that has a 50% chance of coming true. And it’s, it is there are a lot of rethinking that we’re going to have to do as a society, when artificial intelligence breaks the chain, the connection between talent and hard work and economic success. And so we’re going to have to, we’re going to have to, really, as a species, think about what it means to be a human, and what the value of a human is that’s maybe a little bit separated from the market value of their economic output in their labor.
But I’m specifically worried about a bunch of things it’s likely to do to the to the financial service system. You know, in the future, near future, everyone is going to have their own personal agent in their pocket. We’re going to have the best set of financial advisors that’s ever been, ever been assembled. As individuals, we’ll have. And so that will potentially simplify a lot of consumer protection. When everyone has a very sophisticated financial advisor, sort of automatically for very low cost, then there’s a lot of things that we will have to worry less about, but there’s a lot of work to be done to make that a reality. You know, for example, when my agent starts talking to your AI agent, the very first thing they’re going to have to do is sort of scroll down and hit, I accept and make sure that we that we have an agreement on data privacy and logging the conversation between our agents. Understanding, if you go into arbitration, the circumstances under which we have agreed to go into arbitration. Things like data privacy, you know, how long, if there’s data exchanged, how long that data will be retained. Who is going to audit the retention policies for that data? And so all of these things happen ought to happen sort of automatically and by default, when we have this new world of agentic communication, and we have to make sure that, if we do it well, that we’re going to have the mechanisms in place to prevent, prevent consumers that are maybe not as sophisticated as as the most sophisticated consumers, that prevent them from being hurt. And I think it can be a real leveling exercise.
A similar thing is going to happen in the law. You’re going to we’re soon going to have in our pocket the best legal team that’s ever been assembled. So, for example, if any one of you gets in a fight with a billionaire, the billionaire is not going to be able to threaten to bankrupt you with legal fees, because you will have just as good a legal team as he or she will in your pocket for very low cost, and you already seen that. Now there, there are some landlords are who, who are not repairing the air conditioner, are finding that that they’re, you know, their tenants are just consulting chat GPT, and chat GPT is filing all the paperwork to go into small flames court, or wherever it is, and, you know, and get the thing fixed. So they’re finding they’re having to fix the air conditioner, which doesn’t please all of them. And, but it’s a, it’s sort of a reflection of the dueling narratives that we have and, and what’s going to happen to AI, you know, in one extreme, you have, ‘oh it’s going to take everyone’s job and we’re all going to be unemployed’. The other one, ‘oh, it’s going to be great. It’s going to be a force multiplier. Everyone will be much more productive.’
And I think that the difference in how those play out depend on the on the demand for the for the product that you’re actually ultimately building. You know, one example of that is farming. There’s sort of a fixed amount of food that we need, and when farmers have gotten, you know, 100 times more productive with technology, we need 100 times fewer farmers. And that’s sort of what rural America and the rural world has been living through because of the fixed market for the fixed need for food.
Counter example of that is airplane pilots, as air travel has gotten as pilots have gotten many times more productive with technology in terms of passenger miles per hour of their time, you’ve found that the real price of airplane tickets has gone down, at least if you stay out of wars in the Gulf, it’s gone down. But these are but what that’s meant is, as the price of airplane travel has gone down, the demand has exploded, and the number of airplane pilots has gone up enormously, and so and so. I think that unfortunately, well for good or ill, I think the law is another area like that, where you’re going to see as the cost of lawyers goes to zero, the number of lawsuits is going to explode. And we have to actually understand how we’re going to deal with that, because we’re either going to have to provide a large number of judges or find a way to automate that, which is sort of everyone’s dream or nightmare of having, you know, instant computer-negotiated decisions.
So there’s a lot to worry about. You know, I worry about things like, like aI driven bank runs, if you all remember the Silicon Valley Bank run that took 40 hours, and when we had our emergency meeting with the FDIC the morning after that happened, you know, they look shell shocked because they’ve seen a bank run that fast and but if everyone had their AI financial agents sitting there with with, you know, standing orders that if you even hear a rumor that my bank’s in trouble, get my money the heck out of it. You know, these bank runs can happen in 20 minutes, and so we’re not ready for that. And I was just talking backstage with Michael Barr, who you’re going to hear from next. And so we agree that we’re not ready for a lot of this stuff. And that’s going to be one of the things…I think it has the potential to make a much more just and equitable economic system if we, if we, if we do play this right, but it’s going to require sort of all hands on deck and a real attention to, you know, to what it means to be human and what it is that we really value about our economic system.
I’ll close with one last thing, specific thing that we can do. There’s a just a plague of identity fraud that’s descended on everything online. And there’s a tool at hand for that that I’ve been working on for years, and now I’m a little bit optimistic it’ll happen, and that’s this, these digital driver’s license, mobile ID. Because when if you look at almost all the identity fraud that’s plaguing businesses and individuals all over the country, it almost all these, you know, romance scams, whatever it is, they always start and have at their core identity fraud. If you look at during COVID, there were hundreds of billions of dollars stolen from the Federal taxpayer through essentially identity fraud, much of it by hackers in North Korea and China. And this is money that could have done a lot of good had it stayed in the United States, doing its intended job. And so the tool that works and worked during covid For and is being deployed all over the world, except for here are these mobile IDs. This is where you simply you have a national, nationally issued identity, the real ID, driver’s license in the United States, and you give people the ability to present it on their cell phone. So you combine these three things: the nationally issued or nationally recognized identity document that proves you’re a single, legally traceable person, you associate that with a cell phone – take advantage of the fact that a modern cell phone is a unique device in the world that has a secret numbers in it that can be queried, but no one knows what the numbers are – and then you associate that with the the biometric login that you can do where your phone will recognize your owner and those you tie those three things together, and that’s the only realistic way and a good way for a person to prove they are who they say they are online. You simply get out, you smile at your cell phone, you present your digital ID, give it approval, and that, that is what is being deployed in the EU. In the UK, actually, after years of objecting to this, has realized it’s essential. Japan, Korea, the whole world is adopting standards that are already in every Android and iPhone. They were actually developed by NIST in the Obama administration, and the rest of the world has adopted them, but not yet the United States. And using those for onboarding customers would have been, you know, just a godsend during COVID, when we were trying to get COVID relief to people who were thin file clients, who didn’t have a record, you know, if you if they had been able to simply get out their cell phone prove they are who they say they are, the countries that had that had very, very rapid ability to help people, and so that getting that deployed in the in the US has been my, a priority of mine for a long time. I now have Pete Sessions, who’s about as card-carrying a Republican as exists, is my co-sponsor on something to try to get states some money to actually get these widely deployed.
So there’s a lot of work to be done here, and it will be. It’ll be, you know, consequential elections coming up, and if it ends up in a way that the public trusts us for, for, you know, being in at least partial control of the financial system during a very tumultuous next few years, then I think I’m optimistic we can do some real good. So I just want to thank you all for being, you know, in the conversation you’re in today, and everything you’re doing for people that will depend on all of us doing the right thing in the coming years.
Thank you all.
