Acting Comptroller Rodney Hood announced Thursday the Office of the Comptroller of the Currency is restructuring the agency’s Office of External Relations and Strategic Partnerships, a financial inclusion unit.
Hood said the new office would be led by Andrew Moss, his acting chief of staff and the national director for Project REACh, who will help design the agency’s financial inclusion strategy.
“This work cannot be done in a vacuum and takes collaboration and partnership with organizations like [National Community Reinvestment Coalition] that play a vital role,” Hood said while speaking at a NCRC conference.
“There is still much that needs to be done,” he said, noting the agency needs help from those involved in Project REACh in “creating solutions that will promote economic opportunity and mobility for all communities.”
The revamped unit will also work with external stakeholders to identify economic barriers, build partnerships, and assist in innovation to promote inclusion in the banking space, Hood said.
Hood touched upon financial inclusion during his first speech as acting comptroller, outlining his priorities after assuming the new role last month. About 40% of U.S. households cannot obtain a $400 emergency loan, he said, estimating that 70 million people are “credit-invisible.”
“Financial inclusion is undeniably the civil rights issue of our time,” Hood said at the time.
Project REACh, rolled out in July 2020, stands for Roundtable for Economic Access and Change; it’s an effort to help minimize the financial obstacles that underserved communities face.
Hood said the OCC is “re-focusing” Project REACh to support financial inclusion. He emphasized the need for financial education to spread awareness about “opportunities and risks related to digital assets and create technical assistance vehicles that could lead to accessing affordable credit for new entrepreneurs and gig economy workers.”
Moving forward, Project REACh will focus on four key workstreams: affordable homeownership, opportunities for small businesses, technology and “geographic-specific efforts,” he said.
Hood wants to leverage technology to connect disadvantaged communities and financial providers, to facilitate access to affordable financial services. Fintechs help to improve efficiency and customer service, while digital tools help to analyze cash flow and spending habits, he said. He noted these tools can help banks make lending decisions and incentivize consumer savings.
Innovative cash flow underwriting techniques that banks are pursuing analyze consumers' deposit and bill payment habits, assess debt management capabilities and create credit opportunities for "credit invisible" individuals without traditional FICO scores, Hood highlighted.
Several national banks are piloting programs that use alternative data, primarily from deposit accounts, to offer credit-impaired consumers affordable credit lines and bring more people into the regulated financial system.
“The success of this pilot shows how outcomes can be accelerated and expanded through future collaboration and engagement,” he said.
Homeownership, too, is crucial to building equity, which can help underserved communities start small businesses or pay for education, he stressed.
Hood underscored the importance of homeownership, as well as generational wealth which “plays a pivotal role in breaking the cycle of poverty and building economic resilience,” during another conference appearance earlier this week. Owning a home is an effective vehicle for “accumulating and transferring” that wealth, he said.
During his Thursday speech, Hood pointed out that median family income rose by 24.6% between 2020 and 2024, while home prices surged by 45% during the same period. According to Freddie Mac, mortgage interest rates have also increased from roughly 3% in late 2021 to about 7% in recent years. These factors have led to homeownership challenges.
“We must recognize there’s no ‘silver bullet’ to immediately solve the challenges of financial inclusion and affordable homeownership,” but the OCC is considering a comprehensive agenda that “firmly roots financial inclusion for underserved and disadvantaged communities at its core,” Hood said.