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FINANCIAL INCLUSION IN BANKING ACT OF 2021
Mr. CLEAVER. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 1711) to amend the Consumer Financial Protection Act of 2010 to direct the Office of Community Affairs to identify causes leading to, and solutions for, under-banked, un-banked, and underserved consumers, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1711
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Inclusion in Banking Act of 2021''.
SEC. 2. OFFICE OF COMMUNITY AFFAIRS DUTIES WITH RESPECT TO
UNDER-BANKED, UN-BANKED, AND UNDERSERVED
CONSUMERS.
Section 1013(b)(2) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5493(b)(2)) is amended--
(1) by striking ``The Director shall establish a unit'' and inserting the following:
``(A) In general.--The Director shall establish a unit to be known as the `Office of Community Affairs' ''; and
(2) by adding at the end the following:
``(B) Duties related to under-banked, un-banked, and underserved consumers.--
``(i) In general.--The Office of Community Affairs shall--
``(I) lead coordination of research to identify any causes and challenges contributing to the decision of individuals who, and households that, do not initiate or maintain on-going and sustainable relationships with depository institutions, including consulting with trade associations representing depository institutions, trade associations representing minority depository institutions, organizations representing the interests of traditionally underserved consumers and communities, organizations representing the interests of consumers (particularly low- and moderate-income individuals), civil rights groups, community groups, consumer advocates, and the Consumer Advisory Board about this matter;
``(II) identify subject matter experts within the Bureau to work on the issues identified under subclause (I);
``(III) lead coordination efforts between other Federal departments and agencies to better assess the reasons for the lack of, and help increase the participation of, under-banked, un-banked, and underserved consumers in the banking system; and
``(IV) identify and develop strategies to increase financial education to under-banked, un-banked, and underserved consumers.
``(ii) Coordination with other bureau offices.--In carrying out this paragraph, the Office of Community Affairs shall consult with and coordinate with the research unit established under subsection (b)(1) and such other offices of the Bureau as the Director may determine appropriate.
``(iii) Reporting.--
``(I) In general.--The Office of Community Affairs shall submit a report to Congress, within two years of the date of enactment of this subparagraph and every 2 years thereafter, that identifies any factors impeding the ability of, or limiting the option for, individuals or households to have access to fair, on-going, and sustainable relationships with depository institutions to meet their financial needs, discusses any regulatory, legal, or structural barriers to enhancing participation of under-banked, un-banked, and underserved consumers with depository institutions, and contains recommendations to promote better participation for all consumers with the banking system.
``(II) Timing of report.--To the extent possible, the Office shall submit each report required under subclause (I) during a year in which the Federal Deposit Insurance Corporation does not issue the report on encouraging use of depository institutions by the unbanked required under section 49 of the Federal Deposit Insurance Act.''.
SEC. 3. DISCRETIONARY SURPLUS FUNDS.
(a) In General.--The dollar amount specified under section 7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is reduced by $10,000,000.
(b) Effective Date.--The amendment made by subsection (a) shall take effect on September 30, 2031.
SEC. 4. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Missouri (Mr. Cleaver) and the gentleman from Arkansas (Mr. Hill) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
{time} 1230
General Leave
Mr. CLEAVER. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and insert extraneous materials thereon.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Missouri?
There was no objection.
Mr. CLEAVER. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I thank Representative Scott for his leadership on this legislation, the Financial Inclusion in Banking Act.
This bill would direct the Consumer Financial Protection Bureau's Office of Community Affairs to identify causes leading to, and solutions for, underbanked, unbanked, and underserved consumers.
The office would be required to share its findings in a report to Congress every 2 years and coordinate with other Federal agencies to increase financial education. Through these new requirements, this bill would provide important information about unbanked and underbanked consumers and ultimately help drive solutions that can decrease the reliance on predatory financing products, like payday loans.
According to FDIC's latest survey from 2019, more than 7 million American households, or roughly 5.4 percent, are unbanked. However, the survey was taken before the pandemic, and the agency noted it would likely result in an increase in the unbanked rate.
Even some individuals and families that may have a bank account still end up utilizing other forms of credit, like a pawn shop or payday loan, which are typically more expensive than bank credit. Nearly 5 percent of all households utilize these products, but again, these are prepandemic numbers, and we know millions have lost their jobs and may turn to these other forms of credit.
Moreover, access to traditional banking accounts is one way to expeditiously deliver government stimulus deposits to individuals and families that need help quickly.
Access to banking is a racial justice issue, as well. According to the FDIC's prepandemic data, 13.8 percent of Black households and 12.2 percent of Latinx households are unbanked, compared to just 2.5 percent of White households.
Everyone deserves access to safe, reliable, and affordable banking options in order to grow their savings, build credit, and conduct financial transactions in a secure way. This bill would be an important step in achieving that goal.
For these reasons, I urge my colleagues to support this bill, and I reserve the balance of my time.
Mr. HILL. Madam Speaker, I yield myself such time as I may consume.
I thank the gentleman from Georgia (Mr. David Scott) for introducing this bill, which has been bipartisan for several Congresses.
According to data from the FDIC's survey of unbanked and underbanked households, 5.4 percent of U.S. households were unbanked in 2019. This means no one in the household had a checking or savings account. This translates, Madam Speaker, into 7.1 million American households that don't have that simple, straightforward needed access to a checking or savings account.
While this is the lowest percentage rate since the FDIC began conducting that survey back in 2009, the number of unbanked and underbanked families is still disturbing.
These statistics point to a staggering number of Americans who have limited or no access to traditional banking services. When I was in community banking before coming to Congress, there was nothing more empowering than having connection to and access to that financial system so that you can save for college, buy a home, acquire that first car that you have dreamed of, or just conduct your household's financing.
So, over the years in Congress, I have supported efforts to improve financial literacy, particularly with my friend, Dr. Foster. As a banker, I certainly worked with volunteers, helping families understand the financial system and how they could have banking access. This is a key issue that both the private sector and the public sector work on, on a regular basis.
Mr. Scott has suggested that the Consumer Financial Protection Bureau's Office of Community Affairs continue to engage in these efforts and examine how to improve this situation.
The Office of Community Affairs also partnered with the CFPB's Office of Research and the Office of Fair Lending to examine credit deserts, where we don't even have access to financial services, and better equip communities with the tools for financial education.
Additionally, the Bureau's Your Money, Your Goals program offers a variety of materials to help consumers pursue financial empowerment and resources for organizations aimed at helping financially vulnerable individuals and families.
This is a key issue and, particularly in my rural State, a bigger challenge for rural counties, as we have some counties without a single financial services office.
Despite the progress that has been made, credit invisibility remains an important issue, especially given the pandemic's impact on American consumers.
By further directing the CFPB's Office of Community Affairs to focus its work on the underserved, we are working to ensure those consumers are not overlooked.
This bill reaffirms our goal in understanding credit invisibility and identifying better solutions to deliver resources.
All Americans deserve access to basic financial tools that will help them achieve their financial independence, their pursuit of happiness. This bill takes an important step in promoting financial inclusion and providing access to all Americans.
I thank my good friend from Georgia (Mr. David Scott), who is approaching the microphone, for his work on this bill, and I thank my friend, Mr. Cleaver, for leading today. I urge my colleagues to support the Financial Inclusion in Banking Act, and I reserve the balance of my time.
Mr. CLEAVER. Madam Speaker, I yield 2 minutes to the great gentleman from Georgia (Mr. David Scott), who is the sponsor of this legislation.
Mr. DAVID SCOTT of Georgia. Madam Speaker, I thank the gentleman very much for yielding. I thank my distinguished Republican colleague for his very fine comments.
Madam Speaker, this is one of our most important bills because it is happening at a time when so many of our people are facing such ravaging financial problems and concerns.
Since the passage of Dodd-Frank, which I worked hard on, as many of you did, and the creation of the Consumer Financial Protection Bureau, we charged that agency with ensuring that consumers have access to safe, accessible, and affordable financial products.
Yet, Madam Speaker, do you know that we still have 7.1 million of our American citizens who are unbanked, relying on pawn shops and payday lenders to get by? As this past year has laid bare, many families are just one crisis, one sickness, one broken vehicle, one emergency from absolute financial devastation.
Without support from regulated, legitimate financial institutions, these consumers are forced to turn to predatory lenders and unsound products. They are at the mercy of some of the most unscrupulous characters we know.
Our bill is a very strong bipartisan bill, which the gentleman from Arkansas has articulated well.
Madam Speaker, with this bill, we will prioritize the most underserved and unbanked persons across our great Nation, and we will be taking the first step toward improving access and affordability in banking for all of our American people.
I urge my colleagues everywhere to give this a unanimous vote on the floor later today.
Mr. HILL. Madam Speaker, I yield such time as he may consume to the gentleman from Ohio (Mr. Davidson), a distinguished member of the House Financial Services Committee and, as of today, the ranking member on our Fintech Task Force.
Mr. DAVIDSON. Madam Speaker, financial inclusion is very important, and I appreciate the bipartisan spirit that this bill was worked through in our committee.
Frankly, not all things have moved through Congress in a bipartisan fashion this year. Frankly, it has been a little more rare than normal. And, frankly, a lot of things in our committee, they haven't been as bipartisan as we would like. This is something that has moved through our committee in that fashion.
I appreciate the work my colleagues on both sides of the aisle have put into this, and I look forward to the work that comes out of it at the CFPB.
I think, as we approach fintech today, we have the opportunity to improve financial inclusion for more people, particularly the unbanked and underbanked. But its characteristics have to be permissionless.
In the same way cash is so vital for the unbanked and underbanked, as we apply technology, it has to be where people aren't dependent upon a third party to be able to get permission to move the money that they have earned between parties. There are people who want to use the power of central bank digital currencies or other means of control in our financial system to essentially say: You are not going to bank those people, are you?
Sadly, our Nation has a history of this. So, I look forward to the work that comes as a result of this. I encourage all of my colleagues to support this bill.
Mr. CLEAVER. Madam Speaker, I reserve the balance of my time.
Mr. HILL. Madam Speaker, I appreciate my friend from Ohio (Mr. Davidson). He spoke to this issue of fintech, which I think is very important and has the ability to actually open up doors for underbanked families and unbanked families at a lower cost and a more accessible way through smart technology. I think that is going to be important.
I thank, again, my friend from Georgia for his work on financial literacy. As a great Wharton graduate, he knows a lot about financial literacy, and I am proud that he shares it with all of our citizens and families across the country.
Madam Speaker, I urge my colleagues to support this bill, and I yield back the balance of my time.
Mr. CLEAVER. Madam Speaker, I yield myself the balance of my time.
I thank the Hill-Scott combination for this legislation. It also is, I think, a testament to what we can do if we work together.
The Financial Inclusion in Banking Act, led by Representative Scott, would provide essential information on unbanked and underserved customers, as well as identify potential solutions to the reliance on unconventional financial products, which often lead to predatory lending and cycles of being trapped in debt.
Communities of color have been excluded from the traditional economic system due to historical discrimination. All consumers deserve access to less expensive and more secure mainstream financial products.
The House passed identical legislation unanimously by voice vote in October 2019, and I urge Republican and Democratic Members to join me in supporting this bill again.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the gentleman from Missouri (Mr. Cleaver) that the House suspend the rules and pass the bill, H.R. 1711, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds being in the affirmative, the ayes have it.
Mr. DAVIDSON. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 8, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this motion are postponed.
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SOURCE: Congressional Record Vol. 167, No. 86
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