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  • OCC marks first anniversary of financial inclusion project

    Federal Issues

    On July 15, the OCC marked the one-year anniversary of Project REACh, an initiative launched by the agency last year to promote greater financial inclusion of underserved populations. As previously covered by InfoBytes, Project REACh (Roundtable for Economic Access and Change) brings together leaders from the banking industry, national civil rights organizations, and various businesses and technology organizations to identify and reduce barriers to accessing capital and credit. While the project’s scope in its first year included a national workstream and a regional effort centered on Los Angeles, acting Comptroller Michael Hsu announced that Project REACh will soon expand its regional focus to Washington, D.C., Dallas, and Detroit in order “to replicate the success of the project’s national workstream.” In prepared remarks, Hsu emphasized that addressing economic inequality needs to be “transformational, not transactional,” pointing out that “the financial system can perpetuate inequality” as “traditional credit scores, traditional overdraft practices, and predatory lending make it expensive to be poor, while wealthy clients can borrow and access a wide range of financial services at lower cost.” Hsu explained that Project REACh’s structure and approach allows for collaborative problem identification and problem solving and creates opportunities for business and community representatives to incubate ideas and pilots “that can later be implemented on a broader scale than possible by any one institution.”

    Federal Issues OCC Underserved Consumer Finance

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  • OCC launches Project REACh to help underserved populations access capital and credit

    Federal Issues

    On July 10, the OCC launched an initiative to promote greater financial inclusion of underserved populations. Project REACh (Roundtable for Economic Access and Change) brings together leaders from the banking industry, national civil rights organizations, and various businesses and technology organizations who will identify and reduce barriers to accessing capital and credit. REACh program participants will focus on “inherent policy and structural issues at the national and local levels” to expand financial inclusion, and convened on July 10 to discuss which financial inclusion projects to address.

    Federal Issues OCC Underserved Consumer Finance

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  • CFPB issues interpretive rule on determining underserved areas

    Agency Rule-Making & Guidance

    On June 23, the CFPB issued an interpretive rule to provide guidance for creditors and others involved in mortgage origination on the CFPB’s process for determining which counties and areas are considered “underserved” for a given calendar year. This interpretive rule supersedes certain parts of the official commentary to Regulation Z that became obsolete when HMDA data points were replaced or otherwise modified by the 2015 HMDA Final Rule. Lenders use the CFPB’s annual list of rural counties and rural or underserved counties when determining qualified exemptions to certain TILA regulatory requirements, such as “the exemption from the requirement to establish an escrow account for a higher-priced mortgage loan and the ability to originate balloon-payment qualified mortgages,” and use the CFPB’s Rural or Underserved Areas Tool to assess whether a rural or underserved area qualifies for a safe harbor under TILA’s Regulation Z. Under the interpretive rule, the CFPB will determine whether an area is considered “underserved” by counting first-lien originations from HMDA data from the preceding calendar year. The interpretive rule also discusses certain “covered transaction” exclusions that will not be counted related to (i) construction methods and total units; (ii) open-end lines of credit and reverse mortgages; (iii) business or commercial purposes; and (iv) demographic information where both the applicant’s and co-applicant’s ethnicity, race, sex, and age are all reported as “not applicable.” The interpretive rule is effective upon publication in the Federal Register.

    Agency Rule-Making & Guidance CFPB HMDA TILA Regulation Z Underserved

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