Acting OCC Comptroller Calls for Revitalization of CDFIs and MDIs

Acting Comptroller of the Currency Michael J. Hsu called for the revitalization of Community Development Financial Institutions ("CDFIs") and Minority Depository Institutions ("MDIs"), highlighting their important role in providing capital, credit, loans and other banking services to minority and low-to moderate-income ("LMI") communities.

Mr. Hsu asserted that CDFIs and MDIs are needed now more than ever, arguing that minority populations are twice as likely not to have bank accounts and low income adults are more likely to pay overdraft fees on insufficient balances "lead[ing] unhappy and unbanked customers to turn to high-cost payday lenders that can trap them in endless cycles of debt." Mr. Hsu also emphasized that LMI communities struggle with a large racial wealth gap, which he said was exacerbated by the housing shortage and the pandemic.

To combat these issues, Mr. Hsu proposed:

• expanding Project REACh, an initiative designed to help "reduce the barriers that prevent full, equal and fair participation in the nation's economy," through encouraging larger banks to pledge capital investments to revitalize MDIs, among other things; and

• updating the Community Reinvestment Act to strengthen provisions that incentivize investment in MDIs and CDFIs and support activities undertaken in cooperation with those institutions (see related coverage).

Additionally, Mr. Hsu stated that the OCC opted to renew the charter for the Minority Depository Institutions Advisory Committee to further the OCC's mission to ensure fair access to financial services and homeownership opportunities for all.