Home Topics Real Estate The new program is designed to help build wealth in color communities

The new program is designed to help build wealth in color communities

The REACh project aims to eliminate economic disparities that hinder wealth creation in underserved communities by supporting community banks.

This syndicated article first appeared in the Baltimore Times on December 22, 2020, and was republished with the permission of the author.

Given the blunt reality that home ownership is largely inaccessible for some 45 million Americans without usable credit scores, the Office of Currency Auditors (OCC) recently launched the Round Table on Economic Access and Change (Project REACh) to address this issue other economic differences that hinder wealth creation in color communities.

The REACh project was originally conceived after the widespread social unrest that followed the assassination of George Floyd in Minneapolis last May, said Andrew Moss, director of public affairs for minorities at the OCC’s public affairs office.

“We realized,” said Moss, “that much of the unrest is due to the lack of full participation of color communities and other underserved communities in the economic system.” By that I mean that they are not given the same opportunities as others, not only on a social level, but also on an economic level. “

The main focus of the REACh project is to facilitate relationships between large financial institutions, civil rights organizations, financial technology companies and minority depository institutions (MDIs). Organizations committed to partnering with the OCC on this initiative include Citibank, Flagstar, Huntington, Texas Capital, Wells Fargo, JP Morgan Chase, the NAACP, the National Urban League, Operation Hope and Credit Karma.

“We are creating opportunities,” said Moss, “for MDIs to attract investment, and through those investments we are helping them build their infrastructure so they can offer the same suites of services and financial products that others have had the opportunity to benefit from . ” Country.”

MDIs are defined by the Federal Deposit Insurance Corporation as banks and other financial institutions that are either owned or primarily managed by African American, Asian American, Hispanic American, or Native American. There are around 140 such facilities in the United States, according to Moss

By working with these stakeholders, the OCC hopes to put the technology together to bridge both the digital and economic divide.

One focus, Moss said, is on those who are considered “credit invisible”. The participants in the REACh project are developing a new credit decision tool that extends the traditional structure of credit reporting.

“The effort is looking at alternative data such as direct debit authorizations and other types of payments that traditional credit scoring doesn’t take into account,” Moss said. Timely and regular payments from rental and subscription services such as Netflix expand the evaluated data, so that more people are classified as creditworthy.

Derrick Johnson, President and CEO of NAACP, said of the REACh project: “We look forward to working together on solutions to systemic and institutionalized economic discrimination that has existed for decades.”

“With black home ownership, middle household wealth, and access to capital sinking like a rock, we need to look seriously at dismantling the systems that keep black and other underserved communities away from the American dream,” said Marc Morial, president and CEO of the Urban League.

“We commend the OCC’s efforts to find solutions to the unprecedented economic loss caused by this pandemic,” added Morial.

When asked what role politics could play in launching the REACh project if the nation moves from the Trump administration to the Biden administration, Moss was optimistic.

“I don’t see Project REACh as a political initiative, but rather as a non-political or bipartisan effort to support communities in need of these types of resources,” said Moss. “I haven’t seen anyone say anything negative about trying to help people who need the kind of support that we want to provide through Project REACh.”

Christopher G. Cox is the editor and managing editor of realesavvy.com.

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