FRISCO, Texas–NCUA Board Member Rodney Hood outlined for credit unions here where he sees opportunities for CUs and fintechs to partner to build and improve financial inclusion.
Hood told the VentureTech event here sponsored by Curql that he has spent much of the past three years speaking repeatedly on the promise of financial technology, urging CUs to look closely at fintech, “because these tools have the potential to revolutionize our approach to financial services.”
Instead, said Hood, with his position on technology clear he wanted to address another issue that’s “very much at the center of my agenda as a regulator, which is financial inclusion for under-served and marginalized communities.”
Constructing working relationships between fintech providers and credit unions, Hood said, “could be an incredibly powerful weapon in the effort to boost financial inclusion here in the United States as well as globally.”
Not Just ‘Lip Service’
“You might have heard me say that financial inclusion is the civil rights challenge of our generation, and I’ve urged financial services industry leaders to take up that challenge,” said Hood. “And I don’t just mean paying lip service to the ideal, or treating it as a charitable box to be checked, or dropping in a few paragraphs on inclusion to fill out the back pages of an annual report. I’m talking about actively working to put financial inclusion at the center of the organizational mission.”
Hood said inclusion is just good business that creates opportunity and jobs, and strengthens families and communities.
Other Points Made
Among other points made by Hood during his remarks:
-
Affordable credit, promoting home ownership and small business entrepreneurship; helping families to save for a college education or retirement
“are the tools of financial inclusion that can help people achieve greater independence, autonomy, and dignity in their lives.” - Inflation and the threat of recession are “ interlocking dynamics that represent a serious challenge to a great many CU members and their families. “While we’ve made progress at expanding the circle of financial inclusion, I’m concerned we may lose ground if the economic conditions grow more foreboding.”
- Fintech providers are seeking to have a positive social impact. “And here again, this is an area where I believe credit unions and fintech providers can work together constructively, because that community-based mission of service and social impact is embedded in the very DNA of credit unions, unlike other financial services providers.”
- Fintechs should be asked critical questions, including “Have they thought through the challenges related to data security and consumer privacy, and do they have adequate protections in place? Is what they’re pitching consonant with your institution’s existing compliance responsibilities under Know Your Customer and the Bank Secrecy Act requirements, as well as other pertinent regulations? Are the algorithms powering their products and services helping to promote equity and inclusion, or do they simply reinforce old biases?”
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