Earlier this Summer U.S. Rep. David Scott (D-GA) introduced H.R. 4067, the Financial Inclusion in Banking Act, meant to protect the nation’s financially underserved and protect them from “alternative financial services” such as predatory lenders, pawn shops, and title loans.
The legislation, cosponsored by Rep. Sean Duffy (R-WI), would empower the Consumer Financial Protection Bureau’s (CFPB) Office of Community Affairs to lead coordination within the Bureau, and also work with other federal departments and agencies, trade associations, and civil rights groups in investigating strategies to improve participation in the traditional banking system. The CFPB would make a report to Congress within two years, and biennially thereafter, highlighting legislative and regulatory recommendations to promote participation in the traditional banking system.
According to a 2017 study from the FDIC, 25.2% of American households are either unbanked or underbanked. African-American communities are the most under-banked in the nation, with only 45% of black households are “fully banked,” meaning they have a checking account and have not relied on alternative financial services in the past year.
On Friday the Financial Services Committee voted 55-0 to advance the bill to the House floor for a full vote. It will be expected to pass there as well, though in Washington there are of course few sure things.
Said Scott on the bill’s passage out of committee, “When families and consumers are excluded from traditional avenues for accessing financial services, the impacts are far-reaching. Low-income consumers frequently pay more in fees and penalties, even for simple services like cashing a check. This simply is not workable. This bipartisan bill shines a light on the importance of financial inclusion, and I look forward to working with my colleagues in the House of Representatives to ensure that all Americans have access to safe and affordable banking services.”
