so students from low income families can get the tools they need to be ready for anything.

this discussion was held during the national community and reinvestment coalition conference. first up is martin the chairman of the federal deposit insurance corporation. we know it as fdic. the fdic is vital to making the whole american economy run. this is the agency tasked with maintaining stability and confidence in our country's financial system by ensuring our deposits and by examining and supervising the financial institutions for safety and soundness and consumer protection. and for us in this room that means chairman gruenberg is vital to making sure the american economy runs while for everybody. [applause] we are talking about the have-nots as well as the have's. so i'm excited to hear what he has to tell us. please join me in welcoming to

the stage the fdic chairman martin. >> good morning, everybody. and thank you, bethany, for that kind introduction. thank you for getting up early to participate in the session and let me begin by thanking the national community reinvestment coalition and you're very outstanding president for inviting me to take part in the economy conference. let me say for over 30 years as you well know, the national community reinvestment coalition

has been a tireless advocate for economic opportunity in america through a range -- [applause] [laughter] through a range of community development activities at the local, state, regional and national level near 700 member organizations have made an enormous impact improving the quality of life for millions of people in the country and let me begin by saying a word of thanks to all of you for what you do. in particular, you have been perhaps the leading voice in the country for the community reinvestment act, which since its enactment in 1977 has been the foundation for access to credit, investment and basic

banking services on a responsible basis for low and moderate income communities and communities of color in the united states. let me be clear that the purpose of the new rule issued or the federal banking agencies to adapt to the changing nature of the banking business and to strengthen its provisions to carry out its critically important public purpose, and we are firmly committed to the support of the rural and believe it is entirely consistent with the statute. [applause] i would like to take the opportunity this morning to talk about a subject that is a core

objective of an crc, cra and the fdic and the subject is economic inclusion and access to the banking system of the united states for everyone who lives in this country. the fdic is releasing today its new economic inclusion strategic plan to guide our efforts to expand access to the banking system to all. [applause] the occasion of your just economy conference seems like an opportune moment to discuss this topic, which is so central to our common goals, so let me begin. federally insured bank accounts

are fundamental to the ability of individuals and families to participate in and fully benefit from the opportunities created by our economy. having a banking relationship provides households with of the ability to securely and conveniently receive and hold funds including through direct deposit. it enables consumers to pay bills and make purchases with confidence while benefiting from protections that guard against risks such as those arising from unauthorized transactions. these and other protections, including of course fdic insurance, are available to consumers automatically when they open a deposit account by operation of law.

they can't be waived or eliminated in pursuit of other objectives that they are part and parcel of what it means to have a bank account. un- banked consumers, that is those without an insured account are not always assured of such protections when they turn outside of the banking system. they may incur costly fees associated with non-bank services such as check cashing and bill payments. they may have difficulty accessing credit and find it only available on unfavorable terms. finally, those without bank accounts that hold cash at home expose themselves and their families to risk, risk of theft, accidental loss or other

misfortunes. un- banked consumers also miss out on important opportunities enjoyed by those in the banking system. a banking relationship allows customers to gain access to savings accounts, to establish credit and to borrow, to facilitate month to month needs to acquire key assets like a car and make longer-term investments such as in-home ownership or entrepreneurial pursuits. for many, a banking relationship is an important step towards achieving financial stability and securing a future for themselves and their families. let me make this point. more than 99% of households with a home loan have a bank account

more than 99%, and that's not a coincidence. despite the advantages of the banking relationships, not all members of the public have shared in these benefits. as a result back in 2006, the congress tasked the fdic with responsibility for conducting relevant research on questions such as the size of the market and strategies for promoting economic inclusion. in doing so, the sponsor of that legislation offered a vision of a market in which, and i quote, all major depository institutions will look at the un- banked minority families as a business opportunity and

aggressively attempt to include them in the conventional finance system. to address the research mandate from congress, the fdic established its national survey of un- banked and under banked households conducted every two years beginning in 2009 in partnership with the census bureau this survey has been foundational to our understanding of this issue. it measures household participation in the banking system and identifies opportunities to expand economic inclusion. it provides data not only at the national level, but for all 50 states and dozens of larger metropolitan areas. critically, and i really underscore this point, it's a large sample size allows us to

analyze how experiences vary across the population and to break down banking access demographically which is a critical slide to understanding this issue. the initial surveys identified important challenges and provided an authoritative set of data to guide economic inclusion efforts. we found for example that in 2011, 8.2% of u.s. households were on banked lacking a checking or savings account at a federally insured institution. we also found over 20% of households were under banked meaning they had an account but also used non-bank products and services to meet basic financial

needs. the latter measure helped to demonstrate that banks have additional opportunities to meet the needs of established customers to deepen their connection to the banking system. with 28% of households in 2011 being on banked or under banked, the results revealed they were well served by the u.s. banking system. the survey revealed that when broken down demographically, un- banked rates in the united states were much higher for some. of 21.3% of black households, 20.4% of hispanic households, 22.7% for american indian or alaskan native households and

19.4% of households earning less than $30,000 a year were on banked compared to 8.2% of the general population. we did not know this with certainty until this initial survey was done. in addition, 18.9% of working age households with a disability were determined to be on banked as were 25.5% of single-parent households and the survey also provides a line of sight into the reasons households give for not holding a bank account. common reasons have included is simply not having enough money to meet at the minimum balance requirements, concerns about high and unpredictable fees and

the lack of trust in banks. so, to address the challenges and guide its work, the fdic established its first economic inclusion strategic plan in 2010. among other initiatives, the plan specifically calls for the development of a prototype of faith transactional accounts and emphasized the importance of affordable easy to understand products that were not subject to unfair or unforeseen feats. which were an obstacle to many households and turning the banking system. in april of 2012, the fdic published a report on its model safe accounts pilot detailing the positive experiences of

financial institutions and consumers in a trial of products and patterns on the fdic model safe accounts template. of these accounts were electronic, debit-based, debit card based accounts with low or no minimum balance requirements, low or no monthly fees, and were structured to eliminate the risk that households would incur, overdraft or insufficient fund, no overdrafts. while very few institutions offer to such accounts at that time, today they are widely available. [applause]

at least 340 banks are offering such accounts. these banks hold about two thirds, two thirds of all domestic deposits in the united states. the data contributed by 35 of the banks offering these accounts was collected and analyzed by the federal reserve bank of st. louis. analysts reported that more than 17 million of these accounts have been open across 87% of the u.s. zip codes and more than $120 billion deposited into these accounts in 2022 alone. they also reported that 85% of the accounts opened in large banks were for customers that were new to the institution. a survey combination of four factors have been critical to

the success of these accounts. first, they are simple to understand, simple to use and remove key risks that many consumers had previously cited as barriers. a second, what's good for the customer has actually proven to be good business for the bank as multiple banks explained it to the fdic advisory committee on economic inclusion, improved customer experiences lowered the cost of servicing the accounts and improved customer relationships. third, customers have become less reliant on checks over time and more easily perceived significant value in these accounts and forth particularly with regards to unbaked populations, local networks,

local networks, financial institutions and public agencies across the country commonly referred to have worked to certify that account, meet the national bank on standards and connect consumers with them and they remained consistent with the core principles of the fdic the fdic for its part helped the banks learn more about how these kind of accounts might benefit the communities into to consider how they might go about offering such a product. it's also to make americans aware of the opportunity to open these accounts. during the covid-19 pandemic, the fdic partnered with the irs to help consumers without bank

accounts identifying open accounts designed to make their needs. many were especially motivated to open an account to be able to receive the public support payments made available during the pandemic and a secure and timely manner. in fact, our 2021 household survey revealed one third of all u.s. households that have recently become banked reported doing so in connection with an economic impact or similar statements. this finding has helped highlight the potential advantages that prompt consumers to consider opening an account when they are anticipating a payment or other income and is what we call bankable moments

where the consumer's receptor is receptivefantasies in immedio open an account to learn from and to take to heart. last year the fdic worked with the treasury department with inserts detailing the benefits of opening a bank account along with 6.2 million federal checks already being sent to households. the partnership is continuing this year and we believe the message is getting through the fields we've experienced significant content for granting us and graces and visits to the webpages containing information on how to open an account. so let me fast forward to today. taking stock of where we are now, i can report that over the decade ending in 2021, the un-

banked rate has fallen in the united states by nearly half from 8.2% to 4.5%. the decrease among the populations that have historically had higher rates was also pronounced and let me share those with you. it declined from 21.3 to 11.3% during this period. the hispanic rate of decline from 20.4 to 9.3% for those earning less than 30,000 per year, the rate went to 13.5 and for working age households with a disability, the un- banked rate dropped from 18.9 to 14.8%.

for single parent households the un- banked rate fell from 25.5 to 14.9 and for american indian and alaska native households, the results also were encouraging but given the relatively small survey sample for this group, we are going to need to continue to monitor those results. in addition to these improvements, and i think this is interesting, we have also seen substantial decreases in the non-bank transaction products to drive the surveys under banked and as you know, those products are often higher cost than consumers receive from banks. many factors are no doubt influencing these trends. certainly the aggregate efforts

of the local coalitions working with consumers, as well as financial institutions offering responsive products and the efforts of the fdic and many aligned organizations have been important and have value. i should also acknowledge other developments including historically low unemployment rates and availability in the use of devices that can make banking accessible and convenient also helps drive the rate down. as encouraging as the results have been, we are mindful that they are not assured going forward while the design of the accounts should make it easier for households to sustain any increase in unemployment from current historic lows will

likely put upward pressure on the rate. in addition, consumers face an increasingly complex set of choices in the marketplace as you all well know. these include options from the nondepository firms that on the surface may resemble banks even if they lacked certain protections and may not offer all the benefits of the banking relationships. they've proven popular with consumers and the continued support of the leaders of these institutions will likely be important to ensure these accounts. releasing the strategic plan to guide the efforts to expand and

support consumers participation in the banking system. the plan seeks to have households use the banking relationships to achieve financial stability and a more secure financial future and also expand some previous plans by specifically addressing the opportunity for the banking system to do more to contribute more to the development of the strong communities. we continue to believe that ensuring all consumers have access to products and services from banks that are responsive to their needs and is integral to the achievement of these objectives. at the opening of the insured account helps households establish and on-ramp to the financial system and to set the stage for the future financial success including by establishing a positive credit

history and making use of the consumer credit from banks on a responsible basis. one promising development along these lines can be seen as small dollar loan programs developed by some institutions. these programs typically provide established account holders the opportunity to borrow small amounts of money and affordable rates and to repay them over a reasonable timeframe. it makes sense the banks would find it easy to extend credit to account holders since they have the benefit of being able to observe their income and financial management practices and account data. while credit is important, so is savings. in response to a 2020 survey from the federal reserve, only 63% of adults said they would

cover a hypothetical 400-dollar emergency expense exclusively using cash for its equivalent, and for 18%, the largest expense they could cover with savings was $100 which tells you how close to the margin. to address these concerns, the fdic plan helps households achieve financial stability through the establishment of positive credit histories and the use of consumer credit from banks along with insured savings accounts and to achieve longer-term security the plan identifies mortgages and small business lending from banks important to build household wealth. and perhaps the biggest change

the new plan specifically calls for the gifted ic to take steps to encourage bank lending investments and services that support strong and healthy communities including low and moderate income and other neighborhoods and underserved communities. this would include related investments with a broad range of objectives including affordable housing and opportunities to growing risks and climate change. while the fdic has long thought to support of the bank's community development efforts, the explicit connection to its economic inclusion work is new and entirely appropriate. stated plainly the plan recognizes the banks are unlikely to succeed in their efforts to build trusted

relationships with households. if they are otherwise neglecting to make investments that strengthen the communities in which those households live and work the fdic uses a variety of strategies to pursue these objectives. we conduct research for a common understanding of the challenges through the nationwide community affairs program staff. we perform outreach to bankers to provide resources and support so they consider how their institution can expand participation in the banking system and serve their communities to produce financial education resources and communicate the benefits of having an insured account to consumers. finally, we work with community-based organizations that share the vision of the banking system that is responsive to the needs of families and communities.

before i conclude, i specifically want to observe some of the ways in which the newly adopted community reinvestment act rule would provide banks the opportunity to receive credit for their efforts to expand economic inclusion. it's specifically recognized consumers should have access to products and services that are affordable and responsible to their needs. it would help to expand recognition with a variety of community development activities. for the financial institutions the minority department institutions and these institutions have a particular role in expanding access to the banking system for underserved communities. a banking system that is responsive to the need of

consumers and communities in these ways is an inclusive system and a system that mirrors the public confidence and support and lays the groundwork for its future success. so in conclusion, the fdic's economic inclusion and strategic plan seeks to help consumers use banking relationships as a vehicle to establish financial stability, build wealth and secure a financial future for themselves and their families. it commits the fdic to supporting bank efforts to strengthen communities and a ina range of community development activities. and let me be clear fdic recognizes it will not succeed with a go it alone approach. the support of other federal, state and local agencies with

community-based organizations, local leaders, bankers, educators and others is critical. so if i may, may be make a pitch to you all. if the outcomes we are seeking here are aligned with your objectives, i sincerely invite you to contact the fdic, to contact one of our regional managers in the nationwide community affairs program to explore and talk about how we might be able to work together. if you are developing or revisiting your own a strategies and want to learn more about our work and approach the economic inclusion, please consider visiting the website where you can read the new strategic plan and engage with our research and data. and finally, if i may, let me

once again thank the national community reinvestment coalition and all of you who are here today for what you do. i want you to know how much we appreciate your efforts and how important they are and from my standpoint what a privilege it is for me to have the opportunity to speak to your annual conference today and to be inspired by your leadership. thank you all very much. [applause] i want people to understand the critical leadership role.

we certainly wouldn't have gotten done on this timeline and we appreciate your efforts and leadership there. i know you've spoken in public about the new rule on a number of occasions but with specific regards to the issues in your speech, the inclusive banking, your hopes and dreams and expectations for how it was going to move us forward on those issues. it's a base of the economic inclusion. it's about encouraging banks to serve all the communities in which they do business including low and moderate income. that is what the statute is all

about. that is what the cra the unique law from its inception most federal statutes in the consumer area try to prevent banks from doing bad things. it's about encouraging banks to do good things, to do business and serve all the communities in which they are engaged and i think this new rule as i indicated in my speech is fundamentally about adapting to the rapidly changing nature of the banking business. it was essential in order to make them relevant for the next generation to do this rule and at the same time to strengthen the provisions to make it even more impactful. access to credit and investments

and basic banking services to every community in the united states including low and moderate income communities and communities of color which historically as you all well know have lacked access to the banking system so we view this as i indicated as critically important and we are very committed to it. we propose new bank merger guidelines and we don't really in this country re-examine it every so often though i've personally proposed that we do so so the charters are really something that of course you have to comply with the laws. there are ways in which the merger process is a time when the question of how well the bank community comes up and you

issued strong guidance that gets at really demonstrating how the public will benefit and also demonstrating a much more affirmative way through the application the adverse effects of the merger branch closures. can you talk about the thinking? >> thank you for asking about that. they've had a statement of policy on the bank mergers that lays out how we review bank mergers under the statutory factors required to follow under the bank merger. the industry has changed dramatically in that time so it's necessary for us to take a look at how we review and

consider the bank merger applications under the act and to provide more clarity and guidance as to how those reviews are done and there are critical statutory factors that we look at and we've made some meaningful changes to those and i will take those off because i think they are relevant to the question that you raised. one, we have to consider the impact of the merger on competition in the markets in which the two proposed banks in the past and the key thing we looked at was a concentration of deposits and the control of deposits in the local markets but we have not in the past looked at concentration of assets which is obviously also a

critical factor considering is there real competition in the local market? one of the changes we make in the statement of policy is to consider concentration for the bank assets which is mortgages were small business loans in the market in addition. a second factor is called managerial resources and future prospects, which is short-term for safety and soundness. under the new policy, we want to see the institution from the standpoint of the banking system is not going to be weaker than the institutions that are seeking the merger not a weakening as a result of the merger and the direct response

to the questions we are required under the law to consider the impact of the merger on the convenience and needs of the communities in which the two banks are doing business. and under our proposed statement of policies the merging banks would have to show how the institution would better serve the needs of the local communities not simply sustaining what's been done in the past but better serve the needs and would include consideration of the performance but other compliance factors and we think this is a critical component of the policy. then finally, and i think this goes to some additional concerns you have, there's a financial

stability factor that is relatively new that was active in the dodd frank act in 2010 that requires us to look at the impact on financial stability of the proposed merger. in light of the experience of last year with three failures of the regional banks, any merger that results with assets over $100 billion would receive increased scrutiny and in addition, and i know this is a point of particular concern, any bank merger that would result in assets over 50 billion were would be the subject of multiple challenges would be required to have a public hearing held.

[applause] to ensure public accountability and transparency for the composed merger. taken together, and we believe these are a thoughtful and a reasonable set of proposed adjustments that will strengthen our review of proposed mergers and provide greater clarity and guidance both to the industry and to the interested public and by the way the comment period is now open and we certainly would hope to hear from you as well as all other interested parties. thank you. that's our time. another round of applause. [applause]

thanks again, mr. chairman and jesse for those thought-provoking questions. and i'm especially grateful for the chair man's invitation and reminder to you about how important it is to comment when they ask for comments send them in. even when they don't, if you've got something to say, let them know. from a different perspective, a different vantage point within the federal regulatory system that's so vital to us all. at the acting comptroller of the currency. the controller of the currency as we know it is to ensure that

all national banks and federal savings associations operate in safe and sound manner, provide fair access to financial services, treat customers fairly and comply with applicable laws and regulations. you will get a clear sense of the impact of the office of the comptroller of the currency and the impact on the communities that we serve. please give a big welcome to the acting comptroller. [applause] good morning. >> one more time. good morning. thank you for having me back. i remember doing this last year

and walk-up music to metallica. [laughter] first of all, i am deeply honored to join you today for the conference and last year i spoke about elevating fairness is a top priority for the occ. and i am proud a set of that commitment continues. today i want to highlight seven developments since we last met as well as look ahead and share some thoughts on artificially and fraud. last month i highlighted the commitment to promoting a safe, sound and fair bank overdraft protection program. shortly after april 2023, the occ released guidance based on the supervisory experience to assist banks managing the various risks associated with overdrafts. the guidance identified two practices authorized double

negative and that may result in heightened risk exposure. and also the pro consumer practices that banks can employ to strengthen. as we approach the first anniversary of the guidance it is worth reflecting what progress has been made and what gaps remain. since the heightened attention of the overdraft began, the overdraft charged by the regulated banks in aggregate have fallen over 40% from $6.5 billion. that's money that stays in the pockets of those that need it. of the supervisory data continue continued to show declines in overdrafts quarter over quarter among the large banks several have outperformed their peers in terms of reducing fees and adopting the proconsumer features such as grace periods while others reduce the fees

only modestly. i don't have a way to show this but if you are online in my speech is a graphic that shows bank by bank changes. importantly they provide and stop assessing the negative fees or most discontinued the overdraft fees. the occ regulated midsized community banks have made the process of making various proconsumer changes to their overdraft protection programs. for instance most have eliminated or started offering de minimis amounts of grace periods. this includes the community banks with an outside amount of revenue from overdrafts. progress has been more challenging due to the critical role played by the core processors. i had an opportunity to share community bankers concerns on

this issue with representatives of the crew processors and encourage them to continue to enhance the systems to facilitate the transparency andd proconsumer practices. we understand they are taking steps that will allow banks to identify and address the practices as the plans developed we continue to encourage banks and processors to take steps to protect and empower consumers. another element the continued effort to strengthen fair lending supervision. last year i highlighted the comprehensive update for the fair lending booklet of the handbook that remains important for transparency into detail regarding the supervisory practices. they've continued to play the risk-based supervision process that includes the fair lending risk assessment program as well as an annual screening process that leverages the data.

we run several screens on the data for each provided a banking including red line. in the past year we developed new screening methods to identify potentially discriminatory areas by using the census and geographical data to detect communities of color located near excluded from the boundaries of an investment area. we remain focused on efforts to deploy supervisory resources to identify weaknesses, potential discrimination. internally we implemented to provide more advanced real-time support to the fair lending reviews. fair lending experts from the legal policy economics departments work proactively with supervisory offices to identify and address complex fair lending issues and of the examination process. this includes the analysis of complex models with examination

involving banks that have begun to incorporate analytics such as artificial intelligence into underwriting systems and fair lending risk management programs. ensuring the federal banking system is free of discrimination is a part of the mission to safeguard trust and banks. that's why we are committed to continue to strengthen our supervision. also it stands for the roundtable for economic access to change. the project brings together leaders of banking, civil rights, community advocacy business and technology to identify and reduce the key barriers to the inclusion for underserved minority communities. it's a unique program with enormous potential. on the project reach focus areas tens of millions of consumers in

america are unable to access credit because they lack the credit file and do not have a score. many of the so-called pay their rent and utility bills on time and are otherwise creditworthy and it helps get them onto the first round of the economic ladder. the project reached several national banks and to use alternative data primarily from the accounts to qualify consumers for pristine credit cards. october 31, 2023, over 110,000 accounts were established under this pilot. they've been monitoring key performances to track customer's credit progression after account opening and the initial report of promising. after 12 months, the average score was 680. this population and initially was credit invisible it had no score at all. the success of the pilot shows

how the fairness outcomes can keep accelerated through collaboration and engagement. success can also inspire. some participants have begun discussing credit challenges for veterans and justice of individuals. other key focus reach has been revitalizing the minority deposit institutions. the 26 banks signed a pledge to support them with over $500 million of financial support and technical assistance to help those institutions grow and expand to safe, sound sustainable ways. participants created in the playbook and online portal through which they can receive specialized training and information to help them better serve the communities. in addition, several large banks to spend a year working to share best practices and strengthen operational managerial aspects

of successfully running a bank and all have noted the benefits of collaborating as partners and building relationships not just relying on transactions. the project participants also help to expand access to housing for low and moderate income communities. this includes homeownership on tribal lands, which has distinct challenges. to address those complexities the participants hosted a national webinar for the banks to demystify the process and support opportunities for the home finance and indian country. the group also sponsored the dealmaking sessions among the tribal leaders, banking officials to focus on affordable housing. the product reach also helps facilitate several launches of special purpose credit programs to focus on providing mortgage financing for the minority communities as permitted under the equal credit opportunity

act. enter the dwelling units or eb use. in california they recently changed and developed a white paper and piloted a pool that facilitates. these and other project reach efforts have sought to protect the creative energies of bankers, civil rights and community organizers, technology leaders to collaborate and craft novel solutions to the fairness challenges. i'm proud of what the project is able to accomplish and look forward to with the participants will do in the future. looking ahead, fairness is not self enforcing. it doesn't happen on its own. achieving fairness acquires work. we must be just as vigilant about entering fairness with new technologies and emerging issues as we are with traditional banking products and services. today to emerging areas standout, aia and fraud.

from the fairness perspective, aia holds both promise and peril and has a potential to reduce bias and enable fair access to credit and in a way that humans have been challenged to do. we should welcome this and create spaces to safely explore and develop that potential. at the same time, however, aia has the potential to perpetuate and exacerbate the biases, discrimination and unfairness that are deeply embedded in the data. the challenges that there can be strong echoes of race, gender and other characteristics and large data sets even when they are removed. this means even if it were colorblind, the redundant other variables would likely reflect and reveal race as a factor. to guard against us, the banks needed to have appropriate

oversight and governance. the credit models are developed, validated, monitored and tested. at the intersection of aia and fraud also warrants close attention. the federal trade commission estimates in 2023 there were $10 billion. 14% increase over 2022. the rise can be attributed to increasingly sophisticated digital tools used by fraudsters. the accessibility of the tools are making it easier to generate deep fakes to clone voices and otherwise defraud individual businesses. i am concerned about a potential explosion in the ai driven fraud with elders and members of multiple communities being disproportionately preyed upon. to fight the ai driven fraud will likely require the solutions. banks and companies are best

positioned for both of those. in the uk the payment of systems regulator recently issued a new reimbursement requirement for authorized fraud where the criminals tricked an individual to a fraudulent account. under the new requirement the customers bank and receiving bank must reimburse the customer for the losses. but the reimbursement cost is split 50/50 between each bank. in addition the requirement incentivizes both banks to develop and implement more effective fraud controls. this liability model deserves greater discussion and debate here at the u.s. as noted by the consumer advocacy groups. in cases where ai plays a role in the fraud, splitting reliability between the customers bank, receiving bank and ai platform would be a good starting point for the consideration. such liabilities would protect consumers while creating strong incentives for those best

positioned to develop effective defenses. in addition, the gap between large and community banks when it must be addressed. the banks can develop the models using their own internal data. community banks cannot. they also invest in ai talent and systems in ways that are impractical for the communities. the significant part of the solution lies again with the core processors upon which most community banks rely. .. i want to repeat it quote to

ensure national banks and federal savings associations offer it in a safe and sound manner, provide fair access to financial services treat customers fairly and comply with applicable laws and regulations. we made a lot of progress on elevating fairness and federal banking system. since i spoke to at last. rest assured we will continue to focus our efforts on this going forward. thank you. [applause] >> fairness is not automatic. i love that. i love that quote. and one of the things we have been concerned about, i'll be asking more about in a minute. whose response to redlining and yet in a sense the laws that more directly address redlining

and other things are not fully integrated in the review. it should of been a rupture or active immigration exit issue can result in a downgrade. we have taken a look at the last dozen or so banks to settle with the department of justice for redlining. ten of the 12 high passing grades to had outstanding grades. as you think about the implementation of the new rule and some of the other moving pieces with respect to regulatory policy, how did these things come together to be coordinated? click the set say much but what i will say is your absolute right. cr eight statute part of a package with other legislation to address deep deep

discrimination and redlining. we are fully committed to carrying out statutory purpose which is to address that. to make sure we need to fully assess how we meet the needs of our lord in their community including and especially at lowd moderate income neighborhoods. we are fully committed to that we will use all the tools available to us to do that. >> a burger or form you have talked a lot about this recently. issued some proposal the fcic recently issued a proposal on bank merger policy. really thinking about the steps you have taken. what's critical to us is the notion every merger has some type of adverse effect. i could be product loss. could be branch closures, could

just be the back to one plus one is slightly less than two in the aggregate lending. talk about how your views with the public interest are served and evaluated in the bank merger process. >> i think there is a popular conception of all bank mergers are like that. that is not the case. that is sometimes the case and what we are trying to do by updating the frameworks by which we analyze is to make sure that when that is the case they don't get approved for a do want to clarify mergers can be pro- community they can be pro- competition. they can be pro- financial stability. i want to be careful we do not paint all mergers as bad or all mergers as good they're not also all good there are some who advocate that that is not true.

we need to be very discerning about the mergers. that worked concerning the art the more transparent they are when you have banking system that can be dynamic and pro- community. that is the objective. that is what we need to drive towards we cannot free the banking system in place that is not good long-term for anybody. i think we sure the objectives the devil is in the detail of policy statement we put out for comment. i want to echo something bethany has said but please give us your comments appeared there is a lot to comment on you could take them very, very seriously. the more we hear from you the better we set those bars. he said that yardstick so we see good mergers. once you talked about and expressed concerns about the resolve ability of the globally systemically important banks.

what concerns you have there? what risks do you see on those kinds of mergers? >> no bank should be too big to fail. i want to tell a really quick story. back in 2000 as of the fcc at the time. in september newman's file for bankruptcy i was there as part of that team overseeing that. it created huge uncertainty. the impact of that lost hundreds of minds of people who had nothing to do with that. people lost their savings. people lost their homes the blast zone over problems from that failure. it was not right. it was unjust. two days later aig got $85 billion loan for the fed. later on that fall we got a

40 billion-dollar equity injection from the treasury department that would require further bailout. because the field if aig had the same problem even more people would feel more panicked. both outcomes are unjust. that is the core of the two big to fail problem. that mandates thus not going to happen again we need to be living wills, resolution plans, those kind of banks need to be resolvable. that's framework put in place i had a role in helping to put some of that in place for the largest. now the issue is in my opinion all large banks should have elements of that so we can avoid that in the future. we have reliable we can be confident in those projections for all large banks in the future as part of what the proposals and were working on and across the banking agencies to make sure we avoid that. >> thank you.

i also want to thank comptroller for your leadership on cra. i know we have a competition with respect to the final rule. we also know much of the banking industry is preparing nonetheless implement the rule we are excited for that brings. thank you for your leadership. another in crc round of applause. [applause] ♪ c-span is your unfiltered view of government. we are funded by these television companies and more including wow. >> the world has changed. today the fast reliable internet connection is something no one can live without. while is there for our country for speed, reliability, value and choice. now more than ever it starts with great internet. support c-span as a public service along with these other television providers.

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