Bill Summary
The "Financial Inclusion in Banking Act of 2025" aims to enhance the role of the Office of Community Affairs within the Consumer Financial Protection Bureau (CFPB) to better address the needs of under-banked, un-banked, and underserved consumers. This legislation mandates the Office to conduct research to identify the reasons why certain individuals and households do not engage with traditional banking institutions. The Office will collaborate with various stakeholders, including trade associations, civil rights groups, and consumer advocates, to develop strategies that promote financial education and improve access to banking services for these populations.
Additionally, the Office is required to coordinate with other federal agencies to assess barriers to banking participation and report its findings to Congress every two years. These reports will detail obstacles faced by consumers in accessing banking services and provide recommendations for enhancing their engagement with the financial system. Overall, the Act seeks to foster financial inclusion and ensure that all consumers have the opportunity to build sustainable relationships with depository institutions.
Possible Impacts
The "Financial Inclusion in Banking Act of 2025" could have several effects on individuals and communities, particularly those who are under-banked, un-banked, or underserved. Here are three examples:
1. **Increased Access to Banking Services**: The establishment of the Office of Community Affairs with a mandate to identify challenges faced by under-banked and un-banked consumers could lead to initiatives that promote greater access to banking services. This may involve partnerships with community organizations to create programs that help individuals open bank accounts, access credit, and utilize other financial services. As a result, more people may gain access to essential financial tools, reducing reliance on costly alternatives like payday loans.
2. **Enhanced Financial Education**: The legislation emphasizes the need for strategies to increase financial education among underserved consumers. This could result in workshops, resources, and outreach programs that teach individuals about budgeting, saving, credit management, and the benefits of maintaining a relationship with depository institutions. Improved financial literacy can empower individuals to make informed decisions about their finances, potentially leading to better financial stability and improved economic outcomes.
3. **Policy Advocacy and Structural Change**: The requirement for the Office of Community Affairs to report on barriers to accessing banking services may lead to policy changes that address systemic issues within the financial system. By identifying regulatory, legal, or structural barriers, the Act could prompt Congress to consider reforms that enhance consumer protection and promote fair lending practices. This could ultimately lead to a more inclusive banking environment where all consumers, regardless of their financial background, have equitable access to financial services.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2890 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2890
To amend the Consumer Financial Protection Act of 2010 to direct the
Office of Community Affairs to identify causes leading to, and
solutions for, under-banked, un-banked, and underserved consumers, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 10, 2025
Mr. David Scott of Georgia (for himself and Mrs. Kim) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Consumer Financial Protection Act of 2010 to direct the
Office of Community Affairs to identify causes leading to, and
solutions for, under-banked, un-banked, and underserved consumers, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Inclusion in Banking Act
of 2025''.
SEC. 2. OFFICE OF COMMUNITY AFFAIRS DUTIES WITH RESPECT TO UNDER-
BANKED, UN-BANKED, AND UNDERSERVED CONSUMERS.
Section 1013(b)(2) of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5493(b)(2)) is amended--
(1) by striking ``The Director shall establish a unit'' and
inserting the following:
``(A) In general.--The Director shall establish a
unit to be known as the `Office of Community
Affairs'''; and
(2) by adding at the end the following:
``(B) Duties related to under-banked, un-banked,
and underserved consumers.--
``(i) In general.--The Office of Community
Affairs shall--
``(I) lead coordination of research
to identify any causes and challenges
contributing to the decision of
individuals who, and households that,
do not initiate or maintain on-going
and sustainable relationships with
depository institutions, including
consulting with trade associations
representing depository institutions,
trade associations representing
minority depository institutions,
organizations representing the
interests of traditionally underserved
consumers and communities,
organizations representing the
interests of consumers (particularly
low- and moderate-income individuals),
civil rights groups, community groups,
consumer advocates, and the Consumer
Advisory Board about this matter;
``(II) identify subject matter
experts within the Bureau to work on
the issues identified under subclause
(I);
``(III) lead coordination efforts
between other Federal departments and
agencies to better assess the reasons
for the lack of, and help increase the
participation of, under-banked, un-
banked, and underserved consumers in
the banking system; and
``(IV) identify and develop
strategies to increase financial
education to under-banked, un-banked,
and underserved consumers.
``(ii) Coordination with other bureau
offices.--In carrying out this paragraph, the
Office of Community Affairs shall consult with
and coordinate with the research unit
established under subsection (b)(1) and such
other offices of the Bureau as the Director may
determine appropriate.
``(iii) Reporting.--
``(I) In general.--The Office of
Community Affairs shall submit a report
to Congress, within two years of the
date of enactment of this subparagraph
and every 2 years thereafter, that
identifies any factors impeding the
ability of, or limiting the option for,
individuals or households to have
access to fair, on-going, and
sustainable relationships with
depository institutions to meet their
financial needs, discusses any
regulatory, legal, or structural
barriers to enhancing participation of
under-banked, un-banked, and
underserved consumers with depository
institutions, and contains
recommendations to promote better
participation for all consumers with
the banking system.
``(II) Timing of report.--To the
extent possible, the Office shall
submit each report required under
subclause (I) during a year in which
the Federal Deposit Insurance
Corporation does not issue the report
on encouraging use of depository
institutions by the unbanked required
under section 49 of the Federal Deposit
Insurance Act.''.
<all>