Endorses the Promoting and Advancing Communities of Color Through Inclusive Lending Act; Legislation from Representative Maxine Waters aims to strengthen financial services access for historically underserved communities

Responsible innovation in financial services democratizes access and is creating a safe, accessible future of finance

Washington, D.C. (October 1, 2024) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, today announced its support for the Promoting and Advancing Communities of Color Through Inclusive Lending Act sponsored by Rep. Maxine Waters (D-Calif.). In a letter to Rep. Waters, AFC emphasized the bill’s potential to improve lending services for low- and moderate-income (LMI) consumers and communities of color by fostering technological advancements in community development financial institutions (CDFIs) and minority depository institutions (MDIs).

“As we work to address long-standing inequities in financial services, we must support the work of CDFIs and MDIs in serving low- and moderate-income communities and communities of color. Ranking Member Waters’ bill is a significant step toward ensuring these institutions have the technology they need,” said Phil Goldfeder, Chief Executive Officer of AFC. “AFC fully supports this legislation and we are committed to forging fintech partnerships that help drive responsible innovation to promote a more inclusive and equitable financial system.”

AFC’s letter highlighted the essential role that CDFIs and MDIs play in delivering critical financial services to underserved communities. AFC echoed the U.S. Government Accountability Office’s (GAO) findings from a 2024 report noting that many smaller CDFIs and MDIs struggle with outdated technology, limiting their ability to underwrite loans and provide online services. The bill’s proposal to establish a technology grant program, administered by the Department of the Treasury, aims to address these challenges by fostering fintech partnerships that enable these institutions to serve their communities more efficiently.

Oportun, a certified CDFI since 2009 and founding AFC member, has provided millions of affordable installment loans to help consumers without prior credit scores gain access to the mainstream financial system and build their credit.

“At Oportun, we are committed to promoting financial inclusion by leveraging innovative technology to empower our members with intelligent borrowing, saving and budgeting capabilities so they can build a better financial future.” said Ezra Garrett, SVP of Public Affairs and Impact at Oportun. “This legislation will further enable CDFIs and MDIs to modernize their technology infrastructure, which is essential to expanding financial access for underserved communities and promotes the long-term health of vital financial institutions.”

“AFC fully supports the aims of the Act, particularly its provisions focused on supporting improvements to the technological capabilities of CDFIs and MDIs through partnerships with fintech companies,” wrote Ian P. Moloney, SVP, Head of Policy and Regulatory Affairs in the AFC letter. “These provisions represent a concerted effort to encourage responsible innovation for the benefit of historically underserved communities in a manner that will ensure the long-term viability of these institutions.”

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative BaaS banks. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.