Global: Citigroup to Launch Financial Inclusion Initiatives Under OCC’s Project REACh

Citigroup will be launching two pilot programs under the Office of the Comptroller of the Currency’s Project REACh, or Roundtable for Economic Access and Change, to help underserved communities get more access to credit.

One of the programs will get credit cards to those without credit scores, and the other will assist small businesses with minority, women or veteran owners to get credit. Participation in Project REACh is a part of Citigroup’s $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States, according to the company’s press release.

Project REACh already works with several banks like JPMorgan, Wells Fargo and U.S. Bancorp, sharing bank account data to approve more borrowers for credit cards.

The issue of the credit-underserved is a big one in the U.S., with around 50 million residents lacking traditional credit scores. Banks usually look at credit scores when reviewing applications for various kinds of consumer debt.

The Wall Street Journal (WSJ) wrote that information about an applicant’s income and spending habits can be as good a measure of creditworthiness as traditional credit scores.

Efforts to help the underserved have cropped up elsewhere recently, including the White House debut of a new Economic Opportunity Coalition (EOC) to look at economic disparities.

PayPal joined in late July, alongside other members like Mastercard, Citi, Bank of America, Capital One, McDonald’s, Netflix and PNC.

The coalition will look into investments for communities of color, while the Biden-Harris administration will also invest. The EOC will be working between public, private and social sector organizations to marshal and direct resources.

The areas of focus will include investing in community development financial institutions (CDFIs) and minority depository institutions (MDIs), supporting entrepreneurs and minority-owned businesses, more access to credit, and better infrastructure and housing for underserved neighborhoods.

The goal of the Biden-Harris administration is to “help communities recover, address inequities made worse by the pandemic, and provide more pathways to economic growth for historically underserved communities.”