The Importance of Inclusion
As circumstances surrounding COVID-19, commonly known as the Coronavirus, are continuing to develop each day, VantageScore extends our heartfelt thoughts to those impacted by this pandemic.
As history has shown, sometimes looking to the past to prepare for and fix our future is how we get through these trying times. To that end, we also wanted to take a moment to reflect on the past and find inspiration in what we do – as credit score model developers but also as one of many architects who help construct the “American Dream” for others.
One of the great pleasures of this job is to go to work every day knowing that our success will contribute to a better life for others. And because of that, our team is inspired to grow the use of our credit scores and make the credit market more inclusive.
A few weeks back, I was honored and humbled to be invited to the annual Freedman’s Bank Forum. Hosted by the United States Treasury Department, the Forum is “a tribute to the Freedman’s Savings and Trust Company, which was created to provide economic opportunity for newly emancipated African-Americans more than 150 years ago…The Freedman’s Bank Forum aligns with the historical significance of the bank and its original mission – to promote economic integration and financial inclusion.”
Regretfully and tragically, the Freedman’s Bank was unable to complete its mission and, in fact, had a catastrophic impact on African-Americans when corruption and outright fraud, collapsed the bank in 1874,along with its $3 million of savings from more than 60,000 African-Americans and organizations. After the collapse, there was no banking system for people of color.
The failure of Freedman’s Bank is a stark reminder that we cannot check the box, nor consider the job done even when we’ve achieved some modicum of success towards financial inclusion. There is, unfortunately, much to be done to deliver affordable, mainstream financial services to underserved populations.
The Freedman’s Bank Forum was hosted in the “Cash Room” of the U.S. Treasury and, after a number of speeches from the heads of all the major financial regulators, I was privileged to deliver a presentation for the National Credit Union Administration’s minority depository institutions.
The minority depository institution, including and especially a large number of credit unions (500), serves a unique and critical role in extending affordable and inclusive financial services to minority populations that have been historically been underserved. Likewise, these populations have also been underserved by the credit markets and many of them have either damaged credit health or limited to no credit histories at all.
In the presentation I discussed how credit scoring works and described the broader ecosystem in order to dispel misconceptions and confusion. Secondly, I addressed which consumers are and are not scoreable and why. Our discussion examined the demographics of the conventionally unscorebable population and discuss strategies for inclusion. If you’d like to check out the presentation for yourself, you can view the slides here.
It was truly an honor to be invited and present during such an important day.
To learn more, I strongly encourage you to check out a PBS documentary that covers the history of Freedman’s Bank called, “Boss: The Black Experience in Business”.
The documentary references a new museum in Beaufort, South Carolina, documenting this chapter in American history. Visiting it is now most certainly on my bucket list.
Stay healthy and safe.
CEO and President, VantageScore Solutions, LLC