A Former NCUA Chairman’s Perspective on Innovation

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You're listening to Leaders and Lending from
Upstart, a podcast dedicated to helping consumer

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lenders grow their programs and improve their
product offerings. Each week, here,

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decision makers in the finance industry offer
insights into the future of the lending industry,

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best practices around digital transformation, and
more. Let's get into the show.

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Welcome to Leaders and Lending. I'm
your host, Jeff Keltner. This

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week's episode features my conversation with Rodney
Hood and a former chairman and current war

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member of the NCUA. So we
got a credit credit union regulator on the

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podcast. We don't get a lot
of actual regulators. I really enjoyed this

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conversation with Rodney. We went through
why that opened up an office of innovation

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and access and why you think of
those two things is importantly combined and put

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them together and the office. I
thought that was a really fascinating We also

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talked about his Shark Tank program and
a regulator, so that's not something I

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thought would go together. So fascinating
conversation about how he thinks about innovation,

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how innovation can be helpful to consumers, the role of FinTechs, the role

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of AI in helping broaden both innovation
in the space to help the consumers,

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but also broaden access and help with
financial literacy. Think all really important topics.

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Rodney was a fascinating guy and I'm
really glad we got to have this

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conversation. So please enjoy my conversation
with Rodney Hood. Rodney, thanks so

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much for taking the time and join
us on the podcast today. I really

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appreciate it. I'm allowed to be
with you, Jeff, and thanks for

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the kind invitation. Yeah, it's
not often I'm going to talk to people

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who actually work in the regulatory environment
on the podcast, so I'm really fascinated

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to do this. Well, I
am too. In any chance to get

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an opportunity to demystify the regulatory process, I'm all for. Well, I

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want to. I love demystify,
but I want to. When we first

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talked, do you use the phrase
shark tank? And I got to start

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with that because of all the phrases
I thought I would hear coming from somebody

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working in a federal agency, we
have a shark tank, it was not

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one. So talk to me a
little bit about what you're doing in that

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vein. We'll dive off from there. But that phrase you're stuck in my

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mind. From our kind, I
wrote it down like start with this because

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it's one in interesting. But Jeff, it is from to start with that

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shark tank is something. And I'm
doing the air quotes because I realized that

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shart tank has been trademark so I
have to do shart tank life isn't the

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UK was the Dragon's den right exactly, exactly exactly. But Jeff, I

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think what you're hearing from me,
and anytime we speak it's fintech is integral

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to the ongoing success of the credit
union system. I recognize that we as

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government regulators, no one ever expects
us to lead when it comes to innovation.

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They often expect us to follow,
so we can be really quick followers

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and maybe even early adapters. But
when it comes to really getting that game

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changing product out there that really is
going to help our communities grow, thrive

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and prosper, it is through those
social entrepreneurs who are typically working in a

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shart tank or a competitive environment.
So I, as many people know,

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have wanted to really look at ways
to broaden financial inclusion throughout our society.

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I often say, Jeff, that
financial inclusion, you know, it's the

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civil rights issue of our generation,
and we're not hearing a lot of tools

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and products come every day that's going
to help that forty percent of American households

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who's frankly can obtain fourugred dollars in
an emergency. So one of the things

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that I worked on there's a lot
of venture capital funding that's now going into

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fintech that are serving credit unions.
There's almost about nine hundred million dollars that

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I'm aware of that supporting credit unions
and fintech. So I banded this idea

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around with them, why don't you
all put together a competition where social entrepreneurs

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FinTechs that are focusing on financial inclusion
can get together and do a sharp tank

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light event where we get people together, we judge, we give them our

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opinions. And it was a wonderful
way to really sort of get a lot

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of interest in excitement. And now
with my newly launched Innovation office, I

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have tesked our new head of that
office, Charles weis with working with the

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broader VC community, FinTechs and credit
us to see if we can even do

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more the financial inclusion events. And
then also I thought we would do them

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thematically Jeff, so springboarding from financial
inclusion and maybe doing something around faster payments,

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How do we really sort of make
sure that we're getting real time payments

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for these small businesses who really don't
have time to wait for the float and

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things like that nature where we went
them paid instantaneously and then maybe we all

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pivot and do more around digital identity. So I tend to like to think

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chart tank like events bring people out
that I would never be able to find.

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So that's why I'm so thrilled and
more to come on that. So

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let me ask, I'm really curious
how you think of the role of the

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regulator in this space, because so
often I think two things that someone who's

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been through the startup. One,
I got a lot of advice like just

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stay off the radar and don't you
know, don't have to know who you

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are until you have to, which
I thought it was bad advice. And

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also it feels like the regulator is
there to like tell you what you can't

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do, not figure out what you
can to tell me. How you think

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about the way a fintech or a
technology should he be engaging with the regulator,

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What the regulator's role is as these
kind of new technologies are coming out.

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Let me sort of back up with
before I go into that, Jeff

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in CUA National Credit Unit Administration,
we are quote unquote the FDIC for the

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credit union system in the sense that
we ensure deposits for our members. So

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justice the FDIC insures account the jundred
and fifty thousand per account. We do

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the same at the National Credit Unit
Administration. But unlike the FDICE, I'm

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not justin insure. I am a
policymaker. That means that we also regulate

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some forty eight hundred credit unions.
That means that they are serving now one

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hundred and thirty five million members of
those institutions, so that's roughly a third

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of their American public has a credit
union account. And JEFF assets to date

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approximate two point two trillion dollars.
So Credit e Is not only have those

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large assets, but they have large
loan volume one point five trillions outstanding and

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loans. So I as a regulator, I'm a safety and sounders regulator.

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So are the members of my board. We're making sure that we are paving

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the way for Credit US to have
the policies that can keep them safe and

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sound, where also adhering to the
fidelity of consumer protection consumer compliance. So

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yes, there is a regulatory hat
that I'm looking at interest rate, interest

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rate risk, liquidity risk, all
the other things that you expect a regulatory

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body to do. But because of
my having worked for twenty plus years in

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financial services, I've been blessed to
work with a number of Wall Street firms

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where I've done affordable housing, economic
development, commercial lending. I see the

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role that these lending activities can play
with credit unions and the thing, Jeff,

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I'm such a proponent of fintech because
not everyone now is going into the

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traditional brick and mortar branches of yesterdayear
to conduct business. So when I talk

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about embracing technology and fintech, it's
not doing it because it's the luxury.

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I think pre COVID, we all
probably thought of fintech and products. It's

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just inn't that a cute little toy. No, it is going immediately now

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from a cute little toy to a
strategic comparative. So when you hear me

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as the former chairman of our agency
and now board member of our agency,

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when you hear me being so arduous
in my pursuit of fintech. It's not

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chasing the toy, but it is
making sure that credit Enians have the tools

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to remain vibrant and sustainable in today's
environment. One hundred and thirty five million

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members, six million of those came
during the pandemic, and a lot of

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those folks you all who joined us, they were Zen generation Z, there

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were millennials. There are folks that
really are coming from a digital native environment

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as opposed to the analog environment of
my generation. So I will not have

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an industry to regulate if credit us
are not using these types of tools.

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So that is why it is more
of a business imperative, and I would

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not be setting them up to thrive
as twenty first century institutions if I am

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not giving them the regulatory empowerment and
flexibility to embrace these new and margin technologies.

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So Jeff I launched a series called
a Fintech Discussion Series where I meet

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with FinTechs like yours, and what
happens is when a credit e and enters

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into a relationship with a fintech.
That means that when we are doing that

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natural examination, we can ask about
third party providers. We're looking at the

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lenders with whom they're partnering, and
frankly, examiners can be a little risk

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averse, not saying that they don't
like to see change innovation, but if

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credit e and examiners don't understand the
nature of that fintech or the nature of

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what's going on, they will assume
the words and want to shut it down.

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So I recognize that with twelve hundred
credit union service organizations, look at

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those as organizations that support credit unis
and their day to day activities. If

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four hundred or those twelve hundred or
FinTechs, I don't want there to be

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a disconnect between my rhetoric and the
exam experience. So every week we bring

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in a intec in fact your company
has presented, we have them come in,

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we ask questions. I immediately tell
the FinTechs, this is not your

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elevator pitch, this is not shark
tank. This is just getting your examiners

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of your partners comfortable with your compliance
and things of that nature. So I

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am looking at it as forward thinking. We also, Jeff of providing guidance,

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I mean meeting the credit unions themselves. They now know that we are

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encouraging them to engage in fintech partnerships
because we told them look at these as

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you would with any other third party. We also gave guidance letters around the

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use of digital assets and distributed letter
technology. These are all tools that today's

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should array wants to have happened.
If they don't see them, they're going

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to walk. And again, if
we don't embrace it, then will I

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even have an industry to regulate a
few years from now. So sorry for

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such a long winded response, but
I wanted to why the lens and under

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which I am looking at technology and
the wonderful role it plays. I love

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that answer because I do think I've
seen that many agencies, the disconnect between

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the offices of innovation and then what
happens when an examiner walks into a banker

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credit union of the field and go, yeah, we just talked to the

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opposite relation. They were all on
board. No, oh, that's that

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disconnect can be really jarring for the
financial institutions on the other end of it.

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And so it's great to hear how
you're You're right, it can be

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jarring. And I don't know if
any of the listeners of today's podcasts.

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Have ever watched this movie The Exorcist
with Linda Blair many years ago, and

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as she has that head spinning exercise, and you have the head spinning,

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you'll have credit Union board. Since
CEOs and chief lending officers all want to

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embrace the technology and then they hear
from me one day, but then there's

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that disconnect. So one of the
things that I'm doing is my new head

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of Innovation is going to be doing
a road show where he's going to be

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traveling around the country to do listening
sessions. We're going to have him at

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some of the venture capital events.
I also am working with him. You

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mentioned the other offices of innovation in
CUA. Is really fortunate, Jeff,

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and that we were among the last
of the financial regulatory agencies to create the

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new office. So the FDIC head
one, the OCC head one, the

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Office of the Coumptural Accuracy that's what
that is, Federal Reserve Commodities Future Trading

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Commission. Almost every agency had one, with the exception of ours. And

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I want our viewers to know I
was not creating the office because I wanted

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us to have our own just to
keep up. I wanted to have our

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own because I saw from some of
the things that they were doing, I

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knew what we could do differently.
Sometimes the agencies within government they have an

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office of Innovation there that agencies best
kept secret. I don't want our Office

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of Innovation to be a secret.
So that's why he's going to be doing

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listening tours, op eds, helping
convene FinTechs. Jeff, I'm also wanting

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him to look at some tech sprints. How do we find opportunities to have

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a product a problem. Put some
FinTechs in a room, and maybe a

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week later they tell us what those
solutions are. Another piece is sandboxing.

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I just recently present it to a
group of building societies in the UK.

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Their version of credit use is what
they call building societies there. So I

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present it to the United the Financial
Conduct Authority that's their prudential regulator, and

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we talked about sandboxing. So,
Jeff, your earlier question you talked about

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the regulatory piece. So one of
the things that I tell folks is let's

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do some regulatory sandboxes where we have
that fintech meet with us at NCUA.

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Let us determine what may make sense
from a regulatory and compliance standpoint to work

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out the impediments. The last thing
you want to have happen is for that

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social entrepreneur to go live and then
we find out that they are not adhering

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to fair living a fair housing protocols, and then you have that bad experience.

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The investors are upset because that fintech
has gotten a fine or warning.

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But let's do the regulatory sandboxing.
I think we've seen some wonderful models of

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that for my peers and London and
also the folks in Singapore. So that's

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when you were saying earlier that people
were saying stay and keep your head doubt.

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No, let that regulator know so
they can work with you. And

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again we are not their prudential regulator. But again at the end of the

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day, I want one hundred and
thirty five million members of our credit uns

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that we oversee to have a seamless, frictionless, frictionless experience when they're dealing

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at that credit end, and FinTechs
can do that. So no, let's

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work together with them in partnership for
the greater good. Yeah, I will

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just plug that as well, because
I did say we got a lot of

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advice that was to keep off the
radar, and you know, we did

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the opposite. This will this will
amuse you. But we were you know,

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when we started doing our first AI
and we said, well, how

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do you think about fair lending?
We said, well we should call the

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CFPB and being new on the job, kind of your examiner point like,

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we walked into the enforcement office and
the local but that was probably not the

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best place to raise your hand and
go, hey, we're doing something here.

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We'd like to understand the regulatory environment, you know, like maybe the

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Office of Innovation was a better for
sure. I think just then there's a

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shared idea and things of that nature. So Jeff again, I want our

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folks to know, reach out to
your regulator, get to know them.

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Also, I'm going to be asking
my innovation head to do roundtables even with

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his peers. You know. A
credit union solution around using data to make

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more informed decisions. It's something that
I think the banks would want using artificial

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intelligence and machine learning to help with
suspicious act they reports and bank secrecy out

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compliance. Those are things. So
I'm want to be looking for shared solutions

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that we can bring all of our
offices of innovation together. I also would

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like for them to look at doing
some office hours. So again, it

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took me two and a half years
to find our head of innovation because I

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had plenty of people who wanted to
take that role when I was offering it

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to have more of a compliance approach, and their approach that was just say

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no, and I wanted someone who
can just say yes and get there without

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any degradation and asset quality, compliance
protocols and anything of that nature. So

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I hope that in the days a
hit that you will get to meet our

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new head of innovation. I want
to dive into the office you set up,

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because it's not just the Office of
Innovation, if I understand right,

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You made it the Office of Innovation
and Acts, which is an interesting pair

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of things to put together. So
talk to me a little bit about how

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you see innovation and access kind of
coming together and being kind of two sides

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of the same points. It's not
mostly offices of innovation or not innovation and

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access. They're just offices of innovactually, right, And Jeff, I knew

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that that was going to be something
that I was going to be running counter

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to what other agencies were doing.
My background just a little bit to be

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quick. I was a missionary in
Africa. I lived in Zambia and Zimbabwe.

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I thought I was going to become
an episcopal priest and I was just

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going to do a lot around saving
lives and things of that nature. But

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unlike the movies, I never was
jostled for my bid at four am with

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lightning and thunder and then just waking
up and actually like, well, gee,

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I guess I'm not wanted in this
bill. So I went into finance.

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So I've been in banking financial services
for the better part of twenty five

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years now, but working in affordable, healthy economic development, urban renewal.

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So what my priest later said was, first of all, no one has

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to wake up call at four am
to bolts of thunder and lightning, So

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where did you get that from other
than movies? And then also he wanted

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me to know that I needed were
the clerical caller to really make a difference

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in people's lives. And I have
long been a champion for serving the under

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serve. So where the scriptures tell
us to serve the least amongst us and

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to serve underserved marginalized communities, I
get to do that. When I was

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the Crara offer Sarah for a Wall
Street bank or when I was working in

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corporate responsibility for another Wall Street entity. So Jeff along the way, I

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have come to take on financial inclusion
as the civil rights issue of my generation.

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I would say collectively our generation.
Credit scores determine where you get to

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live, which ultimately determines where you
get to educate your children. Credit scores

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determine where one gets to even get
the car that they want to drive to

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him from work. And credit scores
also, lamentably in some instances, determine

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where you get to work, because
without a good credit score, you may

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not even be able to get the
job of choice. So credit score so

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much really dictate one's life journey.
So I have made financial inclusion a major

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pivoting point for me, and since
I do oversee a banking or regulatory agency

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for credit unions, I have made
sure that we are helping make small dollar

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loans available. I reference a data
point early on with our conversation. Forty

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percent of American households can obtain fo
untre dollars, an emergency overlay that with

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a community of color sixty percent,
So from the most recent FDIC unbanked Underbanked

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research, sixty percent of minority households
cannot obtain four hundred dollars in the event

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of an emergency. And then if
you keep going to overlay that with a

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community or disability, it's eighty percent. So yes, eighty percent of communities

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of color with a disabled individual in
that household cannot obtain fo hundred dollars.

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So I have taken this issue of
excess. How do you make housing accessible,

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loans accessible, credit accessible. So
what we are doing is following the

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George Floyd Murder I pinned it up
ed in the Wall Street Journal. I

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talked about banks and credit unions coming
together to spur healing through financial inclusion through

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financial education. I know you and
I are recording today's podcast in a for

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with it being National Fear Lending Month
and also National Financial Literacy Months, so

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as Fair Housing Month and Financial Literacy
Months. So we're celebrating those two things.

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So I wrote an op ed what
I called for these individuals and credit

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in some banks to work together.
But you know what Jeff, I mean.

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Yes, the op ed was nice, but we needed something more demonstrable

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than that. So that is where
I worked with my senior leaders here and

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I created the Access Initiative, and
that stands for advancing communities through credit education,

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stability and support. That means that
we're going to have a dedicated person

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who's helping credit dans learn more about
financial education, how to distribute that to

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their members, How do we bring
on financial coaching, how do we find

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not for profit foundations who may want
to do match savings to help that person

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who's never had an account before begin
to see the benefits of savings. So

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we created the Access Initiative. Again. It was someone once said that a

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compassion meets empathy, that's when you
really get to have demonstrable actions. So

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I was really delighted to bringing forth
the compassion and the empathy with the demonstrable

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result through access. And when I
started seeing fintech and other companies that were

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working around this space, a lot
of the social entrepreneurs, Jeff wanted to

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cure some of these eels as well. And if there's anything I think that

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the George Floyd tragedy has done is
catalyzed a lot of folks were wanting to

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invest in underserved, under resource marginalized
communities, and nowhere was that more apparent

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than through the fintech community. So
I wanted to marry innovation with access because

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it's intentionality. It is saying we're
not just innovating because it's luxurious and cool

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and glamorous and sexy. Which I
know that's what you enjoyed about it because

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you were probably one of those early
pioneers in this glamorous, sexy space.

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But I am looking at innovation to
spur greater access. So that's why we

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do have the Office of Invasion and
Access Match together. Now again, there

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may be opportunities where they're looking at
things that don't fit under the access umbrella

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the day. I think when we
have that intentionality, people are knowing as

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to what I want the byproduct to
be. Yeah, I mean it to

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be to be honest. That's what
really what drove us into the space initially

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when we say what's the problem in
the world that we saw that cause us

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to start the company was really there
are a lot of people who deserve credit

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who can't get it or a charge
too much for it, mostly because we

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as an industry aren't good at understanding
that they're not as big a credit risk

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as maybe their credit score indicates,
and that that's costing people either access to

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opportunity or it's increasing the price of
that access in terms of the cost of

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credit. In a society where credit
is is really required to access many of

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the opportunities that we want to make
available, whether that's higher education or housing

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or a car to get to a
job, that credit is really credit,

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even the job itself. We require
that in some instances. And if I

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may, I take a very broad
approach when I look at diversity and underserved,

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So I'm talking of course load and
moderate income, but I'm also talking

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about those rural communities, those tribal
communities. All I'm talking about disabled and

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differently abled populations, and also justice
involved individuals as well, folks who may

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have gone through the criminal justice system, made their debt to society, but

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unfortunately, like Heshteprinne from the Scarlet
Letter, they're still wearing that scarlet letter.

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So finding ways to bring them into
the financial mainstream, finding ways to

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get them financial inclusions. So those
are all of the folks that we are

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wanting to work with with this new
access initiative. So I'm really proud of

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it, and in fact, I
do have a person that's been hired for

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that role as well. And again, the Office of Innovation and Access,

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they're working seamlessly, and again I'm
really happy about being able to create that

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opportunity. Let me ask you one
other thing, what are the things you're

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most excited about in that access?
We talked about the lack of availability of

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small dollar loans. You know a
lot of people who need that couple hundred

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dollars in an emergency end up turning
to payday lending. I know there's people

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working out Are there things you see
or particularly for the banks credit unions that

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are listening, like opportunities technologies say
hey, this is a thing that can

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really help increase access or assisted in
your ability to work with communities that might

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be less traditionally advantaged. Like what
are you seeing out there that makes you

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excited about the future. I'm really
excited at you all when I travel around

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the fifty states of our country,
when I'm meeting with credit unions and other

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state regulators, and when they talk
about how now many of the states are

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requiring financial literacy and financial education to
graduate, I am really excited about that

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because there are a number of individuals
you all, where people are not teaching

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their parents about children about financial literacy
and financial education. I don't want there

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to be these opportunities where these children
in high school students they are going off

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to college and they are signing up
for a free credit card because they get

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a free T shirt. And trust
me, that five dollar T shirt is

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not worth being saddled with debt for
most of your professional career. So I'm

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really excited that financial literacy and financial
capability are really really being taught in some

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of the different high schools. And
again, I understand that there are a

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lot of districts around the country that
are really making that a requirement, and

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I think that's so important. I'm
also excited that I'm starting to see an

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emergence and credit unions, of high
school credit unions. That means that credit

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unions are taking some of their resources
and putting a branch in a high school

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and letting the high school. In
fact, just a few weeks ago,

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I was in Lincoln, Nebraska.
Why I was with a group of ten

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year olds who were taking their allowances
and putting in the credit union and they

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were doing all the appropriate work around
knowing your customer and Bank Secrecy Act.

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And again, the ten year olds
had a minor grasp, but what it

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takes to run an institution. So
I'm excited and very bullish about the growth

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of financial literacy and education in high
schools, the fact that our credit unions

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stepping up to the plate and making
it possible for people as early as ten

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years of age to have access to
credit unions that they are owning and operating

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themselves. I'm also very excited about
just the fact that we are seeing a

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number of denovo credit unions that are
coming. So that means that these are

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new chartered entities who are saying,
hey, we see some momentum. We

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love the excitement, and a lot
of them I wanted to be digitally native.

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So again, many of them may
never have a brick and mortar presence

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of yesteryear, which is what my
generation is accustomed to. So the fact

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that there's excitement about credit unison,
and I'll tell you what the excitement is,

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Jeff, I probably should have talked
about this at the onset. Credit

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unions are owned by the members,
so that means that those hundred and thirty

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five million people that I reference as
having a credit union account, that means

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that they have all invested five dollars
a minimum to join the credit union,

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which gives them a shared governance of
that credit union. That means that one

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share one bode. So whether you
have five dollars in your credit union or

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up to the in short maximum two
hundred and fifty, you all get one

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boat when it comes to looking at
governance and your board members. But also

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credit unions they grew out of necessity
following the Depression, when the hard work

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and men and women from the automobile
plants and manufacturing entities they could not get

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traditional main street financing just because they
were considered the lower income of their generations.

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So what did they do. They
galvanized. They reached into their pockets

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and took whatever change they had and
they started lending it to each other.

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So out of that grew America's system
today of credit use, or the system

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of cooperative credit. What I'm trying
to picture here for you all is that

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it all grew out of people helping
people. So now, nearly a century

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later, that ethos still is embodied
every day. So when I mentioned those

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six million people joined over the pandemic, it was Generation Z was millennials.

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Because credit enians are purpose mission driven
institutions. If there's anything that this younger

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generation cares about is the ability to
make a difference. They want to know

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is their institution investing in underserved,
marginalized and credit unions do that not because

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of some of the government regulations that
many instances do require banks to do that.

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In fact, I had a role. I was a Community of Investment

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Act officer, but not governed by
that. So the fact is that I'm

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seeing excitement around this emergence now of
people wanting to create their own credit unions.

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There was an African American sorority that
just created a credit union. I

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was there to meet with them.
There is an Episcopal church in New York

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that has just created a new credit
union. There was a tribal group in

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Montana. So we are seeing,
even in the midst of some of the

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headwinds that I know that all the
viewers are aware of and financial services,

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even in the midst of those,
there is a port in the storm where

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folks are wanting to see the value
of owning mission based, purpose driven institutions.

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And that's what makes me excited and
bullish about the future. Jeff,

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I love it, and I love
the I mean I love all that and

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people helping people as such. A
that was one of the fascinating things for

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someone coming from the technology Not that
the technology issue's not interested in helping people,

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but I think there's that perspective of
bankers that comes from Wolf of Wall

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Street and whatever. Maybe you're run
in with an investment banker and you know,

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and then when you when you come
to the credit union community are all

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equally. I think the community banking
community, you really get to people that

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feel a lot more like it's a
wonderful life, that are they're trying to

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help our community and do the right
thing. And that was It's always great

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to see. And I love your
statements on financial literacy because I felt like

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it's for many years, like it's
criminal that you can let students graduate from

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high school and have no base understanding
of even simple economic concepts like you know

401
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aprs and interest rates and what compound
or simple interest and what they're what a

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00:28:45.480 --> 00:28:48.039
credit card? I run it up
and then what does it really mean and

403
00:28:48.039 --> 00:28:51.480
how much is it going to cost? Like it's just it's terrible that people

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are that we're relying exclusively on families
to pass along that knowledge and not providing

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00:28:56.160 --> 00:28:57.960
it to our children because it's it's
crucial knowledge to be able to operate in

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the in the modern economy. And
Jeff, it really is. And if

407
00:29:00.680 --> 00:29:03.640
I can go a step further,
and many people think it's the communities of

408
00:29:03.640 --> 00:29:08.519
color, it's those lodomotored incomes communities
where the families are not sitting around the

409
00:29:08.519 --> 00:29:12.000
table and talking to their children about
these topics. I beg to differ with

410
00:29:12.039 --> 00:29:15.559
that. I want folks to know
I have been fortunate to visit some of

411
00:29:15.559 --> 00:29:18.519
the credit unions at the IVY Leagues. We have Ivy League credit unions.

412
00:29:18.599 --> 00:29:22.319
We have collegists in California with credit
unions, and I want you to know

413
00:29:22.400 --> 00:29:27.720
that the students that are at those
prestigious schools also have never had a parent

414
00:29:29.279 --> 00:29:32.079
sit down with them. So this
is a dad who may be CEO of

415
00:29:32.119 --> 00:29:36.079
a Wall Street firm, or whose
mom may be a nuclear physicist. But

416
00:29:36.200 --> 00:29:38.519
the point is, I want folks
to realize that it's not just something for

417
00:29:38.960 --> 00:29:44.000
lodomotored income or minority communities. In
fact, Jeff, I had a CEO

418
00:29:44.079 --> 00:29:45.839
and this is of a I'm not
going to name the Wall Street firm,

419
00:29:45.880 --> 00:29:51.759
but this father best borderline apoplectic that
he was at some event with his son

420
00:29:52.160 --> 00:29:56.119
and the son was using the debit
card and the credit card. He said,

421
00:29:56.160 --> 00:29:57.039
well, son, it's the same
if he said to the father,

422
00:29:57.200 --> 00:30:00.839
but it's the same thing, debit
and credit card. It has the same

423
00:30:00.920 --> 00:30:04.200
numbers, it has the same insignia. No, those are totally different.

424
00:30:04.240 --> 00:30:08.240
So this is uh, that's offspring
of someone who, let's just say,

425
00:30:08.799 --> 00:30:11.759
kind of knows a thing or two
about credit. But for some reason,

426
00:30:12.160 --> 00:30:17.279
you don't teach these concepts through osmosis
to your off springs. So I want

427
00:30:17.319 --> 00:30:22.559
folks to know that no matter what
your income level is or educational attainment,

428
00:30:22.960 --> 00:30:26.519
these are all things that people can
learn from because I sometimes think people just

429
00:30:26.599 --> 00:30:29.680
think it's just one group of people
to know. I've seen it come full

430
00:30:29.720 --> 00:30:33.960
throttle throughout all levels of society.
It's just something that we just need to

431
00:30:33.960 --> 00:30:37.079
spend time on it. Again,
what a better time than now, with

432
00:30:37.119 --> 00:30:41.119
it's being national financial literacy, want
to at least talk about it. Jack.

433
00:30:41.960 --> 00:30:45.720
It is amazing that and not just
the kids of the finance of it,

434
00:30:45.799 --> 00:30:49.400
that the number of well educated professionals
I run across it just don't you

435
00:30:49.400 --> 00:30:53.119
know, they find out I'm in
the finance space and they have just basic

436
00:30:53.200 --> 00:30:56.680
questions and you go, I know, like, how do you get by

437
00:30:56.680 --> 00:31:00.720
in life without knowing these things?
But we don't. It's not like not

438
00:31:00.759 --> 00:31:03.279
just a high school or you can
get through college grad school and never have

439
00:31:03.319 --> 00:31:07.200
taken a single of course on economics
or personal financing. It's yeah, what

440
00:31:07.240 --> 00:31:11.559
it means to look at the credit
card and again that five dollars t shirts

441
00:31:11.559 --> 00:31:14.359
that they're giving you because you're taking
out a credit card. And I do

442
00:31:14.440 --> 00:31:15.960
have to tell you, I have
a pet peoplehen ever a fly and you're

443
00:31:17.000 --> 00:31:18.640
the first group that I've ever mentioned
this to you, and I have to

444
00:31:19.119 --> 00:31:22.839
I'm pretty mild mannered, is I
hope your audience can tell. But if

445
00:31:22.880 --> 00:31:29.359
there's one thing that gives me othelli's
rage from Desdemona, and that is when

446
00:31:29.400 --> 00:31:33.400
I'm on a flight and we are
about to land and you're looking at your

447
00:31:33.440 --> 00:31:38.319
messages and they start with the credit
card solicitations. The flight attendants are walking

448
00:31:38.400 --> 00:31:42.920
around giving everyone who raises their hand
that once, and I'm like, no,

449
00:31:44.400 --> 00:31:48.079
you're setting them up for this unexpected, unrealistic expectation that all it takes

450
00:31:48.200 --> 00:31:52.000
is to get a credit card.
But you're not coupling it with any financial

451
00:31:52.039 --> 00:31:56.839
literacy financial education, and the reason
I get voted on apoplectic when I see

452
00:31:56.839 --> 00:32:00.839
that it's almost not showing any respect
for what we do in financial services,

453
00:32:00.839 --> 00:32:05.359
whether we are regulators or whether we're
working at banks or credit eians. It

454
00:32:05.400 --> 00:32:07.960
just makes I don't want to say, a mockery out of what we do

455
00:32:07.000 --> 00:32:12.480
in terms of extending credit, and
I just think it just cheapens the experience.

456
00:32:12.559 --> 00:32:16.519
So I've got it off my chest
that I just wish that they would

457
00:32:16.559 --> 00:32:22.160
not do that because it just sends
the role message that that financial services just

458
00:32:22.240 --> 00:32:27.160
about handing on a flyer and then
you go home and magically you're you're getting

459
00:32:27.160 --> 00:32:31.799
this account stop of some sort.
It doesn't it all gets paid for,

460
00:32:31.960 --> 00:32:35.079
right. I Mean that's one of
the things every time my kids are in

461
00:32:35.119 --> 00:32:37.119
a casino or whatever, and I'm
going, you know, I go,

462
00:32:37.720 --> 00:32:39.759
people win money at these games that
I go, you see this really fancy

463
00:32:39.799 --> 00:32:44.960
building you're walking around in. It
didn't come because most people make money playing

464
00:32:44.960 --> 00:32:49.240
the games. It came because people
exactly well, Jeff, but now they're

465
00:32:49.240 --> 00:32:52.039
absolutely right, I hear you.
So that's all there were reason around financial

466
00:32:52.039 --> 00:32:58.559
literacy education coaching and podcasts like this, and again, there are some FinTechs

467
00:32:58.599 --> 00:33:04.279
that are creating like training modules that
can be done via the iPhone or the

468
00:33:04.319 --> 00:33:07.480
Andrew I'm not making an endorsement iPhone
or Android, but then you can access

469
00:33:07.519 --> 00:33:12.640
the tools and things of that nature. So I'm really glad that the fintech

470
00:33:12.680 --> 00:33:15.839
community is embracing some of these Around
education, it needs to be ongoing.

471
00:33:15.920 --> 00:33:20.000
It's not like turning it on and
off like a faucet. It needs to

472
00:33:20.039 --> 00:33:27.920
be ongoing and really incocated throughout all
areas. I think of society absolutely a

473
00:33:28.039 --> 00:33:31.319
nice way to end the conversation in
Financial Literacy Month to talk a little bit

474
00:33:31.319 --> 00:33:35.400
about the importance to financial Maybe we
both ranted a little bit now, but

475
00:33:35.400 --> 00:33:37.519
it's an important topic, right.
I got three questions I ask everybody at

476
00:33:37.519 --> 00:33:39.799
the end of this podcast, Son, I'm gonna give them to you now.

477
00:33:39.839 --> 00:33:45.240
Okay, First, what's the best
career advice you've ever gotten? The

478
00:33:45.240 --> 00:33:50.599
best career advice I've ever received is
recognizing that not every promotion has to be

479
00:33:52.400 --> 00:33:55.119
a promotion. Sometimes you can have
a lateral move, So don't think of

480
00:33:55.200 --> 00:34:00.000
your career as being linear. We
want to go from associate to managing director

481
00:34:00.039 --> 00:34:04.880
in two years. Sometimes you may
need to do a few lateral moves to

482
00:34:04.920 --> 00:34:08.760
build out your core competencies, to
also learn about a different team looking at

483
00:34:08.760 --> 00:34:13.000
different ways to problem solve. And
I would say in my early days,

484
00:34:13.360 --> 00:34:15.840
I looked at a lot of my
career progression around it being so linear,

485
00:34:16.159 --> 00:34:21.000
and I recognized it as I got
sort of the mid level that sometimes you

486
00:34:21.039 --> 00:34:23.760
can do that lateral move that's going
to expose you to a totally different product

487
00:34:23.880 --> 00:34:30.360
or totally different way of thinking,
and that's really helpful. So everyone look

488
00:34:30.400 --> 00:34:36.960
at some lateral moves, not everything
as linear, and also volunteer for projects

489
00:34:36.960 --> 00:34:39.760
as well. That can also help
you build out a skill set that you

490
00:34:39.800 --> 00:34:45.000
may be lacking for projects and look
for the lateral lateral opportunities. I always

491
00:34:45.000 --> 00:34:50.239
love that. Maybe maybe it's an
overly quote with the Steve Jobs commenced whore

492
00:34:50.239 --> 00:34:52.599
we so you can only understand a
career looking back, like so you got

493
00:34:52.599 --> 00:34:55.199
to kind of you know, if
you plot it out too far ahead,

494
00:34:55.199 --> 00:34:58.199
it's never going to play out that
way. And you've got to be open

495
00:34:58.199 --> 00:35:01.159
to the interesting moves that are a
available, the opportunities that are there,

496
00:35:01.199 --> 00:35:04.599
not just the one thing. So
I'm supposed to be vice president next.

497
00:35:04.639 --> 00:35:07.840
I gotta gotta get that, you
know, exactly, and that creates disappointing

498
00:35:07.840 --> 00:35:13.039
opportunities. And almost for every role
that I've had, it's almost found me.

499
00:35:13.159 --> 00:35:16.159
I don't think that I've ever really
sought a role outside of when you're

500
00:35:16.159 --> 00:35:20.679
like in college, when you have
the career fair and you're sort of working

501
00:35:20.679 --> 00:35:22.280
with the firms that come to the
campus. And for me it was at

502
00:35:22.280 --> 00:35:25.920
the University of North Carolia there Chapel
Hill. But after that you all people

503
00:35:25.960 --> 00:35:31.199
start finding you, and your network
sort of creates opportunities. So I tell

504
00:35:31.280 --> 00:35:37.039
folks, just be receptive to whatever
comes your way. And I've also been

505
00:35:37.039 --> 00:35:39.440
blessed even with my work in public
service. As you know, I've served

506
00:35:39.440 --> 00:35:44.760
now in two different presidential administrations,
and one does not just call the president

507
00:35:44.760 --> 00:35:46.800
and say, hey, pick me. It's just any number of variables.

508
00:35:46.840 --> 00:35:50.480
I know when to this date has
ever told me how each time I've been

509
00:35:50.519 --> 00:35:53.159
selected, Jeff. But but I
was amenable to the phone call. I

510
00:35:53.360 --> 00:35:57.000
tell folks a day, I said, you never know who's going to call,

511
00:35:57.119 --> 00:36:00.440
and sometimes part of life is just
showing up, but show up being

512
00:36:00.480 --> 00:36:02.719
prepared. I think it's a big
help love it. It's like a question,

513
00:36:04.320 --> 00:36:07.599
what's the best piece of advice you've
ever gotten about the banking sector or

514
00:36:07.599 --> 00:36:08.719
the This is a kind of interesting
one to ask you that, But the

515
00:36:08.840 --> 00:36:15.559
consumer banking space. The best piece
of advice I've gotten about the consumer banking

516
00:36:15.599 --> 00:36:21.159
space is that bricks and mortar may
be disappearing. And we've been talking about

517
00:36:21.199 --> 00:36:24.039
that now for about the past ten
fifteen years. And the advice that I've

518
00:36:24.079 --> 00:36:30.039
been given us again to embrace the
technology, to embrace some of the handheld

519
00:36:30.079 --> 00:36:34.519
devices, because many people can now
use those devices to get a loan,

520
00:36:34.599 --> 00:36:37.880
to make a payment. And the
big advice now is if you're going to

521
00:36:37.920 --> 00:36:42.119
really replace replace bricks and mortar,
what are you going to do to still

522
00:36:42.159 --> 00:36:45.199
be tethered to the customer? In
my case the credit you member, so

523
00:36:45.320 --> 00:36:50.719
as credit need for embracing digital platforms, what are they doing to still define

524
00:36:50.760 --> 00:36:53.280
their value prop what are they doing
to really show that they are building a

525
00:36:53.320 --> 00:37:00.480
relationship as supposed to the transactional aspects
of aspects associated with a member. So

526
00:37:00.519 --> 00:37:04.239
I think the best advice is recognize
that that bricks and mortar may be a

527
00:37:04.280 --> 00:37:07.639
thing of the past, But what
do we do to still build the relationship

528
00:37:07.679 --> 00:37:12.039
and have that sticky feeling. And
I think that's the one advice. And

529
00:37:12.079 --> 00:37:15.760
I learned about that twenty years ago
and we've been hearing about it, but

530
00:37:15.920 --> 00:37:19.760
now I think that really is manifesting
itself. So not saying that bricks and

531
00:37:19.800 --> 00:37:23.320
mortars will be completely gone, but
I think that the best advice has start

532
00:37:23.400 --> 00:37:27.440
thinking about how do you build a
culture and an identity and a brand.

533
00:37:27.800 --> 00:37:31.119
Recognize that you may not see those
folks face to face as often as we

534
00:37:31.920 --> 00:37:36.239
used to. Yeah, that's it. I think they are necessarily disappearing.

535
00:37:36.239 --> 00:37:37.320
But people don't want to have to
come into the branch to do things they

536
00:37:37.360 --> 00:37:40.199
don't need to come into the branch
to do and need, meaning that one

537
00:37:40.280 --> 00:37:45.400
actually talk to the person, not
forcing them to do it to depositive chapter

538
00:37:45.480 --> 00:37:47.360
or whatever it might be exactly and
when we do have them come in now,

539
00:37:47.440 --> 00:37:51.159
Jeff. So that also means that
if you're going to be able to

540
00:37:51.239 --> 00:37:55.320
use the video tellers and the automatic
tailor machines for a lot of those routine

541
00:37:55.320 --> 00:37:59.760
businesses, that means that we in
financial services, whether it be banks or

542
00:38:00.280 --> 00:38:02.920
is that means that now that person
that is in the branch for those face to