Featured Guest: Delicia Hand

Delicia Reynolds Hand is the Director of Financial Fairness at Consumer Reports.

At CR, Hand leads the organization’s financial fairness program and in particular has revamped the program to stand up a digital finance testing and ratings program, and leading the organizational marketplace change strategy on consumer friendly financial innovation. Through creating a reliable and iterative testing framework for digitized finance, she hopes to influence the fintech market place by examining and identifying company behaviors and practices, which change outcomes for consumers. Rather than criticizing fintech, she wants to dive deep and test whether fintech lives up to its promise.

Hand has previously served as the Deputy Associate Director and Acting Associate Director for the CFPB’s Consumer Education & External Affairs Division, at the CFPB where she worked for 10 years. During her tenure at the CFPB, Hand helped to conceptualize and stand up the agency’s Consumer Experience Research work which aimed to integrate consumer experience research into the CFPB’s policy making, and lead the agency’s advisory board and councils program for several years prior.

Prior to her time at the CFPB, Hand has also served as Legislative Director at the National Association of Consumer Advocates where she testified before Congress on a number of Consumer Financial Protection issues. She has served as General Counsel at the Center for Community Change and Center for Community Change Campaign; Senior Counsel/Legislative Director in the office of U.S. Rep. John Sarbanes of Maryland, where she drafted and led the work to pass the Public Service Student Loan Forgiveness Act, which became law in 2007.

Hand began her career as a Skadden Fellowship attorney in the Metropolitan DC area, with a community and economic development practice which centered on providing low income and immigrant owned communities with business and corporate transactions legal support.  She holds a Masters in politics from Cambridge University, U.K. and a JD from American University’s Washington College of Law.

Episode Transcript

0:00 – Delicia Reynolds Hand 

What does a person who saw their parents survive the Great Recession, who survived– who’s growing up in a post-pandemic world need from a financial perspective? What does a person who was birthed into an environment where, because of COVID, their parents never went to a bank branch and are now primarily using apps and other facilities? 

0:27 – David Reiling 

Welcome to the NextGen Banker podcast where we explore what’s next in banking and talk with the innovators responsible for creating positive change in the financial sector. I’m your host, David Reiling, and I’m very excited to welcome Delicia Reynolds Hand today. Delicia, thank you for being on the NextGen Banker podcast. 

0:44 – Delicia Reynolds Hand 

David, thank you for having me. 

0:47 – David Reiling 

Yeah. And Delicia, before we get started, just a little reminder for our audience to stick around and hear our musical feature at the end of each episode. Each NextGen Banker episode showcase one artist from somewhere around the globe and representing a wide range of different genres. So, check it out. It seems to be a fan favorite here. 

1:07 – David Reiling 

So, Delicia, just a little bit about your background. You are currently the Director of Financial Fairness at Consumer Reports. Before joining Consumer Reports, you spent a decade at the Consumer Financial Protection Bureau, the CFPB, specializing in consumer education, advocacy, and external affairs. And just for audience note, that’s where you and I met for the first time on intersecting with the Community Bankers Advisory Council. 

1:37 – David Reiling 

And prior to that, Delicia, you have your law degree. You spent years working as an attorney and counsel before getting into finance. And maybe on that point, Delicia, you worked in the US House of Representatives. And how do you take your time there and your law background, and how does that get you to finance? 

2:02 – Delicia Reynolds Hand 

Sure. I mean, I– oftentimes, I say I started my career and got into finance through my Skadden fellowship. So, I started my career as a Skadden fellow, was affiliated with Skadden, Arps. And I had been doing some development work in grad school, so this is eons ago, and decided to go to law school, focus on development work and development law, and was doing some clinical work, community economic development. 

2:38 – Delicia Reynolds Hand 

So, kind of cut my teeth and housing and those kinds of issues, working on opportunity finance type issues. But then had the opportunity through the fellowship to design my own work. And what I wanted to do was think about the role that a sort of transactional or corporate practice could have in moving LMI communities from what I call subsistence. So, I think legal services is most known for crisis intervention and helping in urgent circumstances. 

3:15 – Delicia Reynolds Hand 

But given the work that I’d done prior in development, was really wondering about how you could use the law and transactional practice to move communities from subsistence to sustainability. So, what that concretely meant is new Americans, poor working-class Americans and helping them to start their own businesses. So, I organize things like worker cooperatives, taxi co-ops, credit union. And I sort of got into finance development that way. 

3:50 – Delicia Reynolds Hand 

And then on the hill, I was there during the Great Recession. And so, was part of the scurry of policy makers and staffers who were trying to figure out, OK, what exactly is a derivative swap? And so was there during that time where we had to learn about these things, but also then develop policy around these things. And I think that really framed my perspective about how policy around finance is developed. Should it be developed just in crises? Should we develop a more affirmative posture towards what finance can do for communities? So that’s how I make the connection anyway. 

4:36 – David Reiling 

Oh, that’s fantastic. And what– gosh, in my world, that’s the two ends of the spectrum of the corporate derivative world of that time particular and the sophistication or lack thereof around that, all the way to the development side, which seems in its essence to be very basic in terms of– but it’s the beginning of a financial inclusion and the importance of people getting access to the system, whether it’s for a business or personal reasons. 

5:06 – David Reiling 

So, if I had to take that and maybe fast-forward you into 2022, now you moved into a new role as Director of Financial Fairness at Consumer Reports. And maybe you can tell us a little bit about what financial– what your new role entails. But also, how do you approach financial fairness? What does it mean to you? 

5:27 – Delicia Reynolds Hand 

Yeah, great question. So, in the interim, spent 10 years at the bureau and then wanted to– the CFPB. And then wanted to start the next chapter. So, the next chapter for me was really getting my head, hands, everything into financial innovation and tethering back to some things. So, is there an opportunity to shape the direction of financial innovation? 

5:54 – Delicia Reynolds Hand 

So, at CR, our vision for a fair financial system, or fair digitized financial system as I often say, because in my view, I take the long view, there’s always been innovation in finance and the digital aspect has been around for a long time. I go back and think about when Chase QuickPay is now Zelle. And this is from back in the ’90s. 

6:29 – Delicia Reynolds Hand 

So, in my view, what we’re trying to achieve is a system where consumers can achieve what they want. They can spend, save, borrow, invest safely, privately without predation. And digital finance products work to improve their financial outcomes. So, what affirmatively should products try to achieve for consumers. 

6:57 – David Reiling 

Got it. And so, as you see this role in– I would say, I agree with you. I think there’s always been financial innovation. It seems with the space and place of fintech and the digital innovation that we’re seeing now, in my opinion, it seems to have– it’s speeding up or it’s happening in a shorter timeframe. And in that– so when you think of your role at Consumer Reports, how does– I mean, your lens in regards to not only effective and fair, but then equitable, what role does Consumer Reports play in setting that foundation? 

7:36 – Delicia Reynolds Hand 

Sure. Great question. So, the role that we play is really bringing– or what I’m doing is leading a portfolio of work to evolve what everyone knows CR for, which is ratings and evaluations. So right now, you can go on our website and/or user app, et cetera. But as a member, you can get trusted, reliable, independent product ratings. And so, the work that I’m doing at CR is to evolve that into the digital finance space. 

8:12 – Delicia Reynolds Hand 

And then to actually accomplish that, we develop definitions, criteria for things like fairness, accessibility, inclusivity, attributes of finance, which include privacy, transparency, safety, and security. So, we’ve built out a testing framework or an evaluation framework for financial products across the board and then are building out a series of modules to address different kinds of products, so payments, digital lending, or lending apps, like our newer products like buy now, pay later. We’ll get into virtual currencies and things like that. 

9:04 – Delicia Reynolds Hand 

What we’re trying to do is stand up a regular way and an independent way of evaluating the products and services to say, OK, well, how do they rate? How are they actually helping consumers? Which ones are better? If you use Apple Pay versus Google Pay, is there a difference? And then putting this information out there into the ecosystem. 

9:29 – David Reiling 

Yeah. I have to tell you that this is really welcome from my lens because we work with a lot of fintechs day in and day out. And there are differences between them, but it is sometimes really challenging for the consumer or the business who’s consuming it to really understand what the field looks like, for one, and then what are the differentiation points? 

9:52 – David Reiling 

I find this particularly in regards to I think one of the things you touched on in the safe definition is really around, I’ll call it, the digital cyber protections of data as an identity and so forth, and the transportability of that data. I mean, really from a consumer’s viewpoint, sometimes they don’t think of it. They may think of a product as, well, is it safe for me? Meaning, is that company going to stay in business as opposed to, gosh, what do they really do with my data? How does it get sold or manipulated and used in other ways? 

10:28 – David Reiling 

So, yeah, I think this is a perfect space for Consumer Reports, that you have such a reputation of the independence piece also, that is, I think, it really brings strong credibility to the various niches of products that you’re looking at. 

10:45 – David Reiling 

So now, for really in your history, you’ve worked in that consumer advocacy and education piece. And it’s interesting when I think about the ecosystem of a bank, in particular when we think of financial well-being for a particular consumer. Gosh, there are so many different players in this ecosystem, and Consumer Reports to weigh in on this. When you think of your role at CR, as well as you have banks and credit unions and reporting agencies, how do you think of that ecosystem, particularly as it pertains to financial well-being? 

11:29 – Delicia Reynolds Hand 

So that’s a great question. We think about the ecosystem as, not to be literal, but all of the players and actors. We think about traditional financial services, as well as fintech. And I would say increasingly, that’s less of a distinction because even with some of the smaller, more community-based institutions, the business model, as you know, has evolved, where to remain relevant, accessible, competitive, small financial institutions also have to be part of the fintech conversations and fintech has to be accessible to communities. And there’s a lot of work to be done there. 

12:14 – Delicia Reynolds Hand 

We also think about it from a perspective of the regulatory community. One of the things that informs how I approach this work is thinking about some of the limitations and missed opportunities of being at the CFPB. And one of the things that I often say is that the CFPB, particularly coming out of the– being birthed out of the last crisis, really had an opportunity to shape and set standards for innovation and bring together that ecosystem and really work cooperatively. 

12:51 – Delicia Reynolds Hand 

And I think there were some things achieved. But in particular around the question about the direction of innovation and what it could achieve for consumers, I do see that as a missed opportunity. That said, it was the CFPB that developed the financial well-being score working with other organizations and really helped to anchor this concept and develop some concrete metrics there. 

13:24 – Delicia Reynolds Hand 

And so, I think what we can do, frankly, is then develop an empirical-based approach, so an evaluation-based approach to examine precisely for that. So financial well-being is one of the principles in our evaluation framework. I often refer to our framework as, on the one hand, looking at regulatory issues. So, baseline, the floor, is products should be responsible and should adhere to the regulatory requirements. So, we examine for those things. 

14:02 – Delicia Reynolds Hand 

But then on the other side, what do they do for consumers? How do they help consumers achieve their goals? How do they help consumers manage through periods of stress and economic volatility, life changes, financial security challenges, which really gets at the crux of financial well-being. 

14:29 – Delicia Reynolds Hand 

So financial well-being is one of the principles on that side of our evaluation frameworks. And those are some of the criteria that we would look at to see, OK, in an app, what are the things that companies set out to do? And then how do they actually achieve that? 

14:49 – David Reiling 

Yeah, that is really fantastic from my viewpoint. And that is, obviously, there are regulations that are out there to the letter of the law that you consider. But then there’s the technical aspects that we talked about relative to data and cyber. The thing that’s, I’ll say, heartwarming, but then stepping back to say what’s the values’ approach to this? Does it really do what it says it’s going to do, or infers, like whether it’s building credit history or saving, or access? 

15:20 – David Reiling 

I think that’s really where the rubber meets the road. And having Consumer Reports and that independence lens to it, really adds some credibility to, gosh, where do I go for financial services, particularly if I’m looking to enter the system for the first time? Or I’ve been shut out before. Where are there ways and avenues in which to access it? 

15:44 – David Reiling 

So, Delicia, one last question for you just in regards to that framework. Is that live now or consumable now, or is that in development? Where can a consumer think to get that information? 

15:56 – Delicia Reynolds Hand 

Yeah. So, I think by the time this airs, it will be live. So it will be on our website, consumerreports.org. And we will be launching the initiative next week actually with a series of limited applications of this. So, we’re going to be scientific and data-driven in our approach in that we have a framework that we’ve developed, and we’ve got different modules, and we’ve started to test the framework. 

16:31 – Delicia Reynolds Hand 

And then once we’ve worked the bugs through, then we’ll probably have a second-round launch, where it’s just– we’re going to iterate over time. Our job primarily is to keep up with the marketplace and all the changes out there. So, over this year, we’re going to be doing a series of limited releases reflecting what the framework could do. 

16:55 – Delicia Reynolds Hand 

So, the one that we’ll start off with in mid-January, or next week, is looking at peer to peer payment apps. And then subsequently, we will do a release in the spring that focuses on buy now, pay later. We’ll then roll into looking overall at banking apps, comparing traditional apps and looking at newer entrants, digital-only banks and other kinds of financial institutions. And then we’ll also look at digital asset type companies, such as crypto wallets, crypto exchanges. 

17:37 – David Reiling 

Fantastic. Well, yeah, there’s quite the field in which to keep track of there. So final question for you. Given your background now at Consumer Reports and the CFPB, and your law background and the such, what does the next generation of banker look like to you? 

17:56 – Delicia Reynolds Hand 

Yeah. I’m so glad that you all are asking that question because it’s such an important moment to ask that question. Banking as a service tradition is changing. You probably know that better than I. And so, I would say the next generation of banking should think about the consumer, should think about Millennials, Gen Zers, and then the interaction across generations. 

18:26 – Delicia Reynolds Hand 

What does a person who saw their parents survive the Great Recession, who survived– who’s growing up in a post-pandemic world need from a financial perspective? What does a person who was birthed into an environment where, because of COVID, their parents never went to a bank branch and are now primarily using apps and other facilities? 

18:51 – Delicia Reynolds Hand 

If that pattern holds, they are going to grow up in a very different way and have a different relationship with a banking institution, an important one, but different. So, the next generation of bankers should be thinking about engaging with the consumer where they are. And if they’re walking around, whether we like it or not, looking at their phones, maybe that banking relationship looks very differently. 

19:22 – David Reiling 

Yeah, that’s fantastic. Thanks. It is interesting too to reflect in regards to what recent events, like the pandemic, how they’ve changed the consumption of financial services. And what does that mean? And that’s just not a one-time event. It’s the generation that is now and a younger generation who is modeling it. And so that all comes into play. 

19:47 – David Reiling 

Well, Delicia, thank you so much for your time today. Pleasure speaking to you about banking and finance, and the industry and Consumer Reports. So, for the NextGen Banker audience, thanks for listening to the podcast and we will see you soon. 

20:04 – Becca Hoeft 

For this episode’s musical feature, we’re showcasing Maor. Maor creates peaceful, acoustic music that he describes as a crafted Americana that gives you hope. Here is Home by Maor. 

20:18 – [MUSIC PLAYING – MAOR, “HOME”] 

20:43 – Becca Hoeft 

That was Home by Maor. And you can find more of Maor’s music on Spotify. If you would like your music featured on the NextGen Banker podcast, just email David at NextGen, hyphen, Banker.com with a link to your music and website. Thanks for listening to the NextGen Banker podcast. We’ll see you soon.