On May 23, at the Bank On 2017 National Conference in Washington, DC., Chairman of the FDIC, Martin J. Gruenberg, discussed his agency’s efforts to reach out to unbanked communities. In his prepared remarks, “Connecting Unbanked Communities to Mainstream Financial Services: The Vital Role of Bank On Coalitions,” Gruenberg shared results from an FDIC survey of unbanked and underbanked households and spoke about initiatives the agency has developed to help increase access to the banking system by unbanked and underbanked households. (See previous InfoBytes coverage on the report.) “Economic inclusion goes to the heart of the FDIC’s mission of maintaining the public’s confidence in the banking system,” Gruenberg stated. “By working together to promote access to safe accounts and integrate financial services into important local initiatives, we expand opportunities for people to save, invest, meet basic financial goals, and more fully participate in our economy.”

Findings cited in the report, which provide measurements on access to and use of the traditional banking system at the national and state level, include the following: (i) seven percent of households were unbanked, without any account relationship at an insured institution; (ii) 19.9 percent of households were underbanked, defined as households in which a member had a bank account, but nevertheless used alternative financial services providers to address needs such as check cashing or payday loans; and (iii) use of online and mobile banking to access accounts increased substantially from 2013 to 2015. 36.9 percent of respondents reported online banking as their primary method for accessing a bank account, compared to 28.2 percent relying on bank tellers. After examining the results of the survey, Gruenberg emphasized the need to expand economic inclusion to reach unbanked consumers and provide awareness of available safe banking services. Gruenberg noted that “a key area of focus has been creating access to low-cost, safe transaction accounts.” Gruenberg praised the expansion of the FDIC Safe Account project, which “enrolled consumers in electronic transaction accounts that relied on debit cards, without a check-writing feature, to provide access to funds.” Additionally, he cited the recently updated National Account Standards for the Cities for Financial Empowerment Fund. The FDIC provides technical assistance to economic inclusion partnerships and coalitions—which includes banks, community groups, state and local officials, and others—with the goal of expanding opportunities to fully participate “in the mainstream banking system.” Finally, Gruenberg stated that survey results show that underserved consumers believe mobile technology has the potential to “enhance the level of control, convenience, and affordability” associated with banking relationships. Therefore, he suggested that offering explicit strategies to support those who would enroll in mobile financial services could be beneficial.