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Remarks by
Martin J. Gruenberg
Chairman
Federal Deposit Insurance Corporation

FDIC Economic Inclusion Summit:
Strategies to Bring Consumers into the Financial Mainstream

Arlington, VA
April 26, 2017

Welcome and thank you for joining us at this Economic Inclusion Summit. As the title of
today’s event suggests, we will explore strategies for bringing consumers into the financial
mainstream. As will become apparent, the panels have been structured to promote dialogue and
to invite members of the audience to participate. This is an important agenda, and the experts on
the panels bring a wealth of experience from which we can all learn.
Benefits of Economic Inclusion
In the United States, a relationship with a financial institution is fundamental to households’ full
participation in the economy. Just as graduating from school and getting a first job are
milestones, a bank account is a key step on the road to financial well-being.
Something as basic as an insured deposit account affords households the ability to safely deposit
and store income, make payments toward monthly obligations such as rent or a mortgage, and
engage in convenient daily transactions – such as buying groceries or more durable household
goods. Bank accounts also come with a host of protections, such as those concerning electronic
funds transfers and other rules that limit consumer liability for unauthorized transfers.
In addition, while an account may provide the foundation for economic participation, the benefits
from a banking relationship can help families to save, establish credit histories, and obtain credit
on favorable terms. When delivered with attention to the needs of consumers, this bundle of
products and services can help families realize their goals and, in so doing, strengthen their
confidence in the banking system, which goes to the core mission of the FDIC..
So, for the remainder of my remarks this morning, I will focus on FDIC efforts to enhance
economic inclusion and lessons we have learned along the way.

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Measurements of Banking Engagement
Since 2009, the FDIC has monitored consumer engagement with the banking industry through
the biennial National Survey of Unbanked and Underbanked Households. This survey,
conducted in cooperation with the Census Bureau, provides reliable measurements on access to
and use of mainstream and alternative financial services at the national and state level and for 68
large metropolitan areas.
In our most recent survey, published in October 2016, the FDIC reported that seven percent of
households were unbanked, lacking any account relationship at an insured institution. The
survey also showed that an additional one-in-five (or 19.9 percent) households were
underbanked, defined as households in which a member had a bank account, but nevertheless
turned to alternative financial services providers during the year to address one or more needs for
transactional services such as check cashing or credit. Altogether, the survey reported that some
90 million Americans, or nearly 27 percent of households, are unbanked or underbanked.
October’s report showed that the proportion of the population that is unbanked had fallen for
two consecutive surveys and is down from 8.2 percent in 2011 to 7 percent in 2015. What’s
more, FDIC analysts report that the change was larger than what might have been expected
based on improving economic conditions over this time period.
Still, the survey provides ample evidence that much work remains to expand economic inclusion.
Large segments of the U.S. population remain much more likely to be unbanked or underbanked,
including 42 percent of households with incomes below $30,000 per year, 49 percent of African
American households, 46 percent of Hispanic households, and 46 percent of households headed
by a working-age individual with a disability.
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Opportunities to Enhance Economic Inclusion
Building on the insights gained from the survey, the FDIC has undertaken a number of initiatives
to expand economic inclusion. A key area of focus has been creating access to low-cost, safe
transaction accounts.
We began by initiating the FDIC Safe Account project in January 2011. Banks that participated
in the Safe Account Pilot project enrolled consumers in electronic transaction accounts that
relied on debit cards, without a check-writing feature, to provide access to funds. The accounts
were structured without overdraft or nonsufficient funds (NSF) fees, with low or no minimum
balance requirements, and with low, transparent monthly fees.1 Participating institutions
reported positive results. Specifically, bankers reported that costs could be contained and that
consumers maintained their accounts on par with the banks’ experiences with other accounts.
In response to these positive results, the FDIC has continued to focus on making these accounts
more widely available. Since the pilot, a number of large institutions have introduced accounts
consistent with the features of the FDIC Safe Account. FDIC analysts estimate that more than
87 percent of Americans now live in a county with a full-service branch of an institution that
offers a Safe Account.
In our view, making the accounts available is an important first step. We now want to make sure
that consumers who would benefit from Safe Accounts are aware of their availability and are
able to access them. To that end, we have been working in partnership with Cities for Financial
Empowerment, the Bank-On movement, and FDIC-sponsored Alliances for Economic Inclusion
(AEIs) around the country to connect the underserved with the institutions that offer these

1

See https://www.fdic.gov/consumers/template/.

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accounts. These partnerships, which include banks, community groups, state and local officials,
philanthropic organizations, and others, share the common goal of bringing unbanked and
underbanked households more fully into the mainstream banking system through these accounts.
As an aside, in talking to some of the institutions that offer Safe Accounts, we have learned that
accounts with these features have been quite popular and turn out to have broad appeal to their
customer base, and particularly to millennial customers.

Other Research
The FDIC has sought to inform its economic inclusion efforts through a number of other
research projects based from the unbanked and underbanked survey. I would like to share briefly
some takeaways from the past several years of work that suggest further opportunities to advance
economic inclusion:


We have analyzed household survey data to better understand the factors influencing
Americans’ use of financial services. For example, in 2014, the FDIC reported that exits
from banking relationships were frequently associated with a job loss or significant drop
in income, and entrances were often motivated by the desire to take advantage of direct
deposit often in conjunction with a new job.2 This finding suggests that banks may be
able to retain more household customers if they allow monthly fees to be waived for

2

The 2013 National Survey of Unbanked and Underbanked Households found that 34.1 percent of exits from the
banking system in the prior 12 months were reported to be associated with job loss or a significant drop in income.
The survey also found that, among households entering the banking system in the prior 12 months, 34.2 percent
cited taking advantage of direct deposit and 19.4 percent cited a new job.

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reasons unrelated to direct deposit, such as monthly bill payment activity. On a related
note, the most recent unbanked and underbanked report3 revealed that households
experiencing significant variability in their income from month to month were more
likely to be unbanked at every income level. This finding suggests that efforts to help
families prepare for and manage disparate pay cycles could better sustain banking
relationships.


We also have studied the economic inclusion potential of mobile financial services.4 This
research has indicated that underserved consumers believe mobile technology has the
potential to enhance the level of control, convenience, and affordability that they
associate with banking relationships. For example, the ability to monitor account
balances in real time in order to avoid insufficient funds fees can be a powerful tool.
These findings help explain FDIC survey results showing a continued increase in the use
of mobile financial services—including among underserved groups. Across multiple
survey iterations, underbanked households remain more likely both to use mobile
financial services and to rely on them as their primary means of accessing their account
than the general population. But, while the growth in the use of mobile technology to
access bank accounts has been impressive, jumping from 23 percent in 2013 to 32
percent in 2015, it still trails online and in-person methods. This suggests that sensitivity
to consumer preferences, as well as explicit strategies to support those who would enroll
in mobile financial services, could be beneficial.



Finally, we conducted in-depth research with banks that have a reputation for operating in
an inclusive manner to better understand how they develop trust and relevance among

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4

See the 2015 National Survey of Unbanked and Underbanked Households.
See https://www.fdic.gov/consumers/community/mobile/.

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members of underserved communities.5 While the approaches taken by study
participants to accomplish this objective varied, they were consistent in the importance
they attached to establishing and maintaining trust with underserved consumers . The
theme came through not just in banker interviews, but also in interviews and focus groups
with the leaders of partner non-profit agencies, their line staff, as well as among
underserved consumers themselves.
FDIC Activities
The FDIC has also sought to help build connections to the mainstream financial system by
equipping consumers and entrepreneurs with critical information and a strong network. We have
learned that banking relationships are more likely to succeed when the foundation is strong and
when individuals are encouraged to develop goals – and plans to achieve them – at every stage of
life.
One way we have worked to promote financial education is through Money Smart, our
comprehensive, and free financial curriculum. Over the past 15 years, Money Smart has grown
from a simple paper-based curriculum for adults to include lessons targeted to school-aged
children, entrepreneurs, and older adults offered in nine languages and Braille, and available
through a wide range of downloadable and online resources. In fact, we have had almost 70,000
downloads of our curriculum for young people since introducing it in April 2015.
Though the FDIC offers introductory Money Smart webinars and workshops, we rely primarily
on collaborations with banks and community organizations at the national, regional, state, local,
and neighborhood level to deliver Money Smart material to consumers.

5

See https://www.fdic.gov/consumers/community/research/index.html.

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We also offer special guides in conjunction with the Consumer Financial Protection Bureau for
parents and teachers and collaborate with the Small Business Administration to offer resources
for emerging entrepreneurs. We urge banks, schools, and non-profits to use these materials,
tailor them to the needs in the community, and increase their impact.
The FDIC also recently completed a Youth Savings Pilot, in which we worked with 21 financial
institutions, more than 100 schools, and many non-profit organizations to link classroom-based
financial education with the opportunity to open youth savings accounts. During the 2015–16
school year, participating banks opened more than 4,500 savings accounts for students.
Participants joined us in the fall at a symposium to discuss the pilot program. Several
participating banks explained that they trained student tellers at school-based bank branches in
basic financial concepts as well as soft skills required for customer service. Teachers reported
that children gained confidence and made more effective decisions thanks to their roles as
bankers or tellers in the in-school training programs. One banker noticed that some struggling
students thrived at the in-school bank, with noticeable changes to their concentration, selfesteem, and even academic performance. Most also developed a more positive outlook on their
ability to use banking services.
This spring we released a report and road map that provides opportunities for others to learn
from the pilot. We also launched the Youth Banking Network in which banks can share
information on providing youth banking and financial education in schools and communicate
with other engaged institutions.

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During 2017, we will be revamping our adult curriculum to provide more current information on
accessing credit and managing debt, and to strengthen its design and relevance for people with
disabilities.
As we offer these resources, we simultaneously help build the networks needed to strengthen
access to mainstream financial services.
Across the country, we meet with Bank On organizations, asset-building groups, and FDICsponsored Alliances for Economic Inclusion to exchange ideas and expand connections between
community organizations, local employers, government agencies, and banks in an effort to serve
consumers better.
For example, the FDIC sponsors the Los Angeles Alliance for Economic Inclusion, whose
members include bankers and community leaders. Since 2014, the alliance has collaborated with
the America Saves campaign to promote safe and low-cost savings opportunities with a focus on
unbanked households. In 2015, with the launch of the LA Saves campaign, the alliance led
outreach efforts across the city that resulted in a total of 1,015 pledged savers. In 2016, LA
Saves reached a year-end total of 1,367 pledged savers, saving nearly $150,000 monthly, to
achieve goals like building an emergency fund, reducing debt, and purchasing a home.
I encourage each of you to work in your local communities to bridge the gaps between your
organizations and consumers and communities that are wary of banks or concerned about bank
access, and to contact the FDIC with suggestions for how we can provide support.
Conclusion

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In conclusion, let me thank all of you for participating in this conference. It is encouraging to me
to see the number of people engaged and committed to addressing this issue.
I would especially like to recognize the members of the FDIC’s Advisory Committee on
Economic Inclusion joining us today (prompt to stand). Many of you have advised the FDIC for
the full 10 years over which the Committee has been active. We have benefited from your
insights over the years and know that we will do so again today.
The issue of economic inclusion goes to the heart of the FDIC’s mission of maintaining the
public’s confidence in the banking system and providing a safe and secure place for people to
access financial services. The progress we have made from initiating the unbanked and
underbanked survey, developing the model safe transaction account, seeing it offered by
financial institutions around the country, and exploring the potential of mobile financial services
to expand access, among other initiatives, has been remarkable.
Today’s conference is a great opportunity to review the lessons learned and to point the way to
future initiatives.
Thank you again for being here today. I am looking forward to the program.

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