Findings from the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked

This article summarizes the key findings and recommendations drawn from the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked. It is intended to inform bankers, policymakers, and researchers of the results of the survey and to outline steps to improve access to the financial mainstream. Unbanked individuals and families are defined as those who have rarely, if ever, held a checking account, savings account, or other type of transaction or check-cashing account at an insured depository institution. Underbanked individuals and families are those who have an account with an insured depository institution but also rely on nonbank alternative financial service providers for transaction services or high-cost credit products. The FDIC retained Dove Consulting to help administer the survey of banks during 2008. The voluntary survey consisted of mail-in questionnaires administered to a stratified random sample of about 1,300 banks. The nationally representative sample was selected from the population of federally insured banks and thrifts with retail branch operations. In all, 685 complete surveys were returned, including 24 of the 25 largest banks. The survey finds that while most banks are aware that their market areas include significant unbanked and underbanked populations, relatively few have made it a strategic priority to target these market segments. In addition, while a number of banks are trying to reach the unbanked and underbanked, relatively few participate in the types of outreach that are thought to be particularly effective. The survey findings also indicate that although banks recognize the challenges associated with doing business with unbanked and underbanked individuals, they are making some progress in improving the accessibility of banking services.