Save & Invest

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.

Abstract: This paper assesses the quantitative importance of a number of sources of income risk for household welfare and precautionary saving. To that end I construct a lifecycle consumption model in which household income is subject to shocks associated with disability, health, unemployment, job changes, wages, work hours, and a residual component of household income.

Based on our review and synthesis of the individual development account (IDA) literature, findings in this this report include that IDA accounts (in the short-term, five years after program entry) help low-income families become homeowners, start or expand a business, or pursue secondary education. Studies to date have found no relationship between IDA program participation and net worth. The report reviews empirical evidence on the effect of IDA program participation and project design features on outcomes and highlights remaining gaps in the literature.

The Assets for Independence Act of 1998 created the Assets for Independence (AFI) Program— a program that enables community-based nonprofits and government agencies to implement asset-building programs for low-income families. This program, which is administered by the Administration for Children and Families (ACF) of the U.S.

In 2003, the Financial Literacy and Education Improvement Act created the Financial Literacy and Education Commission, which comprises 20 federal agencies and which the Department of the Treasury’s (Treasury) Office of Financial Education coordinates.

In this paper we report on several new self-assessed and objective measures of financial literacy obtained using the American Life Panel (ALP); we also link these performance measures to efforts consumers make to plan for retirement. We evaluate the causal relationship between financial literacy and retirement planning by exploiting information about respondents’ financial knowledge acquired in school - before entering the labor market and certainly before starting to plan for retirement. We show that those with more advanced financial knowledge are those more likely to be retirement-ready.

This short article briefly summarizes and provides a link to the final report on the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked. The survey was conducted in 2008 and the report was released in 2009. 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.

The U.S. Department of the Treasury and U.S. Department of Agriculture convened the National Research Symposium on Financial Literacy and Education on October 6-7, 2008 in Washington, DC. Twenty-nine experts from the fields of behavioral and consumer economics, financial risk assessment and financial education evaluation were invited to summarize existing research findings, identify gaps in the literature, and define and prioritize questions for future analysis.

This article presents best practices and lessons learnt from on the experiences of the National Endowment for Financial Education® (NEFE), a private, nonprofit, nonpartisan and noncommercial foundation committed to increas- ing access to financial education and to empowering in- dividuals to make positive and sound financial decision.