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Financial Inclusion an Update on the FDICs Most Recent Efforts 

by Richard Hills, Rachel Parker

Published: October, 2020

Submission: November, 2020


The Federal Deposit Insurance Corporation (“FDIC”) Advisory Committee of State Regulators (“Committee”) held its inaugural meeting on October 14, 2020. During the meeting, the Committee emphasized the importance of financial inclusion within the banking industry and the recent efforts to foster inclusion undertaken by the FDIC and applicable state regulators.

Five Goals to Increase Financial Inclusion

According to the Committee, financial exclusion usually includes being either unbanked or underbanked. According to a recent FDIC survey, 6.5% of American households are unbanked and 18.7% of households are underbanked (that is, households that use alternative servicers, like pawn shops and payday lenders, for traditional banking transactions). Certain demographics—such as, African Americans, Hispanics, female-led households, individuals with little education, and individuals with disabilities—are more susceptible to financial exclusion. For these groups, “unbanked and underbanked rates remain close to 50%” according to the survey.

In response, the Committee identified five goals to increase financial inclusion:

  • Financial Education: provide quality programs that educate low-to-middle income individuals, emerging small businesses, and diverse communities.
  • Insured Deposits: establish access to safe, affordable deposit accounts for ordinary consumer transactions.
  • Consumer Credit: offer sensible consumer credit options to underserved customers.
  • Mortgage Credit: encourage consumers to pursue prudently underwritten, affordable household mortgages.
  • Small Business:s erve the financial needs of emerging small business owners.

The Committee thereafter described the FDIC’s most recent actions to foster financial inclusion, including providing additional resources as a result of the COVID-19 pandemic and expanding deposit account access.

Responding to COVID-19

COVID-19 has posed multiple challenges to financial inclusion at both the consumer and institutional levels. Financially excluded individuals are often the most impacted demographic during crises like COVID-19. To protect these consumers, the FDIC created several online resources that address the following topics, among others:

  • how to enroll in mobile banking services, such as money transfer services, online bill pay services and remote deposit capture services;
  • how to contact a bank in the event of a default or financial difficulty; and
  • how to avoid COVID-19-related scams.

The FDIC also assured consumers that, even during this time of uncertainty, an FDIC-insured deposit account remains the safest place for a consumer’s money.

Expanding Access to Deposit Accounts

Even before COVID-19, one of the greatest obstacles to financial inclusion was the creation of a consumer deposit account. When individual stimulus checks were issued in response to COVID-19, Americans who did not have a deposit account were unable to receive their funds. Although most bank lobbies were and remain closed due to the pandemic, several banks began to offer remote account opening. These efforts are likely to have a long-term impact on consumers’ ability to open a deposit account more easily.

Implications for the FDIC approach Community Reinvestment Act Reform

As previously noted, the current regulatory framework implementing the Community Reinvestment Act (CRA) risks becoming fragmented. The Office of the Comptroller of the Currency (OCC) issued a final rule in May 2020 to “strengthen and modernize” its CRA regulations, which the FDIC joined at the proposal stage but declined to join for the final rule.

Meanwhile, the Fed recently issued a separate advance notice of proposed rulemaking (ANPR) inviting public comment on an approach to revise and modernize its CRA regulations.

Given the FDIC’s absence from both the OCC’s final rule and the Fed’s ANPR, the FDIC’s five goals to increase financial inclusion, particularly access to credit and other financial services for underserved individuals and businesses, may provide insight into how the FDIC will approach CRA reform and how such approach may differ from or be similar to the OCC’s and the Fed’s respective approaches.


During the global pandemic, financial inclusion has never been more important. By adopting explicit goals and by providing multiple resources, the FDIC is undertaking certain steps in the right direction to fostering inclusion for underserved groups.


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