FDIC Economic Inclusion

The Federal Deposit Insurance Corporation (FDIC) is dedicated to ensuring that consumers have access to basic banking and other financial services. As part of its commitment to this issue, the FDIC has begun an effort to bring all Americans — especially unbanked and underserved populations — into the financial mainstream.

Notable Practices from the Chairman's Award
As part of the FDIC’s continuing efforts to encourage institutions to engage in economic inclusion activities, the FDIC published Notable Practices from the 2011 Chairman’s Award for Excellence in Serving the Needs of Low- and Moderate-Income Consumers. This publication describes the work of the winning bankers and collects promising practices from the winners and other nominated individuals on how best to serve LMI consumers.

Microenterprise Development: A Primer
In April 2011, the FDIC published a primer on microenterprise development. The article provides a background on small businesses, small business lending, and the challenges small companies face in the current economic environment; describes the poverty alleviation aspect of entrepreneurship through microenterprise development; examines the scope of microenterprise development and the benefits to small business owners and their communities; and includes case studies of organizations that participate in microenterprise development activities. Microenterprise development activities can be particularly beneficial for LMI entrepreneurs and other individuals who lack full access to mainstream financial services. Banks can also benefit from participating in these activities.

Chairman's Award
On June 1, 2011, the FDIC announced the winners of the 2011 Chairman's Award for Excellence in Serving the Needs of Low- and Moderate-Income Consumers. The award recognizes and honors the work of individuals at FDIC-insured financial institutions that participate in creating and promoting products and programs that creatively and responsibly meet the credit and deposit needs of LMI consumers. The FDIC created the award following a discussion with the ComE-IN as a way to recognize the important role individual bankers play in bringing responsible products and services to underserved consumers. Individuals at three financial institutions were presented with awards from Chairman Bair and were invited to speak about their programs at the ComE-IN meeting on June 2, 2011. For more information on the awardees and the award, please see http://www.fdic.gov/about/comein/lmiaward.html.

FDIC Launches Model Safe Accounts Pilot
On January 1, 2011, the FDIC launched the Model Safe Accounts Pilot.  Nine financial institutions are participating in this one-year pilot, which is designed to evaluate the feasibility of insured institutions offering safe, low-cost transactional and savings accounts.   These financial institutions are offering primarily electronic deposit accounts with product features identified in the FDIC Model Safe Accounts Template.  More detailed information on the pilot and participating financial institutions is available at http://www.fdic.gov/consumers/template/.

Small-Dollar Loan Pilot Program and a Safe, Affordable, and Feasible Template for Small-Dollar Loans
In February 2008, the FDIC began a two-year pilot project to review affordable and responsible small-dollar loan programs in financial institutions. The pilot was a case study designed to illustrate how banks can profitably offer affordable small-dollar loans as an alternative to high-cost credit products, such as payday loans and fee-based overdraft programs. The small-dollar loan pilot concluded as of the fourth quarter 2009 and resulted in a template of essential product design and delivery elements for safe, affordable, and feasible small-dollar loans.

Advisory Committee on Economic Inclusion
The FDIC Advisory Committee on Economic Inclusion (ComE-IN) was established in 2006 by Chairman Sheila C. Bair and the FDIC Board of Directors according to the Federal Advisory Committee Act. The Committee provides the FDIC with advice and recommendations on important initiatives focused on expanding access to banking services by underserved populations, including reviewing basic retail financial services such as: check cashing, money orders, remittances, stored value cards, short-term loans, savings accounts, and other services that promote asset accumulation by individuals and financial stability.

FDIC Survey of Banks' Efforts to Serve the Unbanked and Underbanked
During 2008, the FDIC conducted a nationwide survey of FDIC-insured depository institutions (“banks”) to assess their efforts to serve unbanked and underbanked individuals and families. The bank survey, the first of its kind at the national level, was mandated by Section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 (“Reform Act”). The Reform Act requires that the FDIC conduct biennial surveys of banks' efforts to bring individuals and families who have rarely, if ever, held a checking account, a savings account or other type of transaction or check-cashing account at an insured depository institution into the conventional finance system.

Alliance for Economic Inclusion
The Alliance for Economic Inclusion (AEI) is the FDIC's national initiative to establish broad-based coalitions of financial institutions, community-based organizations and other partners in markets across the country to bring all unbanked and underserved populations into the financial mainstream.

AEI's focus is on expanding basic retail financial services for underserved populations, including savings accounts, affordable remittance products, affordable small-dollar loan programs, targeted financial education programs, alternative delivery channels and other asset-building programs.

So far, 1,149 banks and organizations have joined AEI nationwide; more than 233,000 new bank accounts have been opened; 38 banks are in the process of offering or developing small-dollar loans; 29 banks are offering remittance products; and more than 183,000 consumers have been provided financial education.

Money Smart
The FDIC initiated a national financial education campaign in 2001 by launching Money Smart, a comprehensive financial education curriculum designed to help individuals outside the financial mainstream develop financial skills and positive banking relationships. Over 2.4 million consumers have been reached with Money Smart and over 1,600 organizations are part of the FDIC's Money Smart Alliance. Money Smart is available in seven languages and in versions to teach adults and youth and for consumers to complete independently online or through a MP3 player. The FDIC continues to form alliances with public, private, and non-profit entities to promote financial education and encourage linkages between financial education and access to mainstream banking services.