Remarks by
Martin J. Gruenberg, Chairman,
Federal Deposit Insurance Corporation
At the
FDIC Sixth Annual Consumer
Research Symposium;
Arlington, VA
October 28, 2016
Introduction
First, let me begin by welcoming you to the FDIC’s Sixth Annual Consumer Research
Symposium. Each year, this event provides an important opportunity for the FDIC’s
researchers and analysts to engage with and learn from leading scholars. Over the
years, this event has matured into something that we—and I think it is safe to say many
of you—look forward to attending.
I would like to recognize the contributions of the team that has done the work to bring us
together today. Ryan Goodstein, Alicia Lloro, Jeffrey Weinstein, Harriet Newburger,
and Sarah Campbell, along with their research colleagues in the Division of Depositor
and Consumer Protection, go to great lengths to ensure a high-quality event. I have
had a chance to review today’s program, and the areas of focus are all of great interest
and relevance to our work. So let me add my thanks also to the authors, discussants,
and to all of you for your participation.
Research has long been a core function of the agency, informing the FDIC from its
earliest days.
In 1934, the FDIC’s Board established the Division of Research and Statistics. As
recounted in that year’s annual report, the division was staffed by a manager; six
research assistants and technicians; and 20 calculating machine operators, clerks, and
stenographers.
In its first year, this modest unit developed uniform data on the condition of 93 percent
of the licensed commercial banks in the United States, conducted a study of depositor
losses from 1865 to 1934, and analyzed efforts to stabilize the banking system. As you
may recall, 1933 was not a particularly good year for banking, with an estimated 4,000
bank failures. So I can imagine that this research was greatly appreciated.
Today, research continues to play a key role as the FDIC seeks to address significant
challenges to the U.S. financial system. One example is the FDIC’s work to expand
access to, and use of, mainstream financial institutions by unbanked and underbanked
households in the U.S.
Martin J. Gruenberg, Chairman,
Federal Deposit Insurance Corporation
At the
FDIC Sixth Annual Consumer
Research Symposium;
Arlington, VA
October 28, 2016
Introduction
First, let me begin by welcoming you to the FDIC’s Sixth Annual Consumer Research
Symposium. Each year, this event provides an important opportunity for the FDIC’s
researchers and analysts to engage with and learn from leading scholars. Over the
years, this event has matured into something that we—and I think it is safe to say many
of you—look forward to attending.
I would like to recognize the contributions of the team that has done the work to bring us
together today. Ryan Goodstein, Alicia Lloro, Jeffrey Weinstein, Harriet Newburger,
and Sarah Campbell, along with their research colleagues in the Division of Depositor
and Consumer Protection, go to great lengths to ensure a high-quality event. I have
had a chance to review today’s program, and the areas of focus are all of great interest
and relevance to our work. So let me add my thanks also to the authors, discussants,
and to all of you for your participation.
Research has long been a core function of the agency, informing the FDIC from its
earliest days.
In 1934, the FDIC’s Board established the Division of Research and Statistics. As
recounted in that year’s annual report, the division was staffed by a manager; six
research assistants and technicians; and 20 calculating machine operators, clerks, and
stenographers.
In its first year, this modest unit developed uniform data on the condition of 93 percent
of the licensed commercial banks in the United States, conducted a study of depositor
losses from 1865 to 1934, and analyzed efforts to stabilize the banking system. As you
may recall, 1933 was not a particularly good year for banking, with an estimated 4,000
bank failures. So I can imagine that this research was greatly appreciated.
Today, research continues to play a key role as the FDIC seeks to address significant
challenges to the U.S. financial system. One example is the FDIC’s work to expand
access to, and use of, mainstream financial institutions by unbanked and underbanked
households in the U.S.
Increasing households’ access to safe, secure, and affordable banking services
improves their ability to build assets and create wealth, makes them less susceptible to
discriminatory or predatory lending practices, and can provide a financial safety net
against unforeseen circumstances.
Through a banking relationship, consumers can take an important step toward full
participation in our economy. To take advantage of economic opportunities, households
need to be able to securely receive and safeguard funds, make payments, and build
and access credit. By providing financial products and services that meet these needs,
banks help U.S. households pay their bills, finance necessities like homes and cars, and
save for the future.
Also, when households find that the banking system treats them fairly and helps meet
their needs, public confidence in the banking system grows stronger. As a result,
informing and supporting efforts to expand economic inclusion in the banking system is
a key component of the FDIC’s work.
Unbanked and Underbanked Survey
Just last week, we released results from the 2015 FDIC National Survey of Unbanked
and Underbanked Households.
Through this survey, the FDIC provides detailed national, state, and local data to inform
understanding of this issue and support economic inclusion efforts. We regularly hear
from a wide variety of stakeholders, including banks, community-based organizations,
and government officials that the survey’s data have informed their efforts to better
serve those outside the financial mainstream.
The survey measures the share of households that are unbanked, meaning no one in
the household has a bank account.
It also examines the extent to which households with a bank account look outside the
banking system to meet transaction or credit needs. To this end, we define
underbanked households as those with an account that also use nonbank, alternative
financial service providers.
This afternoon, I would like to share with you some of what we have learned from the
2015 survey.
Main findings
First, we see positive indications for consumers: The unbanked rate fell to 7 percent in
2015, the lowest level yet in the survey. This represents a significant decline from the
7.7 percent unbanked rate reported in 2013 and from the 8.2 percent rate reported in
2011. Moreover, the change over the four-year period outpaces what one would expect
even in light of improving economic conditions.
improves their ability to build assets and create wealth, makes them less susceptible to
discriminatory or predatory lending practices, and can provide a financial safety net
against unforeseen circumstances.
Through a banking relationship, consumers can take an important step toward full
participation in our economy. To take advantage of economic opportunities, households
need to be able to securely receive and safeguard funds, make payments, and build
and access credit. By providing financial products and services that meet these needs,
banks help U.S. households pay their bills, finance necessities like homes and cars, and
save for the future.
Also, when households find that the banking system treats them fairly and helps meet
their needs, public confidence in the banking system grows stronger. As a result,
informing and supporting efforts to expand economic inclusion in the banking system is
a key component of the FDIC’s work.
Unbanked and Underbanked Survey
Just last week, we released results from the 2015 FDIC National Survey of Unbanked
and Underbanked Households.
Through this survey, the FDIC provides detailed national, state, and local data to inform
understanding of this issue and support economic inclusion efforts. We regularly hear
from a wide variety of stakeholders, including banks, community-based organizations,
and government officials that the survey’s data have informed their efforts to better
serve those outside the financial mainstream.
The survey measures the share of households that are unbanked, meaning no one in
the household has a bank account.
It also examines the extent to which households with a bank account look outside the
banking system to meet transaction or credit needs. To this end, we define
underbanked households as those with an account that also use nonbank, alternative
financial service providers.
This afternoon, I would like to share with you some of what we have learned from the
2015 survey.
Main findings
First, we see positive indications for consumers: The unbanked rate fell to 7 percent in
2015, the lowest level yet in the survey. This represents a significant decline from the
7.7 percent unbanked rate reported in 2013 and from the 8.2 percent rate reported in
2011. Moreover, the change over the four-year period outpaces what one would expect
even in light of improving economic conditions.