Remarks by
Martin J. Gruenberg, Chairman,
Federal Deposit Insurance Corporation
To the
Urban Financial Services Coalition
Washington, D.C.
June 24, 2016
Good afternoon. I am pleased to be here today. The focus of the Urban Financial
Services Coalition (UFSC) on economic empowerment for diverse communities is an
important goal that we at the FDIC share. I applaud UFSC for being a strong contributor
to the development of effective leaders at financial institutions so that they can
successfully serve their diverse communities.
The FDIC's mission is to promote public confidence and stability in the banking system.
While deposit insurance is a key factor in sustaining public confidence, consumer trust
in the financial system is another important element. When consumers have a positive
banking relationship, that relationship builds trust.
Many consumers—minorities in particular—remain unserved by the banking system. To
promote banking relationships, it is vitally important that consumers have access to
safe, secure, and affordable banking services. Having a banking relationship can give
consumers the tools to pursue economic opportunity, such as by building assets, getting
a good education, buying a home, or starting a business. Moreover, financial institutions
that can effectively strengthen a broad range of customer relationships will be better
positioned to adapt to the rapid changes in their markets and build their businesses.
Today, to reinforce the theme of your conference, "Leadership for Change," I want to
talk to you about what the FDIC has done in our leadership role to promote economic
inclusion.
First, I will share what we have learned from our research about consumer access to
financial services and what the FDIC has done to promote simple, affordable banking to
reach those who do not have a banking relationship. Then I would like to review how
our work in financial education and, in particular Money Smart, which celebrates its 15-
year anniversary this year, is helping address the needs of people of all backgrounds
and all ages. Finally, I will discuss the unique role of minority depository institutions and
the FDIC's efforts to support these institutions so that they may thrive and serve the
people in their communities.
I know economic inclusion is of particular interest to many in the audience. Many of you
have worked with us on outreach and financial education programs, including hosting
Money Smart sessions, minority business forums, and other community initiatives. I am
seeking your continued engagement in that work today as individuals, as a coalition,
and as participants in the many community organizations you support.
Martin J. Gruenberg, Chairman,
Federal Deposit Insurance Corporation
To the
Urban Financial Services Coalition
Washington, D.C.
June 24, 2016
Good afternoon. I am pleased to be here today. The focus of the Urban Financial
Services Coalition (UFSC) on economic empowerment for diverse communities is an
important goal that we at the FDIC share. I applaud UFSC for being a strong contributor
to the development of effective leaders at financial institutions so that they can
successfully serve their diverse communities.
The FDIC's mission is to promote public confidence and stability in the banking system.
While deposit insurance is a key factor in sustaining public confidence, consumer trust
in the financial system is another important element. When consumers have a positive
banking relationship, that relationship builds trust.
Many consumers—minorities in particular—remain unserved by the banking system. To
promote banking relationships, it is vitally important that consumers have access to
safe, secure, and affordable banking services. Having a banking relationship can give
consumers the tools to pursue economic opportunity, such as by building assets, getting
a good education, buying a home, or starting a business. Moreover, financial institutions
that can effectively strengthen a broad range of customer relationships will be better
positioned to adapt to the rapid changes in their markets and build their businesses.
Today, to reinforce the theme of your conference, "Leadership for Change," I want to
talk to you about what the FDIC has done in our leadership role to promote economic
inclusion.
First, I will share what we have learned from our research about consumer access to
financial services and what the FDIC has done to promote simple, affordable banking to
reach those who do not have a banking relationship. Then I would like to review how
our work in financial education and, in particular Money Smart, which celebrates its 15-
year anniversary this year, is helping address the needs of people of all backgrounds
and all ages. Finally, I will discuss the unique role of minority depository institutions and
the FDIC's efforts to support these institutions so that they may thrive and serve the
people in their communities.
I know economic inclusion is of particular interest to many in the audience. Many of you
have worked with us on outreach and financial education programs, including hosting
Money Smart sessions, minority business forums, and other community initiatives. I am
seeking your continued engagement in that work today as individuals, as a coalition,
and as participants in the many community organizations you support.
Understanding the Unbanked and Underbanked
In order to have better data to help develop effective strategies in this area, and in
response to a statutory mandate, the FDIC periodically conducts national studies that
explore the financial lives and needs of consumers.
Our National Survey of Unbanked and Underbanked Households is conducted every
two years in partnership with the Census Bureau. The survey estimates the size of
these populations, describes their demographic characteristics, and provides insight into
opportunities to address the financial services needs of consumers.
For 2013, the year of most recent data, the results show that substantial portions of the
population remain unbanked or underbanked: 7.7 percent of U.S. households did not
have a bank account, and 20 percent were underbanked, meaning that they had a bank
account but had also used alternative financial services in the past year.1
As we found in earlier surveys, the 2013 report showed that unbanked and
underbanked rates remain particularly high among African-American, Hispanic, and
Native American households; households with lower income and education levels;
young households; and households experiencing unemployment. The survey also
showed that households headed by individuals with a disability are less likely than the
general population to have a bank account and more likely to use alternative financial
services, even when they have bank accounts.
Let me give you some additional figures for illustration.
Among lower-income households, those with annual incomes below $30,000,
almost one in five (19 percent) are unbanked and nearly one in four (23.8
percent) are underbanked.
For black households, more than one in five (20.5 percent) are unbanked and
one-third (33.1 percent) are underbanked.
One in six Hispanic households (17.9 percent) are unbanked, and nearly three in
10 (28.5 percent) are underbanked.
For households headed by a working-age individual with a disability, one in six
(18.4 percent) are unbanked and more than one in four (28.1 percent) are
underbanked.
Young people are also disproportionately unbanked. For example, more than 75
percent of youth aged 15 to 17 do not have a bank account; for those 18 to 20
years old, the proportion unbanked is 50 percent.
In order to have better data to help develop effective strategies in this area, and in
response to a statutory mandate, the FDIC periodically conducts national studies that
explore the financial lives and needs of consumers.
Our National Survey of Unbanked and Underbanked Households is conducted every
two years in partnership with the Census Bureau. The survey estimates the size of
these populations, describes their demographic characteristics, and provides insight into
opportunities to address the financial services needs of consumers.
For 2013, the year of most recent data, the results show that substantial portions of the
population remain unbanked or underbanked: 7.7 percent of U.S. households did not
have a bank account, and 20 percent were underbanked, meaning that they had a bank
account but had also used alternative financial services in the past year.1
As we found in earlier surveys, the 2013 report showed that unbanked and
underbanked rates remain particularly high among African-American, Hispanic, and
Native American households; households with lower income and education levels;
young households; and households experiencing unemployment. The survey also
showed that households headed by individuals with a disability are less likely than the
general population to have a bank account and more likely to use alternative financial
services, even when they have bank accounts.
Let me give you some additional figures for illustration.
Among lower-income households, those with annual incomes below $30,000,
almost one in five (19 percent) are unbanked and nearly one in four (23.8
percent) are underbanked.
For black households, more than one in five (20.5 percent) are unbanked and
one-third (33.1 percent) are underbanked.
One in six Hispanic households (17.9 percent) are unbanked, and nearly three in
10 (28.5 percent) are underbanked.
For households headed by a working-age individual with a disability, one in six
(18.4 percent) are unbanked and more than one in four (28.1 percent) are
underbanked.
Young people are also disproportionately unbanked. For example, more than 75
percent of youth aged 15 to 17 do not have a bank account; for those 18 to 20
years old, the proportion unbanked is 50 percent.