American Bankers Association President and CEO Rob Nichols today emphasized the importance of Bank On-certified accounts as a way to promote financial inclusion. “Having access to banking accounts [and]banking products is the building block—the key essential ingredient—to a secure financial future,” Nichols said during a conference hosted by the CFE Fund, which developed the Bank On account standards. “If you’re out of the banking system, you’re terribly disadvantaged. . . . There are many challenges our nation faces around economic inequality, and one of the solutions for this is to get these women and men inside the system.”
ABA has been a staunch advocate of the Bank On movement, and continues to encourage all banks to offer Bank On-certified accounts, which offer features including low costs, online bill pay capabilities, no overdraft fees and certain transaction capabilities. According to CFE Fund, there are now more than 160 Bank On nationally certified accounts, offered by banks and credit unions representing 52% of the domestic deposit market; almost half of all U.S. bank branches offer a Bank On-certified account.
Nichols emphasized that Bank On accounts provide an ideal solution for addressing the estimated 7 million Americans who remain underbanked, as opposed to turning to yet-untested government solutions, such as central bank digital currencies, postal accounts or retail accounts at the Federal Reserve.
“We’ve got a great solution that’s working: bring [consumers]into the banking system with a product that makes sense for them, rather than create a separate government-run banking system to address inclusion,” Nichols said. “Creating this secondary system doesn’t make any sense to us.”
Rep. Ed Perlmutter (D-Colo.), who also spoke at the event, acknowledged that there has been growing interest in these proposals among certain lawmakers, but emphasized that “we have the Bank On initiative [that]is really tackling this. It isn’t something that is just an idea—it’s occurring, and it’s growing.” He added that the initiative has benefits for both banks and consumers. “It’s helping both sides of the ledger—it helps the individual and the individual’s family, but it also helps the financial services side to continue to grow their deposit base and their customer base.” FDIC Chairman Jelena McWilliams and Acting Comptroller Michael Hsu also spoke at the conference, which continues tomorrow.