Gruenberg: Bank On helping to reduce the number of unbanked

Economic conditions alone can’t account for the drop in unbanked individuals and families in the U.S. over the past decade, with efforts such as Bank On possibly responsible for a significant portion of that decline, FDIC Chairman Martin Gruenberg said today during the Bank On National Conference in Washington, D.C. During his remarks, Gruenberg said nearly 300 banks currently offer Bank On certified accounts. (More than 14.1 million Bank On accounts have been opened as of 2021, according to Bank On.) He also cited last year’s National Survey of Unbanked and Underbanked Households, which found the number of unbanked had dropped by about a third since 2015.

“While it’s not possible to quantify precisely the extent to which this change may be attributed to Bank On and related efforts, FDIC researchers have estimated that changing economic conditions—which in my own mind, would play a critical role here—can only account for about half of the improvement,” Gruenberg said. “This suggests that efforts to connect consumers to responsive banking products are at least having a meaningful impact.”

Gruenberg also touched on the importance of deposit insurance. He said that unbanked individuals were more likely than those with bank accounts to use uninsured online payment services to pay bills and deposit money. He pointed to FDIC actions to crack down on online services that falsely advertise their products are insured, saying that the agency has taken action against 85 entities for deposit insurance misrepresentation since last year. He also noted that the FDIC is working on new signage rules with particular emphasis on digital channels, which is expected to be finalized by the end of the year. Nearly half of customers access their bank accounts through a mobile device, he said. “In effect, the mobile phone has become a digital teller.”