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pdfBanks’ Efforts to
Serve the Unbanked
and Underbanked
for
The Federal Deposit
Insurance Corporation
Final Report
December 2008
Dove Consulting
2 Atlantic Ave, 3rd Floor
Boston, Massachusetts 02110 USA
(617) 482-2100
www.doveconsulting.com
Study Authors
Edward Bachelder, Director of Research
Elizabeth Kronick Alexander, Lead Survey Research Analyst
Lydia Yu, Lead Qualitative Research Analyst
Charles Bellows, Consultant
Joel Stanton, Survey Manager
Jesse Rumble, Research Analyst
Professor Michael S. Barr, University of Michigan Law School, Advisor
Production
Sharon Petitpas
This Study was conducted by Dove Consulting on behalf of the Federal Deposit Insurance Corporation.
The FDIC does not endorse any bank or product. The views expressed in this Study are those of the
authors and not necessarily those of the FDIC.
ii
Table of Contents
Chapter 1:
Study Summary.......................................................................................................................1
I.
Banks’ Efforts with Education and Outreach...............................................................3
II.
Banks’ Efforts to Address Obstacles and Access.........................................................7
III.
Banks’ Efforts to Provide Products and Services.......................................................13
Chapter 2:
Study Objectives and Methodology ..................................................................................21
Chapter 3:
Participating Bank Characteristics and Retail Bank Information .................................35
Chapter 4:
Education and Outreach Efforts.......................................................................................41
Chapter 5:
Retail Branch Operations .................................................................................................105
Chapter 6:
Services Provided to Non-Customers ...........................................................................131
Chapter 7:
Account Opening Process................................................................................................177
Chapter 8:
Deposit Products ...............................................................................................................201
Chapter 9:
Savings Accounts ...............................................................................................................217
Chapter 10: Payments Products ............................................................................................................233
Chapter 11: Credit Products...................................................................................................................247
Chapter 12: Case Studies ........................................................................................................................279
Appendix A: Survey Instrument............................................................................................................ A-1
Appendix B: Retail Bank and Deposit Summary Statistics ...............................................................B-1
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Table of Figures
The figure names indicate the section of the report and/or the question number that is being
discussed. Specifically, ES indicates Executive Summary, OM indicates Objectives and
Methodology and QIA is for the first table of results from the first question in section 1 of
the survey.
ES Figure 1.
Indicate efforts your bank makes as part of its branch strategy to serve un/under banked in your
market areas. ................................................................................................................................................... 8
ES Figure 2.
If an individual does not have an account relationship with the bank, will the bank typically cash
the following types of checks, and is a fee charged? ................................................................................ 9
ES Figure 3.
What forms of consumer identification or validation does the bank rely on for individuals who do
not have an account relationship to cash a check?................................................................................. 10
ES Figure 4.
How soon are funds ordinarily available for an established customer who presents the following
items? ............................................................................................................................................................. 15
OM Figure 1.
Sample Frame by Number of Banks ........................................................................................................ 24
OM Figure 2.
Sample Frame by Number of Banks ........................................................................................................ 24
OM Figure 4.
Sample Stratification by Tier and Census Division ................................................................................ 26
OM Figure 5.
Listing of States by Census Division ........................................................................................................ 26
OM Figure 6.
Survey Response Rates................................................................................................................................ 28
OM Figure 7.
Survey Response Mix and Timing............................................................................................................. 28
OM Figure 8.
Responding Banks by Tier and Region .................................................................................................... 29
OM Figure 9.
Base Weights................................................................................................................................................. 30
OM Figure 10.
Response Adjusted Base Weights ............................................................................................................. 31
Figure 1.
Bank Size (Assets)........................................................................................................................................ 35
QIA. Figure 1.
Overall: Account Statistics.......................................................................................................................... 36
QIA. Figure 2.
Tier 1: Account Statistics ............................................................................................................................ 36
QIA. Figure 3.
Tier 2: Account Statistics ............................................................................................................................ 37
QIA. Figure 4.
Tier 3: Account Statistics ............................................................................................................................ 37
QIA. Figure 5.
Urban: Account Statistics ........................................................................................................................... 37
QIA. Figure 6.
Rural: Account Statistics ............................................................................................................................. 38
QIB. Figure 1.
ATM Statistics .............................................................................................................................................. 38
QIB. Figure 3.
Tier 2: ATM Statistics ................................................................................................................................. 39
QIB. Figure 4.
Tier 3: ATM Statistics ................................................................................................................................. 39
QIB. Figure 5.
Rural: ATM Statistics................................................................................................................................... 40
QIB. Figure 6.
Urban: ATM Statistics................................................................................................................................. 40
QIIA. Figure 1.
Does your bank perceive that there are unbanked and underbanked populations in your area? ... 43
QIIA. Figure 2
Does your bank perceive that there are unbanked and underbanked populations in your area? ... 43
QIIA. Figure 3.
Percentage of Banks Providing Types of Educational Materials ......................................................... 44
QIIB. Figure 1.
Basic Banking Unbanked............................................................................................................................ 45
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QIIB. Figure 2.
Basic Banking Underbanked ...................................................................................................................... 45
QIIB. Figure 3.
Tier ................................................................................................................................................................. 45
QIIB. Figure 4.
Predatory Unbanked.................................................................................................................................... 46
QIIB. Figure 5.
Predatory Underbanked.............................................................................................................................. 46
QIIB. Figure 6.
Tier ................................................................................................................................................................. 46
QIIB. Figure 7.
Urban/Rural ................................................................................................................................................. 47
QIIB. Figure 8.
Savings Unbanked........................................................................................................................................ 48
QIIB. Figure 9.
Savings Underbanked.................................................................................................................................. 48
QIIB. Figure 10.
Region ............................................................................................................................................................ 48
QIIB. Figure 11.
Tier ................................................................................................................................................................. 48
QIIB. Figure 12.
Home ownership unbanked....................................................................................................................... 49
QIIB. Figure 13.
Home ownership underbanked ................................................................................................................. 49
QIIB. Figure 14.
Region ............................................................................................................................................................ 49
QIIB. Figure 15.
Region ............................................................................................................................................................ 49
QIIB. Figure 16.
Tier ................................................................................................................................................................. 50
QIIB. Figure 17.
Tier ................................................................................................................................................................. 50
QIIB. Figure 18.
Urban/Rural ................................................................................................................................................. 50
QIIB. Figure 19.
Credit Counseling Unbanked..................................................................................................................... 50
QIIB. Figure 20.
Credit Counseling Underbanked ............................................................................................................... 50
QIIB. Figure 21.
Tier ................................................................................................................................................................. 51
QIIB. Figure 22.
Urban/Rural ................................................................................................................................................. 51
QIIB. Figure 23.
Other Unbanked .......................................................................................................................................... 51
QIIB. Figure 24.
Other Underbanked .................................................................................................................................... 51
QIIB. Figure 25.
Tier ................................................................................................................................................................. 52
QIIB. Figure 26.
Urban/Rural ................................................................................................................................................. 52
QIIB. Figure 27.
None Unbanked........................................................................................................................................... 53
QIIB. Figure 28.
None Underbanked ..................................................................................................................................... 53
QIIB. Figure 29.
Region ............................................................................................................................................................ 53
QIIB. Figure 30.
Region ............................................................................................................................................................ 53
QIIB. Figure 31.
Tier ................................................................................................................................................................. 54
QIIB-2. Figure 1.
Have the financial education materials helped establish relationships with the unbanked? ............ 55
QIIB-2. Figure 2.
Have the financial education materials helped establish relationships with the underbanked? ...... 55
QIIB-2. Figure 3A. Tier ................................................................................................................................................................. 56
QIIB-2. Figure 3B. Tier ................................................................................................................................................................. 56
QIIB-3. Figure 1.
Does your bank participate in education or outreach with other organizations?.............................. 57
QIIB-3. Figure 2.
Region ............................................................................................................................................................ 57
QIIB-3. Figure 3.
Tier ................................................................................................................................................................. 58
v
QIIB-3. Figure 4.
Urban/Rural ................................................................................................................................................. 58
QIIC. Figure 1.
Does your bank teach financial literacy and education sessions?......................................................... 58
QIIC. Figure 2.
Region ............................................................................................................................................................ 59
QIIC. Figure 3.
Tier ................................................................................................................................................................. 59
QIIC. Figure 4.
Urban/Rural ................................................................................................................................................. 60
QIIC-1. Figure 1.
If yes, how long has your bank been providing the sessions? .............................................................. 60
QIIC-1. Figure 2.
If yes, how long has your bank been providing the sessions? .............................................................. 61
QIIC-2. Figure 1.
Percent of Banks Teaching Financial Literacy by Type (among banks which provide sessions) ... 62
QIIC-2. Figure 2.
Basic Banking ............................................................................................................................................... 63
QIIC-2. Figure 3.
Home Ownership and Mortgage Products.............................................................................................. 63
QIIC-2. Figure 4.
Predatory and Abusive Lending Prevention............................................................................................ 63
QIIC-2. Figure 5.
Credit Counseling ........................................................................................................................................ 63
QIIC-2. Figure 6.
Savings ........................................................................................................................................................... 63
QIIC-2. Figure 7.
Other.............................................................................................................................................................. 63
QIIC-2. Figure 8.
Tier ................................................................................................................................................................. 64
QIIC-2. Figure 9.
Tier ................................................................................................................................................................. 64
QIIC-2. Figure 10. Region ............................................................................................................................................................ 64
QIID. Figure 1.
Did you conduct off-premise financial outreach in 2007? .................................................................... 65
QIID. Figure 2.
Tier ................................................................................................................................................................. 65
QIID-1. Figure 1. Percent of Banks Offering Outreach by Location ................................................................................. 66
QIID-1. Figure 2. High Schools................................................................................................................................................. 67
QIID-1. Figure 3. Employer Sites.............................................................................................................................................. 67
QIID-1. Figure 4. Public Gatherings......................................................................................................................................... 67
QIID-1. Figure 5. Local &State Government Sites ................................................................................................................ 67
QIID-1. Figure 6. Community-based Organizations.............................................................................................................. 67
QIID-1. Figure 7. Vocational Schools ...................................................................................................................................... 67
QIID-1. Figure 8. Military Installations .................................................................................................................................... 67
QIID-1. Figure 9. Other.............................................................................................................................................................. 67
QIID-1. Figure 10. Region: High Schools.................................................................................................................................. 67
QIID-1. Figure 11. Region: Employer Sites............................................................................................................................... 68
QIID-1. Figure 12. Region: Public Gatherings.......................................................................................................................... 68
QIID-1. Figure 13. Region: Local and State Government Sites ............................................................................................. 68
QIID-1. Figure 14. Region: Community-based Organizations ............................................................................................... 69
QIID-1. Figure 15. Tier: High Schools/Employer Sites/Public Gatherings........................................................................ 69
QIID-1. Figure 16. Tier: Local and State Government Sites/Community-based Organizations/Vocational Schools. 69
QIID-1. Figure 17. Tier: Military Installations/Other.............................................................................................................. 70
QIID-1. Figure 18. Rural ............................................................................................................................................................... 70
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QIID-1. Figure 19. Urban ............................................................................................................................................................. 70
QIIE. Figure 1.
Does your bank work with corporate or business customers?............................................................. 71
QIIE. Figure 2.
Region ............................................................................................................................................................ 71
QIIE. Figure 3.
Tier ................................................................................................................................................................. 71
QIIE. Figure 4.
Urban/Rural ................................................................................................................................................. 72
QIIE-1. Figure 1.
Does your bank offer payroll cards?......................................................................................................... 72
QIIE-1. Figure 2.
Tier ................................................................................................................................................................. 72
QIIE-1. Figure 3.
Urban/Rural ................................................................................................................................................. 73
QIIE-1a. Figure 1. Weighted: How many payroll cards has your bank issued during 2007? ............................................ 73
QIIF. Figure 1.
Does your bank use targeted marketing to reach un/underbanked individuals? .............................. 75
QIIF. Figure 2.
Region ............................................................................................................................................................ 75
QIIF. Figure 3.
Tier ................................................................................................................................................................. 75
QIIF. Figure 4.
Urban/Rural ................................................................................................................................................. 76
QIIF-1. Figure 1.
Are there particular segments that you target?........................................................................................ 76
QIIF-1. Figure 2.
Tier ................................................................................................................................................................. 76
QIIF-1. Figure 3.
Urban/Rural ................................................................................................................................................. 77
QIIF-2. Figure 1.
Percent of Banks Targeting Specific Population Segments .................................................................. 77
QIIF-2. Figure 2.
Working Poor ............................................................................................................................................... 78
QIIF-2. Figure 3.
Consumers on Public Assistance............................................................................................................... 78
QIIF-2. Figure 4.
Post-disaster Assistance .............................................................................................................................. 78
QIIF-2. Figure 5.
Urban Residents ........................................................................................................................................... 78
QIIF-2. Figure 6.
Rural Residents............................................................................................................................................. 78
QIIF-2. Figure 7.
Immigrants................................................................................................................................................... 78
QIIF-2. Figure 8.
African Americans ....................................................................................................................................... 78
QIIF-2. Figure 9.
Hispanic Americans..................................................................................................................................... 78
QIIF-2. Figure 10. Asian Americans .......................................................................................................................................... 78
QIIF-2. Figure 11. Other.............................................................................................................................................................. 78
QIIF-2. Figure 12. Region ............................................................................................................................................................ 79
QIIF-2. Figure 13. Tier 1.............................................................................................................................................................. 79
QIIF-2. Figure 14. Tier 2.............................................................................................................................................................. 79
QIIF-2. Figure 15. Tier 3.............................................................................................................................................................. 80
QIIF-2. Figure 16. Rural ............................................................................................................................................................... 80
QIIF-2. Figure 17. Urban ............................................................................................................................................................. 80
QIIG. Figure 1.
Does your bank have any other outreach or education programs to encourage unbanked or
underbanked consumers to open an account? ........................................................................................ 81
QIIG. Figure 2.
Tier ................................................................................................................................................................. 81
QIIG. Figure 3.
Urban/Rural ................................................................................................................................................. 81
QIIH Figure 1.
Most Effective Types of Financial Education and Outreach Programs (Calculated Ranking)...... 83
vii
QIIH Figure 2.
Financial Education Sessions..................................................................................................................... 84
QIIH Figure 3.
Advantages of Financial Education Sessions (non-weighted) .............................................................. 84
QIIH Figure 4.
Disadvantages of Financial Education Sessions (non-weighted) ......................................................... 84
QIIH Figure 5.
Participation in Programs with Other Organizations ............................................................................ 85
QIIH Figure 6.
Advantages of Participation with Other Organizations (non-weighted) ............................................ 85
QIIH Figure 7.
Disadvantages of Participation with Other Organizations (non-weighted) ....................................... 85
QIIH Figure 8.
Outreach Visits............................................................................................................................................. 86
QIIH Figure 9.
Advantages of Outreach Visits (non-weighted)...................................................................................... 86
QIIH Figure 10.
Disadvantages of Outreach Visits (non-weighted)................................................................................. 86
QIIH Figure 11.
Financial Education Materials.................................................................................................................... 87
QIIH Figure 12.
Region ............................................................................................................................................................ 87
QIIH Figure 13.
Tier ................................................................................................................................................................. 88
QIIH Figure 14.
Advantages of Materials (non-weighted).................................................................................................. 88
QIIH Figure 15.
Disadvantages of Materials (non-weighted)............................................................................................. 88
QIIH Figure 16.
Targeted Marketing...................................................................................................................................... 89
QIIH Figure 17.
Advantages of Target Marketing (non-weighted)................................................................................... 89
QIIH Figure 18.
Disadvantages of Target Marketing (non-weighted).............................................................................. 89
QIIH Figure 19.
Other.............................................................................................................................................................. 90
QIIH Figure 20.
Other Rankings (non-weighted) ................................................................................................................ 90
QII I Figure 1.
Have you identified expanding services in your market as a priority in your bank's business
strategy? ......................................................................................................................................................... 91
QII I Figure 2.
Region ............................................................................................................................................................ 91
QII I Figure 3.
Tier ................................................................................................................................................................. 92
QIIJ Figure 1.
Has your bank conducted research on the un/underbanked in your CRA area?.............................. 92
QIIL Figure 1.
Greatest Challenges in Serving or Targeting Un/underbanked Populations (calculated ranking
based on reverse scoring)............................................................................................................................ 99
QIIL Figure 2.
Statistics ....................................................................................................................................................... 100
QIIL Figure 3.
Profitability issues ...................................................................................................................................... 100
QIIL Figure 4.
Competition from alternative service providers ................................................................................... 100
QIIL Figure 5.
Unfamiliar with this Population .............................................................................................................. 101
QIIL Figure 6.
High Cost of Customer Acquisition....................................................................................................... 101
QIIL Figure 7.
Internal Challenges .................................................................................................................................... 101
QIIL Figure 8.
Regulatory Barriers .................................................................................................................................... 101
QIIL Figure 9.
Fraud Concerns.......................................................................................................................................... 101
QIIL Figure 10.
Other............................................................................................................................................................ 101
QIIM Figure 1.
Does your bank perceive any regulatory impediments to provide products and services? ........... 102
QIIM Figure 2.
Region .......................................................................................................................................................... 102
QIIM Figure 3.
Tier ............................................................................................................................................................... 103
viii
QIIM Figure 4.
Urban/Rural ............................................................................................................................................... 103
QIIIA. Figure 1.
Does your bank offer extended hours? .................................................................................................. 106
QIIIA. Figure 2.
Region .......................................................................................................................................................... 106
QIIIA. Figure 3.
Tiers.............................................................................................................................................................. 107
QIIIA. Figure 1.
Percent of Banks Offering Extended Hours by Branch Type ........................................................... 108
QIIIA. Figure 2.
Brick and Mortar Weekday Evening....................................................................................................... 108
QIIIA. Figure 3.
Brick and Mortar Saturday ....................................................................................................................... 108
QIIIA. Figure 4.
Brick and Mortar Sunday.......................................................................................................................... 108
QIIIA. Figure 5.
Region: Brick and Mortar Weekday Evening........................................................................................ 109
QIIIA. Figure 6.
Region: Brick and Mortar Saturday......................................................................................................... 109
QIIIA. Figure 7.
Region: Brick and Mortar Sunday ........................................................................................................... 109
QIIIA. Figure 8.
Tier ............................................................................................................................................................... 110
QIIIA. Figure 9.
Retail Weekday Evening ........................................................................................................................... 110
QIIIA. Figure 10. Retail Saturday ............................................................................................................................................ 110
QIIIA. Figure 11. Retail Sunday .............................................................................................................................................. 110
QIIIA. Figure 12. Region .......................................................................................................................................................... 111
QIIIA. Figure 13. Tier ............................................................................................................................................................... 111
QIIIA. Figure 14. Limited Service Weekday Evening.......................................................................................................... 112
QIIIA. Figure 15. Limited Service Saturday........................................................................................................................... 112
QIIIA. Figure 16. Limited Service Sunday............................................................................................................................. 112
QIIIA. Figure 17. Region: Limited Service Weekday Evening ........................................................................................... 112
QIIIA. Figure 18. Tier ............................................................................................................................................................... 113
QIIIA. Figure 19. Urban/Rural ............................................................................................................................................... 113
QIIIA. Figure 20. Urban/Rural ............................................................................................................................................... 114
QIIIA. Figure 21. Urban/Rural ............................................................................................................................................... 114
QIIIB. Figure 1.
Languages other than English Spoken by Branch Staff ...................................................................... 114
QIIIB. Figure 2.
Spanish......................................................................................................................................................... 115
QIIIB. Figure 3.
Chinese ........................................................................................................................................................ 115
QIIIB. Figure 4.
Vietnamese.................................................................................................................................................. 115
QIIIB. Figure 5.
Korean ......................................................................................................................................................... 115
QIIIB. Figure 6.
Tagalog ........................................................................................................................................................ 115
QIIIB. Figure 7.
Other............................................................................................................................................................ 115
QIIIB. Figure 8.
Does the bank have staff that speaks a language other than English?.............................................. 115
QIIIB. Figure 9.
Region: Spanish......................................................................................................................................... 116
QIIIB. Figure 10.
Region: Chinese......................................................................................................................................... 116
QIIIB. Figure 11.
Region: Vietnamese ................................................................................................................................... 116
QIIIB. Figure 12.
Region: Korean .......................................................................................................................................... 117
ix
QIIIB. Figure 13.
Region: Tagalog.......................................................................................................................................... 117
QIIIB. Figure 14.
Region: Other ............................................................................................................................................. 117
QIIIB. Figure 15.
Tier: Spanish/Chinese/Vietnamese........................................................................................................ 117
QIIIB. Figure 16.
Tier: Korean/Tagalog/Other .................................................................................................................. 118
QIIIB. Figure 17.
Urban/Rural: Spanish/Chinese/Vietnamese.......................................................................................118
QIIIB. Figure 18.
Urban/Rural: Korean/Tagalog/Other................................................................................................... 118
QIIIC. Figure 1.
Has the bank modified its retail operations? ......................................................................................... 119
QIIIC. Figure 2.
Tier ............................................................................................................................................................... 119
QIIIC-1. Figure 1. Extended Banking Hours ......................................................................................................................... 120
QIIIC-1. Figure 2. Non-traditional Locations ........................................................................................................................ 120
QIIIC-1. Figure 3. New Branch Located in LMI Areas........................................................................................................ 120
QIIIC-1. Figure 4. Innovative Branch Design........................................................................................................................ 121
QIIIC-1. Figure 5. Internet or Mobile Banking...................................................................................................................... 121
QIIIC-1. Figure 6. External ATMs........................................................................................................................................... 121
QIIIC-1. Figure 7. Off-premise ATMs .................................................................................................................................... 121
QIIIC-1. Figure 8. Other............................................................................................................................................................ 121
QIIIC-1. Figure 9. Region: External ATMs ............................................................................................................................ 122
QIIIC-1. Figure 10. Region: Other ............................................................................................................................................. 122
QIIIC-1. Figure 11. Tier: Extended Banking Hours/Non-traditional Locations/New Branch Located in LMI Areas123
QIIIC-1. Figure 12. Tier: Innovative Branch Design/Internet or Mobile Banking/External ATMs ............................. 123
QIIIC-1. Figure 13. Tier: Off-premise ATMs/Other.............................................................................................................. 123
QIIIC-1. Figure 14. Rural ............................................................................................................................................................. 124
QIIIC-1. Figure 15. Urban ........................................................................................................................................................... 124
QIIID. Figure 1.
Percent of Banks Branch Strategies to Serve Un/Underbanked by Effort...................................... 125
QIIID. Figure 2.
Check Cashing............................................................................................................................................ 126
QIIID. Figure 3.
Money Orders............................................................................................................................................. 126
QIIID. Figure 4.
Kiosks for Check Cashing ........................................................................................................................ 126
QIIID. Figure 5.
Bill Payment................................................................................................................................................ 126
QIIID. Figure 6.
Prepaid Card ............................................................................................................................................... 127
QIIID. Figure 7.
Other............................................................................................................................................................ 127
QIIID. Figure 8.
Region: Check Cashing ............................................................................................................................ 127
QIIID. Figure 9.
Region: Money Orders.............................................................................................................................. 128
QIIID. Figure 10. Tier: Money Orders/Other ...................................................................................................................... 128
QIIID. Figure 11. Urban/Rural: Check Cashing/Money Orders/Kiosk for Check Cashing ....................................... 128
QIIID. Figure 12. Urban/Rural: Bill Payment/Prepaid Card/Other ................................................................................ 129
QIVA. Figure 1.
Do you cash business checks drawn on your bank for non-customers? .......................................... 134
QIVA. Figure 2.
Region .......................................................................................................................................................... 134
x
QIVA. Figure 3.
Do you charge a fee to cash on-us business checks? ........................................................................... 134
QIVA. Figure 4.
Region .......................................................................................................................................................... 135
QIVA. Figure 5.
Tier ............................................................................................................................................................... 135
QIVA. Figure 6.
Do you cash personal checks drawn on your bank for non-customers?.......................................... 135
QIVA. Figure 7.
Region .......................................................................................................................................................... 136
QIVA. Figure 8.
Do you charge a fee to cash personal checks drawn on your bank for non-customers?............... 136
QIVA. Figure 9.
Region .......................................................................................................................................................... 136
QIVA. Figure 10.
Tier ............................................................................................................................................................... 137
QIVA. Figure 11.
Do you cash business checks not drawn on your bank for non-customers?................................... 137
QIVA. Figure 12.
Region .......................................................................................................................................................... 137
QIVA. Figure 13.
Tier ............................................................................................................................................................... 138
QIVA. Figure 14.
Do you charge a fee to cash business checks not drawn on your bank for non-customers?........ 138
QIVA. Figure 15.
Do you cash payroll checks not drawn on your bank for non-customers?...................................... 138
QIVA. Figure 16.
Region .......................................................................................................................................................... 139
QIVA. Figure 17.
Tier ............................................................................................................................................................... 139
QIVA. Figure 18.
Do you charge a fee to cash payroll checks not drawn on your bank for non-customers?........... 139
QIVA. Figure 19.
Do you cash personal checks not drawn on your bank for non-customers?................................... 140
QIVA. Figure 20.
Region .......................................................................................................................................................... 140
QIVA. Figure 21.
Do you charge a fee to cash personal checks not drawn on your bank for non-customers?........ 140
QIVA. Figure 22.
Region .......................................................................................................................................................... 141
QIVA. Figure 23.
Do you cash government checks for non-customers?......................................................................... 141
QIVA. Figure 24.
Region .......................................................................................................................................................... 141
QIVA. Figure 25.
Tier ............................................................................................................................................................... 142
QIVA. Figure 26.
Do you charge a fee to cash government checks for non-customers?.............................................. 142
QIVA. Figure 27.
Region .......................................................................................................................................................... 142
QIVA. Figure 28.
Do you cash double endorsed checks for non-customers? ................................................................ 143
QIVA. Figure 29.
Do you charge a fee to cash double endorsed checks for non-customers? ..................................... 143
QIVA. Figure 30.
Urban/Rural ............................................................................................................................................... 144
QIVA. Figure 31.
Urban/Rural ............................................................................................................................................... 144
QIVA. Figure 32.
Urban/Rural ............................................................................................................................................... 145
QIVA. Figure 33.
Urban/Rural ............................................................................................................................................... 145
QIVB. Figure 1.
Does training include strategies for reaching out to the unbanked? ................................................. 146
QIVB. Figure 2.
Tier ............................................................................................................................................................... 147
QIVC. Figure 1.
Does the bank accept a driver’s license as a form of ID to cash a check for a non-customer? ... 149
QIVC. Figure 2.
Tier ............................................................................................................................................................... 149
QIVC. Figure 3.
Does the bank accept a state ID as a form of ID to cash a check for a non-customer? ............... 149
QIVC. Figure 4.
Does the bank accept a social security number as a form of ID to cash a check for a noncustomer? .................................................................................................................................................... 150
xi
QIVC. Figure 5.
Tier ............................................................................................................................................................... 150
QIVC. Figure 6.
Does the bank accept a passport as a form of ID to cash a check for a non-customer?............... 151
QIVC. Figure 7.
Does the bank accept a Military ID as a form of ID to cash a check for a non-customer?.......... 151
QIVC. Figure 8.
Tier ............................................................................................................................................................... 152
QIVC. Figure 9.
Does the bank accept a student ID as a form of ID to cash a check for a non-customer? .......... 152
QIVC. Figure 10.
Does the bank accept an employer letter as a form of ID to cash a check for a non-customer?. 153
QIVC. Figure 11.
Does the bank accept a Matrícula Consular card as a form of ID to cash a check for a noncustomer? .................................................................................................................................................... 153
QIVC. Figure 12.
Region .......................................................................................................................................................... 154
QIVC. Figure 13.
Tier ............................................................................................................................................................... 154
QIVC. Figure 14.
Does the bank accept a utility bill as a form of ID to cash a check for a non-customer? ............. 155
QIVC. Figure 15.
Does the bank accept a housing lease as a form of ID to cash a check for a non-customer? ...... 155
QIVC. Figure 16.
Does the bank accept an ITIN number as a form of ID to cash a check for a non-customer?... 156
QIVC. Figure 17.
Does the bank accept any other forms of ID to cash a check for a non-customer?...................... 156
QIVC-1. Figure 1. Do you offer check cashing cards? ......................................................................................................... 157
QIVC-1. Figure 2. Region .......................................................................................................................................................... 157
QIVC-2. Figure 1. Fingerprinting ............................................................................................................................................. 158
QIVC-2. Figure 2. Biometrics ................................................................................................................................................... 158
QIVC-2. Figure 3. None ............................................................................................................................................................ 158
QIVC-2. Figure 4. Other............................................................................................................................................................ 158
QIVC-2. Figure 5. Region: Fingerprinting ............................................................................................................................. 159
QIVC-2. Figure 6. Region: None............................................................................................................................................. 159
QIVC-2. Figure 7. Tier: Fingerprinting/Biometrics ............................................................................................................. 159
QIVC-2. Figure 8. Tier: None/Other ...................................................................................................................................... 160
QIVC-2. Figure 9. Urban/Rural ............................................................................................................................................... 160
QIVD. Figure 1.
Mean Fixed Fees per Transaction ........................................................................................................... 162
QIVD. Figure 2.
Mean Percentage of Transaction Fees (If priced as a percent of value) ........................................... 162
QIVD. Figure 3.
Do you offer bank/official checks for non-deposit customers?........................................................ 163
QIVD. Figure 4.
Region .......................................................................................................................................................... 163
QIVD. Figure 5.
Non-Customer Fee Statistics ................................................................................................................... 163
QIVD. Figure 7.
Do you offer money orders for non-deposit customers?.................................................................... 164
QIVD. Figure 8.
Region .......................................................................................................................................................... 164
QIVD. Figure 9.
Money Order Fees ..................................................................................................................................... 164
QIVD. Figure 10. Money Order Fees ..................................................................................................................................... 164
QIVD. Figure 11. Do you offer domestic wire transfers for non-deposit customers?................................................... 165
QIVD. Figure 12. Region .......................................................................................................................................................... 165
QIVD. Figure 13. Domestic Wire Transfer Fees .................................................................................................................. 165
QIVD. Figure 14. Domestic Wire Transfer Fees .................................................................................................................. 165
xii
QIVD. Figure 15. Do you offer international remittances for non-deposit customers? ................................................ 166
QIVD. Figure 16. Region .......................................................................................................................................................... 166
QIVD. Figure 17. Tier ............................................................................................................................................................... 166
QIVD. Figure 18. International Remittance Fees ................................................................................................................. 167
QIVD. Figure 19. International Remittance Fees ................................................................................................................. 167
QIVD. Figure 20. Do you offer international ACH transfers for non-deposit customers?........................................... 168
QIVD. Figure 21
International ACH Fees............................................................................................................................ 168
QIVD. Figure 22
International ACH Fees............................................................................................................................ 168
QIVD. Figure 23
Do you offer foreign currency exchange for non-deposit customers? ............................................. 168
QIVD. Figure 24
Region .......................................................................................................................................................... 169
QIVD. Figure 25
Tier ............................................................................................................................................................... 169
QIVD. Figure 26
Currency Exchange Fee ............................................................................................................................ 169
QIVD. Figure 27
Currency Exchange Fee ............................................................................................................................ 169
QIVD. Figure 28
Do you offer bill pay for non-deposit customers? ...............................................................................170
QIVD. Figure 29
Region .......................................................................................................................................................... 170
QIVD. Figure 30
Bill Pay Fees................................................................................................................................................ 170
QIVD. Figure 31
Bill Pay Fees................................................................................................................................................ 170
QIVD. Figure 32
Do you offer prepaid cards for non-deposit customers? .................................................................... 171
QIVD. Figure 33
Region .......................................................................................................................................................... 171
QIVD. Figure 34
Prepaid Card Fees ...................................................................................................................................... 171
QIVD. Figure 35
Prepaid Card Fees ...................................................................................................................................... 171
QIVD. Figure 36
Urban/Rural: Bank/Official Checks ..................................................................................................... 172
QIVD. Figure 37
Urban/Rural: Money Orders .................................................................................................................. 172
QIVD. Figure 38
Urban/Rural: Domestic Wire Transfers ............................................................................................... 172
QIVD. Figure 39
Urban/Rural: International Remittance ................................................................................................ 172
QIVD. Figure 40
Urban/Rural: Prepaid Cards ................................................................................................................... 172
QIVD-1. Figure 1 Does you bank offer lower prices for customers for these services?................................................ 173
QIVD-1. Figure 2 Tier ............................................................................................................................................................... 173
QIVE. Figure 1
Is you bank concerned about offering remittances due to regulatory requirements?..................... 174
QIVE. Figure 2
Region .......................................................................................................................................................... 174
QIVE. Figure 3
Tier ............................................................................................................................................................... 175
QIVE. Figure 4
Urban/Rural ............................................................................................................................................... 175
QVA. Figure 1
Acceptable Forms of Identification Required to Open a Checking Account.................................. 178
QVA. Figure 2
Driver’s License.......................................................................................................................................... 178
QVA. Figure 3
Passport ....................................................................................................................................................... 178
QVA. Figure 4
Social Security Number............................................................................................................................. 179
QVA. Figure 5
Matricula Consular..................................................................................................................................... 179
xiii
QVA. Figure 6
State ID........................................................................................................................................................ 179
QVA. Figure 7
ITIN............................................................................................................................................................. 179
QVA. Figure 8
Military ID................................................................................................................................................... 179
QVA. Figure 9
Other............................................................................................................................................................ 179
QVA. Figure 10
Region: Social Security Numbers ........................................................................................................... 180
QVA. Figure 11
Region: Matricula Consular Card ........................................................................................................... 180
QVA. Figure 12
Tier: Driver’s License/Passport/Social Security Number ................................................................. 180
QVA. Figure 13
Tier: Matricula Consular Card/ITIN/Other........................................................................................ 181
QVA. Figure 14
Urban/Rural: Drivers License/Passport/Social Security Number .................................................. 181
QVA. Figure 15
Urban/Rural: Matricula Consular Card/State ID/ITIN ................................................................... 181
QVA. Figure 16
Urban/Rural: Military ID/Other ........................................................................................................... 182
QVB. Figure 1
Utility Bills................................................................................................................................................... 182
QVB. Figure 2
Housing Lease ............................................................................................................................................ 182
QVB. Figure 3
Employer Letter/Pay Stub ....................................................................................................................... 182
QVB. Figure 4
Other............................................................................................................................................................ 182
QVB. Figure 5
None ............................................................................................................................................................ 183
QVB. Figure 6
Urban/Rural ............................................................................................................................................... 183
QVB. Figure 6
Account Screening and Risk Management Tools ................................................................................. 184
QVC. Figure 1
ChexSystems/Qualifile.............................................................................................................................. 184
QVC. Figure 2
Early Warning Services ............................................................................................................................. 184
QVC. Figure 3
OFAC Lists................................................................................................................................................. 184
QVC Figure 4
Credit Bureau Reports............................................................................................................................... 184
QVC. Figure 5
None ............................................................................................................................................................ 185
QVC. Figure 6
Other............................................................................................................................................................ 185
QVC. Figure 7
Region: ChexSystems/Qualifile.............................................................................................................. 185
QVC. Figure 8
Region: Credit Bureau.............................................................................................................................. 185
QVC. Figure 9
Tier: ChexSystems/ Early Warning Services........................................................................................ 186
QVC. Figure 10
Tier: OFAC Lists/Other ......................................................................................................................... 186
QVC. Figure 11
Urban/Rural: Check Systems/Qualifile/Early Warning Services/OFAC Lists ............................ 186
QVC. Figure 12
Urban/Rural: Credit Bureau Reports/None/Other........................................................................... 187
QVD. Figure 1
Can a customer open a checking account without a third-party screen?.......................................... 187
QVD. Figure 2
Can a customer open a savings account without a third-party screen?............................................. 187
QVD. Figure 3
Region: Can a customer open a checking account without a third-party screen? ........................... 187
QVD. Figure 4
Region: Can a customer open a savings account without a third-party screen?............................. 188
QVD. Figure 5
Urban/Rural ............................................................................................................................................... 188
QVD. Figure 6
Bank Policies on Opening/Overrides .................................................................................................... 188
QVE. Figure 1.
Automatically Rejected.............................................................................................................................. 189
xiv
QVE. Figure 2.
Decision is made at the discretion of the new account rep ................................................................ 189
QVE. Figure 3.
Decision is made at the discretion of the branch manager ................................................................. 189
QVE. Figure 4.
Submitted to a centralized office for review.......................................................................................... 189
QVE. Figure 5.
Other............................................................................................................................................................ 189
QVE. Figure 6.
Region .......................................................................................................................................................... 190
QVE. Figure 7.
Tier ............................................................................................................................................................... 190
QVE. Figure 8.
Tier ............................................................................................................................................................... 191
QVF. Figure 1.
Does the bank use credit reports or bureau scores as screening for new checking accounts? ..... 191
QVF. Figure 2.
Region .......................................................................................................................................................... 191
QVF. Figure 3.
Tier ............................................................................................................................................................... 192
QVG. Figure 1.
Reason for Declining Applications ......................................................................................................... 193
QVG. Figure 2.
Overall Calculated Rankings .................................................................................................................... 193
QVG. Figure 3.
Calculated Rankings by Tier..................................................................................................................... 194
QVG. Figure 4.
Statistics ....................................................................................................................................................... 194
QVG. Figure 5.
Insufficient ID............................................................................................................................................ 195
QVG. Figure 6.
Negative account screening due to prior closure or mismanagement............................................... 195
QVG. Figure 7.
Negative account screening due to potential fraud alert ..................................................................... 195
QVG. Figure 8.
No credit score/insufficient credit history ............................................................................................ 195
QVG. Figure 9.
Low credit score/poor credit record or history.................................................................................... 195
QVG. Figure 10.
Insufficient initial deposit ......................................................................................................................... 195
QVG. Figure 11.
Other 1......................................................................................................................................................... 196
QVG. Figure 12.
Other 2......................................................................................................................................................... 196
QVG. Figure 13.
Region .......................................................................................................................................................... 196
QVG. Figure 14.
Tier ............................................................................................................................................................... 197
QVH. Figure 1.
Does the bank offer “stepping stone” accounts? .................................................................................198
QVH. Figure 2.
Tier ............................................................................................................................................................... 198
QVIA. Figure 1.
Does the most entry level checking account have a minimum balance? .......................................... 202
QVIA. Figure 2.
Tier ............................................................................................................................................................... 202
QVIA-1. Figure 1. Statistics ....................................................................................................................................................... 203
QVIA-1. Figure 2. Minimum Balance (if required) Without Direct Deposit on an Entry-Level Checking Account. 204
QVIB. Figure 1.
Is check writing available for the most basic transaction account? ................................................... 205
QVIB. Figure 2
Statistics ....................................................................................................................................................... 205
QVIB. Figure 3.
Is an ATM card available for the most basic transaction account? ................................................... 206
QVIB. Figure 4.
Is an ATM card available for the most basic transaction account? ................................................... 206
QVIB. Figure 5.
Statistics ....................................................................................................................................................... 206
QVIB. Figure 6.
Is a debit card available for the most basic transaction account? ...................................................... 207
QVIB. Figure 7.
Region .......................................................................................................................................................... 207
xv
QVIB. Figure 9.
Is online bill pay available for the most basic transaction account? .................................................. 208
QVIB. Figure 10.
Statistics ....................................................................................................................................................... 208
QVIB. Figure 11.
Tier 1............................................................................................................................................................ 209
QVIB. Figure 12.
Tier 2............................................................................................................................................................ 209
QVIB. Figure 13.
Tier 3............................................................................................................................................................ 209
QVIB. Figure 14.
Urban and Rural......................................................................................................................................... 210
QVIC. Figure 1.
Does the bank charge a NSF fee on its most basic account? ............................................................. 210
QVIC-1. Figure 1. Standard NSF Fee...................................................................................................................................... 211
QVIC-1. Figure 2. New England: Standard NSF Fee......................................................................................................... 211
QVIC-1. Figure 3. Mid Atlantic: Standard NSF Fee ........................................................................................................... 211
QVIC-1. Figure 4. South Atlantic: Standard NSF Fee........................................................................................................ 211
QVIC-1. Figure 5. East South Central: Standard NSF Fee................................................................................................ 211
QVIC-1. Figure 6. West South Central: Standard NSF Fee............................................................................................... 211
QVIC-1. Figure 7. East North Central: Standard NSF Fee ............................................................................................... 211
QVIC-1. Figure 8. West North Central: Standard NSF Fee .............................................................................................. 212
QVIC-1. Figure 9. Mountain: Standard NSF Fee ................................................................................................................ 212
QVIC-1. Figure 10. Pacific: Standard NSF Fee...................................................................................................................... 212
QVIC-1. Figure 11. Tiers: Standard NSF Fee.......................................................................................................................... 212
QVIC-1. Figure 12. Rural: Standard NSF Fee ......................................................................................................................... 213
QVIC-1. Figure 13. Urban: Standard NSF Fee ........................................................................................................................ 213
QVIC-2. Figure 1. Does the bank offer programs to waive the NSF fee? ........................................................................ 213
QVIC-2. Figure 2. Tier ............................................................................................................................................................... 213
QVIC-2. Figure 3. Urban/Rural ............................................................................................................................................... 214
QVIC-3. Figure 1. Does the bank offer alerts to notify customers of low balances or NSF fees? ............................... 215
QVIC-4. Figure 1. Will the bank automatically close the account due to NSF fees or a negative balance?................. 215
QVIC-4. Figure 2. Region .......................................................................................................................................................... 216
QVIIA. Figure 1.
Savings Accounts and Programs ............................................................................................................. 218
QVIIA. Figure 2.
Does the bank offer basic savings accounts? ........................................................................................ 218
QVIIA. Figure 3.
Basic Savings Interest Rate....................................................................................................................... 219
QVIIA. Figure 4.
Tier: Basic Savings Interest Rate ............................................................................................................ 219
QVIIA. Figure 5.
New England: Basic Savings Interest Rate.......................................................................................... 220
QVIIA. Figure 6.
Mid-Atlantic: Basic Savings Interest Rate............................................................................................ 220
QVIIA. Figure 7.
South Atlantic: Basic Savings Interest Rate......................................................................................... 220
QVIIA. Figure 8.
East South Central: Basic Savings Interest Rate................................................................................. 220
QVIIA. Figure 9.
West South Central: Basic Savings Interest Rate................................................................................ 220
QVIIA. Figure 10. East North Central: Basic Savings Interest Rate ................................................................................ 220
QVIIA. Figure 11. West North Central: Basic Savings Interest Rate ............................................................................... 220
xvi
QVIIA. Figure 12. Mountain: Basic Savings Interest Rate ................................................................................................. 220
QVIIA. Figure 13. Pacific: Basic Savings Interest Rate....................................................................................................... 220
QVIIA. Figure 14. Does the bank offer Individual Development Accounts? .................................................................. 221
QVIIA. Figure 16. Individual Development Account Interest Rate...................................................................................221
QVIIA. Figure 17. Tier 1: Individual Development Account Interest Rate.................................................................... 222
QVIIA. Figure 18. Tier 2: Individual Development Account Interest Rate.................................................................... 222
QVIIA. Figure 19. Tier 3: Individual Development Account Interest Rate.................................................................... 222
QVIIA. Figure 20. Does the bank offer IRS VITA programs? ........................................................................................... 223
QVIIA. Figure 21. Tier ............................................................................................................................................................... 223
QVIIA. Figure 22. Weighted Statistics: IRS VITA Interest Rate ........................................................................................ 223
QVIIA. Figure 23. Does the bank offer Money Market accounts? .....................................................................................224
QVIIA. Figure 24. Weighted Statistics: MMA Interest Rate ................................................................................................ 224
QVIIA. Figure 25. Does the bank offer specialized savings clubs? .................................................................................... 224
QVIIA. Figure 26. Region .......................................................................................................................................................... 225
QVIIA. Figure 27. Weighted Statistics: Specialized Savings Interest Rate.........................................................................225
QVIIA. Figure 28. Does the bank offer workplace-based savings programs? .................................................................. 225
QVIIA. Figure 29. Region .......................................................................................................................................................... 226
QVIIA. Figure 30. Tier ............................................................................................................................................................... 226
QVIIA. Figure 31. Workplace Interest Rate .......................................................................................................................... 226
QVIIA. Figure 32. Does the bank offer other savings accounts?........................................................................................ 227
QVIIA. Figure 33. Region .......................................................................................................................................................... 227
QVIIA. Figure 34. Tier ............................................................................................................................................................... 227
QVIIA. Figure 35. Other Account Interest Rate .................................................................................................................. 228
QVIIA. Figure 36. Rural ............................................................................................................................................................. 228
QVIIA. Figure 37. Urban ........................................................................................................................................................... 228
QVIIA. Figure 38. Rural ............................................................................................................................................................. 229
QVIIA. Figure 39. Urban ........................................................................................................................................................... 229
QVIIB. Figure 1.
Does the bank partner with organizations to promote savings products? ....................................... 230
QVIIB. Figure 2.
Region .......................................................................................................................................................... 230
QVIIB. Figure 3.
Tier ............................................................................................................................................................... 231
QVIIB. Figure 4.
Urban/Rural ............................................................................................................................................... 231
QVIIIA. Figure 1. Funds Availability ...................................................................................................................................... 234
QVIIIA. Figure 2. How soon are funds available for a business check drawn on your bank? ...................................... 234
QVIIIA. Figure 3. Region .......................................................................................................................................................... 234
QVIIIA. Figure 4. Tier ............................................................................................................................................................... 235
QVIIIA. Figure 4. How soon are funds available for a personal check drawn on your bank? ...................................... 235
QVIIIA. Figure 5. Region .......................................................................................................................................................... 236
xvii
QVIIIA. Figure 6. Tier ............................................................................................................................................................... 236
QVIIIA. Figure 7. How soon are funds available for a payroll check not drawn on your bank?.................................. 236
QVIIIA. Figure 8. Region .......................................................................................................................................................... 237
QVIIIA. Figure 9. Tier ............................................................................................................................................................... 237
QVIIIA. Figure 10. How soon are funds available for a local business check not drawn on your bank?...................... 238
QVIIIA. Figure 11. Region .......................................................................................................................................................... 238
QVIIIA. Figure 12. How soon are funds available for a personal check not drawn on your bank? ............................... 239
QVIIIA. Figure 13. Region .......................................................................................................................................................... 239
QVIIIA. Figure 14. How soon are funds available for a government check?..................................................................... 240
QVIIIA. Figure 15. Region .......................................................................................................................................................... 240
QVIIIA. Figure 16. Tier ............................................................................................................................................................... 241
QVIIIA. Figure 17. How soon are funds available for a double endorsed check?............................................................. 241
QVIIIA. Figure 18. Region .......................................................................................................................................................... 242
QVIIIB. Figure 1. Can a customer get an advance loan on the funds from a deposited check or direct deposit? .... 243
QVIIIB. Figure 2. Tier ............................................................................................................................................................... 243
QVIIIB-2. Figure 1. Statistics ....................................................................................................................................................... 244
QVIIIB-3. Figure 1. All Checks ................................................................................................................................................... 245
QVIIIB-3. Figure 2. Business Checks, but Not Personal Checks .......................................................................................... 245
QVIIIB-3. Figure 3. Government Checks.................................................................................................................................. 245
QVIIIB-3. Figure 4. Payroll Checks Only .................................................................................................................................. 245
QVIIIB-3. Figure 5. Regularly Scheduled Direct Deposits ..................................................................................................... 245
QVIIIB-3. Figure 6. Other............................................................................................................................................................ 245
QIXA. Figure 1.
Percent of Banks Offering Credit Cards and Loans ............................................................................ 248
QIXA. Figure 2.
Does the bank offer unsecured loans up to $5000? ............................................................................. 248
QIXA. Figure 3.
Region .......................................................................................................................................................... 249
QIXA. Figure 4.
Tier ............................................................................................................................................................... 249
QIXA. Figure 5.
Urban/Rural ............................................................................................................................................... 249
QIXA-1. Figure 1. Eligibility Requirements for Obtaining an Unsecured Closed-End Personal Loan........................ 250
QIXA-1. Figure 2. Review of Credit History......................................................................................................................... 250
QIXA-1. Figure 3. Proof of Income ........................................................................................................................................ 250
QIXA-1. Figure 4. Minimum Credit Score.............................................................................................................................. 250
QIXA-1. Figure 5 Deposit Relationship ................................................................................................................................. 250
QIXA-1. Figure 6. Direct Deposit............................................................................................................................................ 251
QIXA-1. Figure 7. Other............................................................................................................................................................ 251
QIXA-1. Figure 8. Region .......................................................................................................................................................... 251
QIXA-1. Figure 9. Region .......................................................................................................................................................... 251
QIXA-1. Figure 10. Tier ............................................................................................................................................................... 252
xviii
QIXA-1. Figure 11. Tier ............................................................................................................................................................... 252
QIXA-1. Figure 12. Tier ............................................................................................................................................................... 252
QIXA-1. Figure 13. Urban/Rural ............................................................................................................................................... 253
QIXA-1. Figure 14. Urban/Rural ............................................................................................................................................... 253
QIXA-2. Figure 1. Statistics: Weighted .................................................................................................................................... 254
QIXA-2. Figure 2. Tier 1............................................................................................................................................................ 254
QIXA-2. Figure 3. Tier 2............................................................................................................................................................ 255
QIXA-2. Figure 4. Tier 3............................................................................................................................................................ 255
QIXA-2. Figure 5. New England.............................................................................................................................................. 255
QIXA-2. Figure 6. Mid-Atlantic................................................................................................................................................ 256
QIXA-2. Figure 7. South Atlantic............................................................................................................................................. 256
QIXA-2. Figure 8. East South Central..................................................................................................................................... 256
QIXA-2. Figure 9. West South Central.................................................................................................................................... 257
QIXA-2. Figure 10. East North Central .................................................................................................................................... 257
QIXA-2. Figure 11. West North Central ................................................................................................................................... 257
QIXA-2. Figure 12. Mountain ..................................................................................................................................................... 257
QIXA-2. Figure 13. Pacific........................................................................................................................................................... 258
QIXA-2. Figure 14. Urban ........................................................................................................................................................... 258
QIXA-2. Figure 15. Rural ............................................................................................................................................................. 258
QIXA-3. Figure 1. How long does it take to originate an unsecured loan? ....................................................................... 259
QIXA-3. Figure 2. Region .......................................................................................................................................................... 259
QIXA-3. Figure 3. Tier ............................................................................................................................................................... 260
QIXA-3. Figure 4. Urban/Rural ............................................................................................................................................... 260
QIXB. Figure 1.
Does the bank offer small dollar loans? ................................................................................................. 261
QIXB. Figure 2.
Region .......................................................................................................................................................... 261
QIXB. Figure 3.
Tier ............................................................................................................................................................... 262
QIXB. Figure 4.
Urban/Rural ............................................................................................................................................... 262
QIXC. Figure 1.
Does the bank offer tax refund anticipation loans? ............................................................................. 264
QIXC. Figure 2.
Region .......................................................................................................................................................... 264
QIXC. Figure 3.
Tier ............................................................................................................................................................... 264
QIXC. Figure 4.
Urban/Rural ............................................................................................................................................... 265
QIXC-1. Figure 1. Statistics ....................................................................................................................................................... 265
QIXD. Figure 1.
Does the bank offer consumer credit cards?......................................................................................... 266
QIXD. Figure 2.
Region .......................................................................................................................................................... 266
QIXD. Figure 3.
Tier ............................................................................................................................................................... 267
QIXD. Figure 4.
Urban/Rural ............................................................................................................................................... 267
QIXD-1. Figure 1. Summary of Bank Requirements for Credit Cards............................................................................... 268
xix
QIXD-1. Figure 2. Social Security Number............................................................................................................................. 268
QIXD-1. Figure 3. Minimum Credit Score.............................................................................................................................. 268
QIXD-1. Figure 4. Review of Credit History .......................................................................................................................... 268
QIXD-1. Figure 5. Proof of Income ........................................................................................................................................ 268
QIXD-1. Figure 6. Other............................................................................................................................................................ 268
QIXD-2. Figure 1. Statistics ....................................................................................................................................................... 269
QIXD-2. Figure 2. Tier 1............................................................................................................................................................ 270
QIXD-2. Figure 3. Tier 2............................................................................................................................................................ 270
QIXD-2. Figure 4. Tier 3............................................................................................................................................................ 270
QIXD-2. Figure 5. New England.............................................................................................................................................. 271
QIXD-2. Figure 6. Mid-Atlantic................................................................................................................................................ 271
QIXD-2. Figure 7. South Atlantic............................................................................................................................................. 271
QIXD-2. Figure 8. East South Central..................................................................................................................................... 272
QIXD-2. Figure 9. West South Central.................................................................................................................................... 272
QIXD-2. Figure 10. East North Central .................................................................................................................................... 272
QIXD-2. Figure 11. West North Central ................................................................................................................................... 273
QIXD-2. Figure 12. Mountain ..................................................................................................................................................... 273
QIXD-2. Figure 13. Pacific........................................................................................................................................................... 273
QIXD-3. Figure 1. Does having a deposit account improve a customer's ability to receive a credit card? .................. 274
QIXD-4. Figure 1. Does the bank offer secured credit cards for customers who don't qualify for a traditional one?275
QIXD-4. Figure 2. Region .......................................................................................................................................................... 275
QIXD-4. Figure 3. Tier ............................................................................................................................................................... 275
QIXD-4. Figure 4. Urban/Rural ............................................................................................................................................... 276
QIXD-4a. Figure 1. Statistics ....................................................................................................................................................... 276
QIXD-5. Figure 1. Can a cardholder 'graduate' from a secured card to a traditional credit card? ................................. 277
CS. Figure 1.
Strategy ........................................................................................................................................................ 281
CS. Figure 2.
Institutional Characteristics...................................................................................................................... 282
CS. Figure 3.
Geography................................................................................................................................................... 283
Figure 1.
Bank Size (Assets)...................................................................................................................................... B-1
Figure 2.
Tier 1: Bank Size ........................................................................................................................................ B-2
Figure 3.
Tier 2: Bank Size ........................................................................................................................................ B-2
Figure 4.
Tier 3: Bank Size ........................................................................................................................................ B-2
Figure 5.
New England Division: Bank Size .......................................................................................................... B-2
Figure 6.
Middle Atlantic Division: Bank Size ....................................................................................................... B-2
Figure 7.
South Atlantic Division: Bank Size ......................................................................................................... B-2
Figure 8.
East South Central Division: Bank Size ................................................................................................. B-2
Figure 9.
West South Central Division: Bank Size ................................................................................................ B-2
xx
Figure 10.
East North Central Division: Bank Size ................................................................................................ B-2
Figure 11.
West North Central Division: Bank Size ............................................................................................... B-2
Figure 12.
Mountain Division: Bank Size ................................................................................................................. B-2
Figure 13.
Pacific Division: Bank Size....................................................................................................................... B-3
Figure 14.
Urban: Bank Size -- Unweighted ............................................................................................................. B-3
Figure 15.
Rural: Bank Size -- Unweighted............................................................................................................... B-3
Figure 16.
Overall Branch Statistics........................................................................................................................... B-4
Figure 17.
Tier 1: Branch Statistics -- Weighted ...................................................................................................... B-4
Figure 18.
Tier 2: Branch Statistics -- Weighted ...................................................................................................... B-4
Figure 19.
Tier 3: Branch Statistics -- Weighted ...................................................................................................... B-4
Figure 20.
New England Division: Branch Statistics -- Weighted....................................................................... B-5
Figure 21.
Middle Atlantic Division: Branch Statistics -- Weighted.................................................................... B-5
Figure 22.
South Atlantic Division: Branch Statistics -- Weighted...................................................................... B-5
Figure 23.
East South Central Division: Branch Statistics -- Weighted.............................................................. B-6
Figure 24.
West South Central Division: Statistics -- Weighted........................................................................... B-6
Figure 25.
East North Central Division: Branch Statistics -- Weighted ............................................................. B-6
Figure 26.
West North Central Division: Branch Statistics -- Weighted ............................................................ B-6
Figure 27.
Mountain Division: Branch Statistics -- Weighted .............................................................................. B-6
Figure 28.
Pacific Division: Branch Statistics -- Weighted.................................................................................... B-7
Figure 29.
Urban: Branch Statistics -- Weighted...................................................................................................... B-7
Figure 30.
Rural: Branch Statistics -- Weighted ....................................................................................................... B-7
xxi
xxii
Chapter
1
Study Summary
A. Background
This report summarizes and interprets findings from a nationwide survey of FDIC-insured
depository institutions about their efforts to serve unbanked and underbanked individuals and
families.1 The survey was conducted by Dove Consulting, a division of Hitachi Consulting, on behalf
of the Federal Deposit Insurance Corporation (FDIC).
The FDIC is required by law to conduct ongoing surveys “on efforts by insured depository
institutions to bring those 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 (hereafter in this section referred to as the ‘unbanked’) into the conventional finance
system.”2 This first survey—Banks’ Efforts to Serve the Unbanked and Underbanked—had the following
three objectives:
1. Identify and quantify the extent to which FDIC-insured institutions outreach, serve, and
meet the banking needs of the unbanked and underbanked.
2. Identify challenges affecting the ability of insured institutions to serve the unbanked and
underbanked, including but not limited to cultural, language, identification issues, and
spatial/location issues.
3. Identify innovative efforts depositories use to serve the unbanked and underbanked,
including community storefronts, small dollar loans, basic banking accounts, remittances,
and other low-cost products and services used by the unbanked and underbanked.
These objectives were designed to address a number of potential research topics, including the
following
A) “To what extent do insured depository financial institutions promote financial education and
financial literacy outreach?
B) Which financial education efforts appear to be the most effective in bringing ‘unbanked’
individuals and families into the conventional financial system?
C) What efforts are insured institutions making at converting ‘unbanked’ money order, wire
transfer, and international remittance customers into conventional account holders?
D) What cultural, language, and identification issues as well as transaction costs appear to most
prevent ‘unbanked’ individuals from establishing conventional accounts?
E) What is a fair estimate of the size and worth of the ‘unbanked’ market in the United States?” 3
For the purposes of this survey, unbanked individuals and families are those who rarely, if ever, held a checking account, savings account, or other
type of transaction or check cashing account at an insured depository institution in the conventional finance system. Underbanked individuals and
families are those who have an account with an insured depository institution but also rely on nonbank alternative financial service providers for
transaction services or high-cost credit products.
1
2
The Federal Deposit Insurance Reform Conforming Amendments Act of 2005 (Pub. L. 109-173).
3The
FDIC plans to address this question through a separate survey effort to be conducted jointly with the U.S. Bureau of the Census as a Supplement
to the Census Bureau’s Current Population Survey in January 2009. The goals of that survey effort are to gather accurate estimates of the number of
1
Study Summary
B. Methodology
A nationwide survey of FDIC-insured depository institutions was conducted to collect information
about banks’ efforts to serve the unbanked and underbanked (a copy of the survey is provided in
Appendix A). The survey questionnaire was approved by the Office of Management and Budget
(OMB Form # 3064-0158) under the Paperwork Reduction Act (PRA). Survey packages with forms
and instructions were mailed in April 2008 to a nationally representative sample of 1,283 banks with
retail branch operations. The survey used a stratified design based on bank asset size, or tiers. Tier 1
included the top 25 largest banks; Tier 2 included banks with assets of $1 billion or more excluding
Tier 1 participants; and Tier 3 included banks with assets under $1 billion. To improve sampling
efficiency, the larger banks were sampled at a higher rate than the smaller banks. The sampling rates
for the three tiers were 100 percent, 47.5 percent, and 14.4 percent, respectively.
Dove Consulting received 685 completed surveys, which was a response rate of 53.7 percent.
Response rates were 96.0 percent for Tier 1 banks, 60.7 percent for Tier 2, and 50.8 percent for Tier
3. Together, the banks that responded to the survey had more than $8.3 trillion in assets—
approximately 70 percent of the total assets for FDIC-insured institutions in the United States—at
the time the sample was drawn. Due to the stratified design and high response rate among larger
banks, responding banks represented a substantial percentage of retail branch operations and
consumer banking services.
In addition to the survey, Dove Consulting conducted in-depth interviews and developed 16 case
studies on surveyed banks that offer innovative approaches to serving unbanked and underbanked
individuals.
C. Report Format
This report is organized into 12 chapters that highlight and interpret the survey data.4 Chapter 2
describes the objectives and methodology. Chapters 3 through 11 provide the results for each of the
nine sections of the survey. Specifically, Chapter 3 presents information about participating banks’
characteristics and retail bank information; Chapter 4 presents information on banks’ education and
outreach efforts; Chapters 5 through 7 present information on banks’ account opening and
onboarding (i.e., account initiation) processes and products offered by banks to non-customers; and
Chapters 8 through 11 present results related to the types of low-cost deposit, savings, payment, and
credit products offered by banks that are used by the unbanked and underbanked. Chapter 12
contains the case studies.
unbanked and underbanked households in the United States, their demographic characteristics, and reasons why they are unbanked and/or
underbanked.
Throughout the report, the percentages provided are weighted by the reciprocals of stratum selection probabilities and response rates to provide
representative results for all banks in the sample frame. The sample frame includes banks with retail operations but excludes wholesale, special purpose
industrial, and credit card banks. Dove Consulting did not independently verify all survey responses, but did follow-up with banks that provided
information to clarify data that appeared to be inconsistent with tier group statistics.
4
2
Study Summary
The following sections highlight information from the 12 chapters and are organized by the survey’s
three objectives.
I.
Banks’ Efforts with Education and Outreach
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
Retail Branch Information
•
•
•
Services Provided to NonCustomers
Account Opening &
Onboarding
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other low
cost accounts, products and
services used by the
un/underbanked.
Deposit Products
•
• Savings Accounts
• Payment Products
• Credit Products
Objective 1: Identify and quantify the extent to which insured depository institutions outreach, serve, and meet the
banking needs of the unbanked and underbanked. (Education and Outreach; Chapter 4)
By educating unbanked and/or underbanked individuals about bank products and services, insured
institutions can begin to establish relationships with these individuals and ease their entry into the
mainstream banking system. Chapter 4 examines banks’ perception of whether unbanked and
underbanked individuals live in their market area; financial education materials provided to these
individuals; financial education and outreach efforts; effectiveness of bank education and outreach
programs; activities to bring the unbanked and/or underbanked into the financial mainstream; and
challenges in serving or targeting unbanked and/or underbanked customers.
A. Perceptions of Unbanked and/or Underbanked in Area Served and
Educational Efforts
Most banks are aware that unbanked and/or underbanked populations exist and live in their market
areas, and the majority of banks provide educational materials and conduct outreach activities to
help bring these individuals into the banking mainstream. Specifically, the stratum and response
adjusted weighting shows that:
An estimated 73 percent of banks in the United States recognize that unbanked or underbanked
individuals live in their service area. Specifically, all Tier 1 banks, 90 percent of Tier 2 banks,
and 71 percent of Tier 3 banks are aware of these populations.
Sixty-four percent of all banks provide financial education materials.
3
Study Summary
Thirty-nine percent of banks provide basic banking educational materials (either literature
available in bank branches or content on the bank Web site) aimed at unbanked and/or
underbanked individuals.
More than half (53 percent) of banks teach financial literacy and education sessions that target
unbanked and/or underbanked customers. Of the banks that teach these sessions, 85 percent
teach basic banking.
Less than half of banks (37 percent), however, participate in education and outreach with other
organizations. Of those that do, the most common places for outreach are high schools and
community-based organizations.
Off-premise educational outreach aimed at the unbanked or underbanked is provided by 58
percent of banks. Among these, more than 75 percent of banks hold outreach sessions at
schools.
B. Effectiveness of Financial Education Efforts
Based on the survey results, the most effective education and outreach activities for bringing
unbanked individuals into the conventional banking system are formal classroom education,
community outreach, and participation with other organizations, particularly employers, to expand
employee access to direct deposit. Educational materials aimed at these populations tend to be
brochures and pamphlets, which may require non-customers to learn about bank services and
products on their own. Case studies suggest that banks that are the most successful in educating
non-customers place a high value on their relationships with community organizations and other
stakeholders who provide important strategies for reaching unbanked consumers.
The survey results, explained in detail in Chapter 4, show that an estimated 64 percent of banks that
provide materials designed to increase bank account ownership among the unbanked and
underbanked have not evaluated the effectiveness of their financial education programs.
However, among banks that provide materials and that have evaluated the results, 86 percent
report that the materials have helped them establish relationships with the unbanked.
Survey results reveal that formal classroom-style financial education sessions are the most
effective type of education or outreach program used to bring unbanked and underbanked
individuals into the banking mainstream. Participation with other organizations and outreach
visits are the second and third most effective methods.
4
Study Summary
Community outreach efforts also are effective for developing and promoting banking services and
products that meet the needs of unbanked and underbanked populations.
Slightly more than one-third (37 percent) of banks participate in education or outreach with
outside organizations. Unfortunately, few banks are able to quantify the success of such
programs.
One challenge in assessing their success is that banks only know if an individual is a customer
of their bank; they do not have a reliable system for determining whether an individual is
unbanked or an underbanked customer of another bank.
Employer programs to expand employees’ access to direct deposit and bank accounts might hold
special promise for the unbanked because direct deposit provides immediate availability of funds
and removes fees associated with check cashing.
Outreach to employers encouraging use of direct deposit for payroll is key for bringing unbanked
and underbanked individuals into the conventional financial system.
Only 38 percent of banks work with corporate and business customers to provide services to
their unbanked employees, and, of those, only 14 percent offer payroll cards which can be used
to provide payment directly onto a debit card.
Direct deposit reduces the need for unbanked and underbanked individuals to use alternative
service providers, such as check cashers and payday lenders.
In open-ended responses, banks cite the most effective strategies for bringing unbanked individuals
and families into the conventional banking system as outreach (27 percent of banks recommended
it), offering low-cost products and services (recommended by 21 percent of banks), and offering
educational programs and materials (21 percent).
Depository institutions cite the lack of profitability as a significant barrier to serving unbanked and
underbanked individuals. However, 77 percent of all banks reported that they have not conducted
research on the potential unbanked customers in their Community Reinvestment Act (CRA)
assessment areas, suggesting that untapped opportunities to serve this market may exist.
C. Case Study Highlights: Education and Outreach
Case studies suggest that banks that are successful in educating non-customers have developed
relationships with community organizations and strategies involving important stakeholders within
and outside the bank. While the types of initiatives undertaken by the case study banks vary, they
exemplify effective approaches that leverage partnerships with third-party organizations, such as
employers, schools, nonprofit organizations, and assistance agencies. These programs bring
education to the places that unbanked populations frequent and feel most comfortable, increasing
the number of individuals reached.
5
Study Summary
Institution
Target Population
Initiative
Amalgamated Bank
(New York, NY)
Union workers, primarily
immigrant and low income
Created educational curriculum specific to needs of target market;
partners with union and local government agencies to deliver
outreach and products
Citibank, NA
(New York, NY)
Low-income, urban
individuals in their area
Leverages United Way case management and outreach expertise in
area to market, educate, and open entry-level accounts for clients
The Commerce Bank
of Washington
(Seattle, WA)
Homeless population,
mentally ill individuals
Automated check cashing processes and improved access to
banking services for unbankable individuals by providing backoffice systems and support to The Compass Center, a nonprofit
assistance agency
Fort Morgan State
Bank
(Fort Morgan, CO)
Employees of food
processing company in
Colorado
Established branch at plant facility, introduced services during new
employee orientation and opened accounts to encourage direct
deposit of paychecks
International Bank of
Commerce
(Laredo, TX)
Elementary school
students in predominantly
Mexican immigrant
communities in their areas
Partners with elementary schools to create student-run “microcommunities,” simulated societies in which students earn wages in
mock currency, conduct banking transactions, and learn to manage
finances
Mitchell Bank
(Milwaukee, WI)
High school students in
large Mexican and Central
American immigrant
communities in their areas
Partners with a local high school to establish full-service branch on
campus to open accounts for students, provide financial literacy
education, and build trust and awareness in wider community
Monroe Bank and
Trust
(Monroe, MI)
Low- to moderate-income
individuals in the bank’s
county, many of whom are
affected by rising
unemployment
Established education program, an off-shoot of its existing
volunteer organization, to provide educational outreach in its
markets by bringing seminars and programs to faith-based
organizations, service agencies, and high schools
Common Lessons Learned
Financial education is the primary vehicle for serving the unbanked and underbanked populations and is essential to
help them make informed decisions.
Employers and community organizations can provide important insights to banks seeking to assess and understand
the needs of the unbanked market.
Partnerships with third-party organizations that leverage core competencies can supplement and complement bank
initiatives to provide outreach and serve the community.
Building strong relationships with trusted community organizations presents valuable opportunities for banks to
establish their presence and increase awareness in their service areas, which are particularly important when working
with unbanked populations.
Developing and executing a successful strategy requires innovative approaches that involve stakeholders both
within and outside of the bank.
6
Study Summary
II.
Banks’ Efforts to Address Obstacles and
Access
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
•
•
Retail Branch Information
•
Account Opening &
Onboarding
Services Provided to NonCustomers
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other low
cost accounts, products and
services used by the
un/underbanked.
• Deposit Products
• Savings Accounts
• Payment Products
• Credit Products
Objective 2: Identify challenges affecting the ability of insured depository institutions to serve the unbanked and
underbanked, including but not limited to cultural, language, identification issues, and spatial/location issues.
(Obstacles and Access; Chapters 5-7)
For unbanked and underbanked individuals to enter the banking mainstream, insured institutions
must make retail branches more accessible, offer appropriate products and services to meet
customer needs, and ensure that the procedures for opening an account are straightforward.
Chapters 5, 6, and 7 of this report examine banks’ efforts to address these challenges. Survey results
show that banks have modified their retail branch operations in a variety of ways that may increase
access for unbanked and/or underbanked individuals.
A. Retail Branch Information (Chapter 5)
i. Modifications
Banks’ efforts to make retail branches more accessible to unbanked and underbanked individuals
include extending branch hours, employing staff that can speak foreign languages, and changing
operations to make them more welcoming. These efforts provide unbanked and underbanked
consumers more opportunities to take advantage of bank services.
Based on survey results, an estimated 59% of banks have extended their retail branch hours,
with the most common hours being later than 5:00 p.m. on weekdays for all types of branches.
Some of the banks that extended their hours now operate until 1:00 p.m. on Saturday and/or
offer Sunday hours.
More than half (52 percent) of banks now have staff that can speak a language other than
English. Almost half (47 percent) of banks have branch staff that can speak Spanish, while 4
percent have staff that speak Chinese, 3 percent have staff that speak Vietnamese, 2 percent
have staff that speak Korean, and 2 percent have staff that speak Tagalog.
7
Study Summary
Sixty-four percent of banks have modified their retail operations over the past five years to
make it easier, more welcoming, or more convenient for unbanked and/or underbanked
consumers to take advantage of banking services.
The most common way that banks have modified their operations is by offering Internet or
mobile banking, which is now available at 73 percent of banks. Mobile banking includes both
mobile branches that go to customers’ work or residential locations, and technology such as
mobile telephones and personal digital assistant (PDA) devices.
ii. Strategies
Banks can and do provide important financial services to unbanked and/or underbanked
individuals; however, many banks may hesitate to offer products and transaction services to
individuals who do not hold conventional deposit-based transaction accounts because of the
perceived challenges and risks. For example, while check cashing presents opportunities for banks to
better serve unbanked and/or underbanked individuals, many responding banks reported that
cashing checks for non-customers presents risks and that regulatory requirements impede serving
some potential customers due to identification issues. Consequently, less than one-third of banks
will cash payroll checks drawn on another bank for non-customers. Banks also appear to limit
money orders and other important bill payment products for non-customers.
Identification issues can present challenges for unbanked and underbanked consumers who
want to open an account.
— Banks generally require government-issued forms of identification to open a new account.
State-issued drivers’ licenses (99 percent) and passports (92 percent) are the most
commonly accepted forms of identification.
— Matricula Consular cards are accepted by less than one-third of banks (27 percent).
In addition, unbanked and/or underbanked individuals with blemished credit histories likely
face additional challenges to account opening because of widespread use of risk management
screening tools, such as the ChexSystems and third-party credit score databases.
For all banks, the most common branch strategies to serve unbanked and/or underbanked
individuals are check cashing, with 49 percent of all banks offering this service, followed by offering
money orders (41 percent), and bill payment services (18 percent).
ES Figure 1.
Indicate efforts your bank makes as part of its branch strategy to serve un/under banked in
your market areas.
60%
50%
40%
30%
20%
10%
0%
Check
Cashing
Money
Orders
Bill Payment
8
Prepaid
Cards
Kiosks for
Check
Cashing
Study Summary
B. Services Provided to Non-Customers (Chapter 6)
i. Check Cashing
Insured institutions appear to believe that they have a limited ability to serve unbanked consumers
who would like money orders, wire transfers, and international remittances because of compliance
concerns under the Patriot Act, Anti-Money Laundering (AML) guidelines, and Bank Secrecy Act
(BSA) regulations. Although the survey did not specifically ask about these policies, banks
commented that they had concerns about AML, BSA, and other federal regulations. Banks also are
reluctant to cash checks for non-customers for reasons related to regulatory compliance,
identification, and loss prevention (fraud) concerns.
In an open-ended question, 75 percent of responding banks reported concerns about offering
check cashing transactions to non-customers because of the amount of money they would
stand to lose if fraud were to occur. For example, the lack of valid identification makes it
difficult to serve non-customers.
Forty percent of banks perceive regulatory impediments that limit their ability to provide
products and services to unbanked and/or underbanked individuals.
Banks do not know if an individual is unbanked or not, so they tend to view individuals as either
customers or non-customers.
Nearly all banks cash business checks (96 percent) and personal checks (96 percent) drawn on
their bank for non-customers.
Slightly more than half (58 percent) of banks will cash government checks for non-customers.
Of the banks that cash government checks, 58 percent charge a fee.
Most banks will not cash checks drawn on another bank for non-customers. Thirty-two percent
of banks cash payroll checks not drawn on their bank for non-customers, and 23 percent cash
business checks not drawn on their bank. Of the banks that cash payroll or business checks that
are drawn on another bank for non-customers, more than 90 percent charge a fee.
ES Figure 2.
If an individual does not have an account relationship with the bank, will the bank typically
cash the following types of checks, and is a fee charged?
Business Checks Drawn on the Bank
13%
Personal Checks Drawn on the Bank
12%
96%
96%
58%
58%
Government Checks
32%
Payroll Checks
87%
23%
Business Checks not Drawn on the Bank
92%
6%
Personal Checks Not Drawn on the Bank
94%
2%
Double Endorsed Checks
0%
40%
20%
If Cashes, Charges a Fee
40%
60%
80%
100%
Will Cash for a Non-Customer
ii. Identification for Check Cashing
9
Study Summary
For check cashing, banks rely primarily on government-issued forms of identification, such as
drivers’ licenses and passports. Non-government identification is accepted less often, and noncustomers are commonly required to present a secondary form of identification.
The most commonly accepted form of primary identification for check cashing is a driver’s
license, with 99 percent of banks accepting licenses, followed by passports, state identification,
and military identification. An Individual Tax Identification Number (ITIN) is the least
commonly accepted form of identification; 83 percent of banks will not accept an ITIN as
identification to cash a check.
Housing leases and Matrícula Consular cards are accepted by less than 43 percent of banks as a
secondary form of identification.
ES Figure 3.
What forms of consumer identification or validation does the bank rely on for individuals
who do not have an account relationship to cash a check?
Identification Forms
Driver’s license
State-issued photo ID
Social Security number
Passport (US. or foreign)
Employer letters/pay stub
Military ID
Student/school ID card
Matrícula Consular
Housing lease
Other:
Utility bills/payments
Individual Taxpayer
Identification Number (ITIN)
Primary:
Sufficient
alone by
itself
Secondary:
Insufficient alone but
acceptable with
another secondary ID
Not Accepted
as ID for
check cashing
91.1%
85.3%
82.3%
76.3%
23.0%
31.5%
23.3%
3.0%
1.7%
0.5%
2.1%
8.3%
13.1%
14.2%
20.2%
50.6%
40.5%
19.4%
42.4%
30.2%
28.4%
23.3%
0.6%
1.5%
3.4%
3.5%
26.4%
27.9%
57.4%
54.5%
68.0%
71.0%
74.6%
0.9%
16.0%
83.2%
iii. Products
Besides check cashing services, banks offer a limited number of products to non-customers, often
charging them higher fees than customers. Products that are least often offered to non-customers
are those that allow funds to be transferred internationally, specifically foreign currency exchange,
international remittances, and automated clearinghouse (ACH) transfers. Not offering these kinds of
products could make it more difficult for unbanked and/or underbanked individuals, many of
whom are immigrants, to send money to family and friends in different countries.
Only 37 percent of banks offer bank checks and money orders for non-customers.
Banks generally do not offer international remittances to non-customers. Only 6 percent of
banks report that they offer international remittance services to non-customers.
Thirty-two percent of banks are concerned about offering remittances to non-customers due to
regulatory considerations.
10
Study Summary
Teller training seems to be a simple and effective strategy for reaching out to unbanked and/or
underbanked consumers. Sixty-nine percent of banks provide teller and customer service training
that includes strategies for reaching out to unbanked and/or underbanked consumers.
C. Account Opening & Onboarding Process (Chapter 7)
Survey information indicates that unbanked populations face significant barriers when they try to
open mainstream bank accounts. As with check cashing, banks generally require government-issued
identification, and they also screen potential customers using ChexSystems or other risk
management screening tools. Few banks offer products or are willing to open accounts for
individuals who have a past of mismanaging accounts.
Ninety-six percent of banks use Office of Foreign Asset Control (OFAC) lists for new account
screening and risk management.
Eighty-seven percent of banks require a third-party screen before they will open checking
accounts, and 81 percent of banks require third-party screens to open savings accounts.
— The ChexSystems/Qualifile service is used by 77 percent of banks.
At nearly half (49 percent) of banks, branch managers are required to decide whether
to override an account application when an applicant screening returns a negative hit.
Twenty-five percent of banks will reject the account application automatically if there is
negative information in the ChexSystems records.
Based on the survey results, the top reasons that banks decline new account
applications are negative screening information for a prior account (62 percent),
insufficient identification information (39 percent) and a low credit score/rating (37
percent).
— A considerable obstacle for unbanked individuals who want to open an account appears to
be negative information in ChexSystems or another screening database. (Most individuals
appear in the ChexSystems database because of prior account mismanagement rather than
attempted check fraud).
Credit bureau reports are used by 33 percent of banks for new customer deposit account
opening.
Only one-quarter (25 percent) of all banks have at least one entry-level deposit account
designed for individuals ineligible for conventional accounts.
The greatest challenges banks face in serving unbanked and/or underbanked individuals are
profitability issues and perceived regulatory barriers, closely followed by fraud.
11
Study Summary
D. Case Study Highlights: Obstacles and Access
Unbanked and/or underbanked individuals often face obstacles that deter them from developing
banking relationships with financial institutions. The case studies below highlight a number of
successful ways that banks address the challenges of serving unbanked and/or underbanked
individuals, including recognizing changes in customer demographics and addressing these changes
in their business practices, offering banking services in a more casual setting or a more convenient
location, providing easier access to bank products, and enlisting bank employees to play a role in
welcoming unbanked individuals.
Institution
Target Population
Initiative
Bangor Savings Bank
(Bangor, ME)
Low- to moderate-income
individuals in primarily rural
areas
Mitigates geographic barriers and improves accessibility of
banking services by offering extended service hours,
account access via Web and telephone, and full refunds on
surcharges incurred when using any bank’s ATM
Citizens Union Bank of
Shelbyville
(Shelbyville, KY)
Hispanic community in
Kentucky MSAs
Opened Hispanic-focused branch, Nuestro Banco, which
accommodates customers by employing bilingual staff,
operating during non-traditional hours, and adopting a
more casual and culturally-sensitive environment
Ridgewood Savings Bank
(Ridgewood, NY)
Diverse immigrant and retiree
populations in Queens and
Bronx boroughs of New York
City
Hires bilingual staff, publishes bilingual marketing
materials, and advertises in local ethnic newspapers
according to demographics of each branch’s market area;
provides full range of banking services in mobile branch
that regularly visits elderly communities and other
locations with limited access to branches
Second Federal Savings
(Chicago, IL)
Mexican immigrant and
Mexican-American population
in Chicago’s South Side
Helps undocumented individuals obtain identification
required to open accounts by sponsoring visits by the
Mexican Consulate to issue Matrícula Consular cards at the
bank and by becoming an Individual Taxpayer
Identification Number (ITIN) acceptance agent
Common Lessons Learned
Banks must recognize changes in customer demographics. They must also assess obstacles in their market area and
address them accordingly.
Offering banking services in a less formal setting or more convenient location can help the unbanked and
underbanked feel more comfortable with financial institutions.
Providing greater and more varied means of access (e.g. extended hours, web/phone access) also encourages
unbanked and underbanked individuals to become customers.
Bank employees play an important role in welcoming unbanked customers and making them feel at ease by
assuaging misperceptions about banks, showing sensitivity to their needs, and communicating in their native
languages.
12
Study Summary
III.Banks’ Efforts to Provide Products and
Services
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
•
•
Retail Branch Information
•
Account Opening &
Onboarding
Services Provided to NonCustomers
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other low
cost accounts, products and
services used by the
un/underbanked.
• Deposit Products
• Savings Accounts
• Payment Products
• Credit Products
Objective 3: Identify innovative efforts depository institutions use to serve unbanked and/or underbanked
customers, including small dollar loans, basic banking accounts, remittances, and other low cost accounts, products, and
services used by these groups (Products and Services; Chapters 8-11)
Successful efforts to bring unbanked and/or underbanked individuals into the mainstream banking
system include accounts and products that are carefully developed to address the needs of these
individuals. Chapters 8 through 11 of the survey examine bank policies and products offered for
deposit, savings, payment, and credit products and services, and particularly innovative products and
services that unbanked and/or underbanked customers can understand and manage to avoid fees
and account closures.
Survey results show that while most banks offer basic deposit, savings, and transaction accounts to
qualified customers, significant opportunities exist for banks to expand their products and services
to unbanked and/or underbanked individuals. For example, few banks offer entry-level transaction
accounts designed to help build credit, “second chance” accounts designed to retain and attract
customers who may have blemished credit, workplace-based programs, individual development
accounts (IDAs), Internal Revenue Service (IRS) Voluntary Income Tax Assistance (VITA)
programs, rapid access to deposited funds, and affordable small dollar loans.
13
Study Summary
A. Deposit Products (Chapter 8)
Deposit accounts are the foundation on which banks offer other products and services to unbanked
and/or underbanked individuals. With a simple checking account, previously unbanked consumers
are able to make payments more easily and cash checks more affordably. Deposit accounts help
individuals become familiar with additional banking products and services. Low fees and low to no
minimum balance requirements, along with appropriate education, can help attract and sustain
unbanked and/or underbanked individuals as customers.
Nearly two-thirds (62 percent) of banks do not require a minimum balance for their most basic
checking account. An additional 8 percent of banks will waive the minimum balance if
customers use direct deposit.
— The median (and mode) minimum balance for accounts with direct deposit is $100.00,
which is the same for accounts that do not have direct deposit, for all banks.
Ninety percent of banks offer free check writing for their most basic transaction account.
— Online bill payment is the most common bank product with a fee (22 percent); however,
the majority of banks (65 percent) include online bill payment at no cost on their most
basic checking account.
When a fee is charged, it typically is under $5.00 per month and about $0.35 per
transaction (median).
Fourteen percent of banks do not offer online bill payment.
Virtually all banks (99 percent) charge NSF fees on their most basic transaction account. Only five
banks responded that they do not charge an NSF fee.
NSF fees range from $8.00 to $38.00, with a median of $25.00. The lowest fees are found at
banks in Tier 3.
59 percent of banks that charge insufficient funds (NSF) fees will waive the fee under certain
circumstances.
B. Savings Accounts (Chapter 9)
Most banks offer basic savings accounts but do not offer savings account products, such as IDAs
and IRS VITA occasion-based accounts, that specifically target unbanked and/or underbanked
individuals. Banks attempt to promote savings products at schools to reach potential customers at a
young age but often face difficulty in targeting unbanked and/or underbanked consumers.
The majority of banks offer basic savings accounts (97 percent) and money market deposit
accounts (MMA) (70 percent). A much smaller percentage (8 percent) offer IDAs.
The average interest rate for a savings account is 0.80 percent; for an MMA, the average interest
rate is 1.07 percent.
14
Study Summary
Less than one-quarter (22 percent) of banks partner with other organizations to promote the use of
saving account products. However, these banks indicate that partnering provides a number of
benefits. Some banks partner with schools to build relationships with potential customers at a young
age, while others try to bring in more business by partnering with local businesses and making
presentations to employees. By partnering with a trusted source, such as an employer, banks work to
improve their accessibility among unbanked and/or underbanked employees.
Of the 194 banks that reported partnering with organizations to promote savings products, 176
described the organizations with which they partner. Of these, two-thirds partner with
educational institutions, ranging from elementary schools to colleges. They report using a
number of programs, including the American Bankers Association’s Teach Children to Save
Day, Junior Achievement, Saving Makes Cents, FDIC Money Smart, and Bank at School
programs.
The second most common type of partner reported in the sample was local employers.
C. Payment Products (Chapter 10)
An important issue for unbanked and/or underbanked individuals is the speed at which they can
access their deposited funds. Although funds availability policies are more favorable for established
customers, banks generally do not make funds available immediately for checks that are not drawn
on their own institution. This reduces the attractiveness of bank deposit products to unbanked
and/or underbanked individuals since they can obtain immediate access to their funds at alternative
financial institutions, such as check cashers and payday lenders.
Banks tend to provide funds the most quickly for “on-us” checks, or checks drawn on the bank
itself. Sixty-three percent of banks have same-day availability for on-us business checks
deposited by established customers, and another 36 percent have next-day availability.
Checks drawn on other local (in-state) banks tend to have next-business-day availability for
established customers. For example, only 32 percent have same-business-day availability for instate payroll checks, while 50 percent of banks have next-day availability and about 17 percent
have second-day availability.
ES Figure 4.
How soon are funds ordinarily available for an established customer who presents the
following items?
Personal Check Drawn on the Bank
64%
36%
1%
Business Check Drawn on the Bank
63%
36%
1%
Government Check
Payroll Check
1%1%
48%
50%
50%
32%
17% 2%
Business Check Not Drawn on the Bank
28%
48%
21% 3%
Personal Check Not Drawn on the Bank
27%
47%
21% 5%
Double Endorsed Check
24%
0%
Current Day
20%
Next Day
35%
40%
Second Day
15
8%
60%
33%
80%
100%
Three or More Days
Study Summary
D. Credit Products (Chapter 11)
Banks offer several types of credit products that are targeted to unbanked and/or underbanked
individuals, such as tax refund anticipation loans, secured credit cards, and advances on funds that
are due to arrive, though these offerings are limited.
Nearly all (97 percent) banks can originate an unsecured personal loan in less than 48 hours.
— Eighty percent of banks are able to originate an unsecured loan in less than 24 hours, and
more than 24 percent can do so in less than 30 minutes.
Sixty-nine percent of banks offer closed-end unsecured personal loans for amounts up to
$5,000.
Thirty-six percent of banks offer consumer credit cards issued by the bank or a third party.
— Among banks that offer credit cards, only 25 percent offer secured credit cards to
customers who do not qualify for a traditional credit card.
— Of the banks that offer a secured credit card, more than 96 percent allow cardholders to
“graduate” to a traditional credit card.
Less than 6 percent of banks provide an advance on funds that are due to arrive by direct
deposit or check.
Relatively few banks offer tax refund anticipation loans.
16
Study Summary
E. Case Studies Highlights: Products
Banks offer targeted products to unbanked and underbanked customers as a way to transition them
into the economic mainstream, particularly when individuals do not qualify for standard accounts.
The case studies below highlight some of the ways that banks successfully attract and serve
unbanked and/or underbanked customers with targeted, innovative entry-level accounts and
“stepping stone” services. These products help to establish banking relationships and are often
accompanied by a focus on education and encouragement of sound financial management practices.
Institution
Artisans’ Bank
(Wilmington, DE)
Bancorp South
(Tupelo, MS)
Carver State Bank
(Savannah, GA)
Target Population
Products
Credit Builder Program provides a 12-month loan while
customers place proceeds in deposit account held as
collateral and replay loan from cash flow.
Low- to moderate-income
individuals in their area with
poor credit history or past
experience with financial
mismanagement
Delawareans Save IDA helps customers set and achieve
monthly savings goals over three-year period and
provide up to a 3:1 match if savings targets are met.
Second Chance Checking restricts access (check writing
and debit cards) for customers ineligible for standard
checking product.
African-American and
Hispanic-American
communities of urban and
rural markets in the South
Smart Saver IDA combines a mortgage and a savings
product with eight hours of financial education to
provide resources toward purchase of home.
Small Business IDA provides 4:1 match to local
entrepreneurs and requires applicants to take classes and
develop business plan to qualify.
Multi-cultural community in
Savannah, including African
Americans, Hispanics,
Iranians, and Chinese
Credit Rebuilder Loan pairs loan of $1,000 to $10,000
with CD; approval based on debt to income ratio rather
than credit history.
Central Bank
of Kansas City
(Kansas City, MO)
Diverse immigrant and
minority population, including
African Americans,
Vietnamese, Sudanese, and
Mexicans
Payroll Cards allow low- to moderate-income employees
to receive income without needing to cash checks or
access to direct deposit while preventing them from
overdrawing on account and incurring NSF or merchant
fees.
KeyBank
(Cleveland, OH)
Low- to moderate-income
populations, including African
Americans, Hispanic
Americans, working poor, and
urban residents
Low-cost (1.5% up to $22.50) check cashing services for
non-depository clients bring unbanked into branches
and create opportunities to transition them to deposit
accounts; biometric technology verifies customer
identity, lowering cost and increasing efficiency.
Common Lessons Learned
Entry-level products provide valuable opportunities for unbanked individuals to re-establish credit-worthiness and
re-enter the economic mainstream while increasing control and reducing risk to banks.
Rather than closing accounts due to mismanagement, second chance accounts help banks retain existing customers.
Certain banking products can be advantageous to unbanked individuals and can provide more benefits than those
offered by alternative service providers.
Banks can better serve unbanked and underbanked consumers by developing debit card-based accounts and
prepaid cards to meet their needs.
17
Study Summary
Terms & Definitions
Term
Definition
Bank
An FDIC-insured financial institution (bank or thrift)
Bank Footprint
Census tracts in the bank’s current CRA evaluation area
BSA/AML
The Bank Secrecy Act of 1970 requires U.S. financial institutions to
assist U.S. government agencies to detect and prevent money
laundering. Specifically, the Act requires financial institutions to keep
records of cash purchases of negotiable instruments of $3,000 or
more and to report suspicious activity that might signify money
laundering, tax evasion, or other criminal activities. The BSA is
sometimes referred to as “anti-money laundering” law (AML) or
jointly as “BSA/AML.” Several anti-money laundering acts, including
provisions in Title III of the USA Patriot Act, have been enacted to
amend the BSA..
Conventional Checking
Account
Checking, NOW, DDA, MMDA
Debit Card
Card linked to a transaction account
Earned Income Tax
Credit (EITC)
A refundable federal income tax credit for low-income working
individuals and families. To qualify, taxpayers must meet certain
requirements and file a tax return.
Established Customer
An individual who has had a deposit account for more than 30 days
Full-Service (Brick and
Mortar) Offices
SOD office service type code 11 (not reported in the Branch Office
Survey (OTS-supervised institutions); see
fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Full-Service Retail (In
store) Offices
SOD office service type code 12 (not reported in the Branch Office
Survey (OTS-supervised institutions); see
fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Individual Development
Account (IDA)
Matched savings accounts that enable low-income individuals to save,
build assets, and enter the financial mainstream. IDAs reward
monthly savings of individuals who are building toward purchasing an
asset (most commonly their first home), paying for post-secondary
education, or starting a small business.
18
Study Summary
Individual Taxpayer
Identification Number
(ITIN)
A tax processing number issued by the Internal Revenue Service to
individuals who are required to have a U.S. taxpayer identification
number but who do not have and are not eligible to obtain a Social
Security Number (SSN) from the Social Security Administration
(SSA). ITINs are issued regardless of immigration status because both
resident and nonresident aliens may have U.S. tax return and payment
responsibilities under the Internal Revenue Code.
Limited Service Offices
SOD office service type codes 22, 23, and 29 (not reported in the
Branch Office Survey (OTS-supervised institutions); see
fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Low and Moderate
Income (LMI)
Low income: Income equal to or less than 50 percent of the median
income of the local metropolitan area (MSA) or appropriately defined
rural area
Moderate income: Income from 50 percent to 80 percent of the
median income of the local metropolitan area (MSA) or appropriately
defined rural area
Matrícula Consular
A photo identification card issued to Mexican citizens by the Mexican
Government to prove that the bearer is of Mexican nationality and is
living outside of Mexico. Local offices of the Consulate General of
Mexico facilitate this service in the United States.
Non-Customer
An individual who does not have a deposit account or credit
relationship with your bank
Number of Deposit
Branches
As of June 30, 2007, as reported in the Summary of Deposits (SOD)
submitted to the FDIC or in the Branch Office Survey (reported to
the OTS by OTS-supervised institutions)
OFAC List
The Office of Foreign Asset Control (OFAC), part of the U.S.
Department of the Treasury, administers and enforces economic and
trade sanctions based on U.S. foreign policy and national security
goals against targeted foreign states, organizations, and individuals.
OFAC manages and maintains lists of individuals and organizations
that U.S. individuals and business are prohibited from doing business
with and from whom they should not accept funds.
Other offices reported
on the Summary of
Deposits
SOD office service type codes 13, 21, and 30 (not reported in the
Branch Office Survey (OTS-supervised institutions); see
fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Patriot Act
The Patriot Act was signed into law on October 25, 2001. Title III of
the Act requires banks to establish a Customer Identification
Program.
19
Study Summary
Prepaid Debit Card
Not linked to a transaction account. Money can be loaded onto the
card and payments made through networks like Visa, MasterCard.
Excludes closed-loop retailer gift cards
Savings Account
Statement savings, Passbook, Certificates of Deposit, etc.
SOD
Summary of Deposits reports
Unbanked
Individuals or families who do not have an account with a depository
institution (a commercial bank, savings institution or credit union) or
a transaction account with a money market mutual fund or brokerage
firm
Underbanked
Individuals or families who have a deposit account but also rely on
alternative non-bank financial service providers (such as check
cashing firms or payday lenders) for transaction or credit services
Volunteer Income Tax
Assistance Program
(VITA)
Offers free tax help to low- to moderate-income individuals who
cannot prepare their own tax returns. Certified volunteers sponsored
by various organizations receive training to help prepare basic tax
returns in communities across the country.
20
Study Summary
Chapter
2
Study Objectives and Methodology
Study Objectives
The purpose of this study was to conduct a nationwide survey of FDIC-insured depository
institutions to assess their efforts to serve unbanked and underbanked individuals and families.
Section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005
(“Reform Act”) (Pub. L. 109-173) requires the FDIC to conduct ongoing surveys “on efforts by
insured depository institutions to bring those 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.”
The Reform Act further requires that the FDIC consider the following factors in conducting the
survey: (1) the extent to which insured depository institutions promote financial education and
financial literacy outreach; (2) the financial education efforts that appear to be the most effective in
bringing unbanked individuals and families into the conventional finance system; (3) the efforts of
insured institutions to convert unbanked money order, wire transfer, and international remittance
customers into conventional account holders; (4) the cultural, language and identification issues as
well as transactions costs that appear to most prevent unbanked individuals from establishing
accounts; and (5) an estimate of the size and worth of the unbanked market in the United States.5
The FDIC retained Dove Consulting in 2007 to design and administer its initial survey effort related
to the ongoing statutory requirement. The FDIC identified three broad objectives to address the
specific requirements of the statutory mandate:
Identify and quantify the extent to which insured depositories outreach, serve, and meet the
banking needs of the unbanked and underbanked.
Identify challenges affecting the ability of insured depository institutions to serve the unbanked
and underbanked, including but not limited to cultural, language, identification issues, and
spatial/location issues.
Identify innovative efforts depositories use to serve the unbanked and underbanked, including
community storefronts, small dollar loans, basic banking accounts, remittances, and other lowcost checking accounts, products and services used by the unbanked and underbanked.
5 To address this last question, the FDIC is exploring the feasibility of conducting, along with the U.S. Bureau of the Census, the first national
household survey to collect data on the numbers and demographic characteristics of unbanked and underbanked households, as well as the barriers
they perceive when deciding how and where to conduct financial transactions.
21
Study Objectives and Methodology
Survey Design
The survey effort designed by Dove Consulting consisted of a mail-in survey questionnaire
administered to a sample of FDIC-insured institutions and a limited number of detailed case studies
of surveyed banks identified as employing innovative ways of serving unbanked and/or
underbanked consumers. The survey instrument included questions that focused on banks' financial
education and outreach strategies; deposit, payment, and credit products offered to entry-level
consumers; and other related topics (the survey instrument is included in Appendix A). The survey
instrument was also designed to identify challenges insured institutions may face serving unbanked
and underbanked customers.
A draft survey instrument was developed by Dove Consulting with input from the FDIC. Dove
Consulting formally pilot-tested the survey instrument with nine FDIC-insured institutions in late
2007 to gather feedback about the questions and the process for gathering the data. The
questionnaire was revised as necessary based on feedback from the pilot test. It was submitted by
the FDIC to the Office of Management and Budget (OMB) on January 4, 2008, for approval under
the Paperwork Reduction Act. The survey instrument was subsequently revised to address
comments received during the OMB public comment period, and approval to administer the survey
was granted to the FDIC by OMB on March 28, 2008 (OMB Form # 3064-0158).
Prior to survey administration, extensive efforts were made by the FDIC to build awareness of the
study effort among the industry, to encourage banks to participate in the study, and to explain the
value of participating in the research effort to their organization’s staff. These efforts included
communications with industry groups and publication of the study objectives and design on the
FDIC website.
Guaranteeing the confidentiality of individual bank survey responses from the public and bank
regulators was important to the banks as well as the FDIC. Under the terms of the FDIC’s contract
with Dove Consulting, no individual survey responses were returned to the FDIC or other bank
agencies. The FDIC and other bank regulators therefore do not have access to individual survey
responses and are not able to link any responses to individual banks. Dove Consulting collected all
survey responses, certified that it had destroyed all individual bank identifying data or records, and
delivered only aggregated survey results to the FDIC.
Case Study Design
A limited number of case studies were developed to provide information about specific strategies
that some financial institutions have implemented to expand their customer base and serve
underbanked consumers. Case study banks were selected on the basis of a variety of different types
of information, including industry research and bank survey questionnaire responses. The final
selection of banks reflects a variety of strategies to serve the unbanked as well as types of FDICinsured institutions.
The banks chosen for case studies were selected in a two-stage process. The first set of potential
case study banks were identified by the FDIC based on industry research prior to survey
administration. These banks were reviewed against certain “good standing” criteria which included
regulatory ratings of 1 or 2 for compliance, Community Reinvestment Act, and composite safety and
soundness.
22
Study Objectives and Methodology
The second set of potential case study banks was identified by Dove Consulting based on Dove
Consulting’s confidential review of banks’ survey responses. Banks that revealed innovative and
successful strategies to converting unbanked and underbanked individuals into the conventional
banking mainstream in their survey responses and that met the FDIC good standing criteria were
added to the potential case study bank list.
Potential case study banks were invited to voluntarily participate as case study banks by Dove
Consulting. Dove Consulting contacted each potential bank by mail, seeking to obtain agreement to
participate from a senior manager in each targeted organization. Banks that consented to be case
study candidates were asked to complete the survey questionnaire and were interviewed at least once
by Dove Consulting. Draft case studies were submitted to participating banks for their approval and
consent.
Population, Sample Frame, and Sample Design
Population of Interest
For the purposes of this study, the population was all federally insured banks and thrifts operating in
the United States during the first quarter of the year 2007. Wholesale banks and special purpose
banks that do not operate retail branches are not relevant for this study, and were excluded from the
survey sample based on specialty charter and branch characteristics (i.e., assets per branch indicative
of a money-center bank.)
Sample Frame
The sample frame for the study was carefully considered to allow for collection of a statistically
useful number of responses so that differences among potential geographic and financial institution
size stratification schemes could be examined.
For this study, the sample frame was bank holding companies (or “unique institutions” in the FDIC
database if they do not have a bank holding company). The sample frame included FDIC-insured
financial institutions that operate retail bank offices. Screening criteria were used to determine the
sample frame of U.S. banks with retail operations. (In subsequent discussions of the sampling frame,
the sampling units are referred to as banks). Additionally, some banks were excluded from the study
due to FDIC concerns of overburdening the institutions due to other concurrent FDIC studies.
23
Study Objectives and Methodology
OM Figure 1.
Sample Frame by Number of Banks
FDIC Bank Charters
Consolidate charters at the bank
holding company (if applicable)
Unique Institutions
Remove wholesale/special
purpose banking institutions
Eligible Banks
Population to be segmented
based on asset size and
geographic region
Sample Frame
The sample frame included 7,487 banks as shown in the table below by asset-size groupings.
OM Figure 2.
Sample Frame by Number of Banks
# of Bank
Charters
# of Banks
91
25
Tier 2
Banks with $1 Billion or more in
assets outside the Top 25
1,115
564
Tier 3
Banks with less than $1 Billion in
assets
7,435
6,898
Sample Frame
8,641
7,487
9
5
Tier 1
Top 25 banks by assets
Ineligible*
Total
8,650
*Tier 1 excluded wholesale and special purpose banks.
7,492
Sample Size and Sample Allocation to Size Groups
The target number of completed questionnaires was 865, based on Dove Consulting’s goal of
achieving a balance between cost and the anticipated need for computing valid survey estimates for
banks by tiers (asset-size groups) and geographic areas (U.S. Census Bureau Divisions). This target
sample size was based on full participation from the top 25 banks (Tier 1), along with approximately
20 Tier 2 banks per Census Division and more than 60 Tier 3 banks per Census Division. The
allocation of the target number of completed questionnaires to the three asset-size strata, and the
corresponding sampling rates (percentage of banks covered), are shown in Figure 3.
24
Study Objectives and Methodology
OM Figure 3.
Sample Frame – Planned Stratum Goals and Coverage
# of Unique
Banks
Survey Goal
(Completes)
Percentage of
Banks Covered
Tier 1 (Certainty)
Top 25 banks by assets
25
25
100.0%
Tier 2 (Mid-Sized)
Banks with more than $1
billion in assets outside the
Top 25
564
180
31.9%
Tier 3 (Under $1 Billon)
Banks with less than $1
billion in assets
6,898
660
9.6%
Total
7,487
865
11.6%
Strata
Note that the sample allocation to size groups included an oversampling of larger banks. This
improved sampling efficiency because of the disproportionate influence of the largest banks on
availability of retail banking services. As shown in the above table, the target sampling rate was 100
percent for Tier 1 banks, 32 percent for Tier 2 banks, and 10 percent for Tier 3 banks.
Based on these target numbers of completed interviews and the response rate goals (100 percent for
Tier 1 and a two-thirds response rate goal for Tiers 2 and 3), a stratified random sample of 1,264
banks was selected from Tiers 2 and 3, less two that were excluded due to the burden of another
FDIC study. Including the 25 banks in the Tier 1 group, the total sample size was 1,287 banks (25 +
1,264 – 2).
Stratified Sample Design
The sample of 1,287 banks was selected as a stratified random sample from the sample frame of
7,487 banks. The primary strata were defined by the three bank size groups: top 25 (certainties, Tier
1), banks with total assets of $1 billion or more (Tier 2), and banks with less than $1 billion in assets
(Tier 3). Based on the target numbers of completed questionnaires by size groups and the response
rate goals, the 1,287 sample banks were allocated to the three size groups as follows: 25 to Tier 1,
268 to Tier 2, and 994 to Tier 3. The corresponding sampling rates were 100 percent for Tier 1, 47.5
percent for Tier 2, and 14.4 percent for Tier 3.
The next level of stratification was the nine Census Divisions. Within Tiers 2 and 3, the sample was
allocated proportionally to the nine Census Divisions. Therefore, within each tier, the selection
probability of banks across Census Divisions was constant (except for minor variations due to the
need to round off sample sizes to integers). The sample allocation to strata is shown in Figure 4.
25
Study Objectives and Methodology
OM Figure 4.
Sample Stratification by Tier and Census Division
Tier 1
Tier 2
Tier 3
New England
1
14
49
Middle Atlantic
6
39
66
South Atlantic
4
42
129
East South Central
2
16
91
West South Central
0
29
157
East North Central
8
44
202
West North Central
1
26
187
Mountain
1
17
58
Pacific
2
41
55
Total
25
268
994
The states in each of the nine Census Divisions are:
OM Figure 5.
Listing of States by Census Division
New England:
Maine, Vermont, New Hampshire, Massachusetts,
Connecticut, Rhode Island
Middle Atlantic:
New Jersey, New York, Pennsylvania
South Atlantic:
Maryland; Washington, D.C.; Delaware; West Virginia;
Virginia; North Carolina; South Carolina; Georgia; Florida
East South Central:
Kentucky, Tennessee, Alabama, Mississippi
West South Central:
Oklahoma, Arkansas, Texas, Louisiana
East North Central:
Wisconsin, Michigan, Ohio, Indiana, Illinois
West North Central:
North Dakota, South Dakota, Nebraska, Kansas,
Missouri, Iowa, Minnesota
Mountain:
Idaho, Montana, Wyoming, Colorado, Utah, Nevada,
Arizona, New Mexico
Pacific:
Washington, Oregon, California, Alaska, Hawaii, Guam
26
Study Objectives and Methodology
Data Collection
A survey package was mailed to each sample bank on April 12, 2008. The packages included a
personalized cover letter, instructions, the survey form, and a Business Reply Envelope for returning
the survey (see Appendix A for the survey form and sample invitation letter). The survey package
also included instructions about how to submit the completed questionnaires electronically. These
instructions included information on how to download the MS-Word version of the survey from the
FDIC Web site or via email.
Data collection was performed at the highest organizational level of the bank within the United
States. Specifically, the sampling unit was at the bank holding company level, as reflective of legacy
arrangements. The respondent sought was the bank officer responsible for retail bank operations.
For U.S. owned holding companies, Dove Consulting treated each of the top 25 holding companies
as a single unit and asked the bank leadership to specify contacts for the study.
It was necessary to collect multiple responses from some banks if they had different or legacy
procedures at retail banks within their bank holding company. Specifically, Dove Consulting
requested the largest banks to complete separate surveys if their policies differed by charter. For the
one bank that submitted multiple survey forms, the mean of its item responses were incorporated in
the dataset.
Extensive follow-up by telephone, email, and mail was conducted by Dove Consulting and the
FDIC to encourage strong bank participation and resolve questions. In this regard, Dove Consulting
placed over 2,000 follow-up telephone calls.
Once the survey data were collected and entered into a database, Dove Consulting examined the
data for consistency.
Survey Response
Survey collection ended on July 11, 2008. Survey response rates, the mix between paper and
electronic submission, and timing appear in Figures 6 and 7. The overall survey response rate was
53.4 percent, reflecting 685 completed surveys. After adjusting for disqualifications (frame errors),
replacements and bank consolidations/mergers, the adjusted response rate is 53.7 percent. Figure 8
breaks down the 685 responses by Tier and Division.
27
Study Objectives and Methodology
OM Figure 6.
Tier 1 (Top 25
banks)
Tier 2 (Assets
over $1 billion,
not Top 25)
Tier 3 (Assets
under $1
billion)
Total
Survey Response Rates
(A)
Sample Surveys
Frame
Sent
Size (April 12th)
25
25
(B)
Replacement
Banks
0
(C)
Sample
Size
25
(D)
(E)
(F)
Banks
Surveys Response
Disqualified Received Rate (E/A)
0
24
96.0%
(G)
Adjusted
Response
Rate
(E/(C-D))
96.0%
564
268
0
268
6
159
59.3%
60.7%
6,898
990
4
994
5
502
50.6%
50.8%
7,487
1,283
4
1,287
11
685
53.4%
53.7%
For the 685 bank responses, 422 came in by paper (including faxes) and 263 were received by email.
The mix and number of daily incoming surveys of responses are shown below:
OM Figure 7.
Survey Response Mix and Timing
Incoming Surveys
Number of Surveys per Day
60
50
40
Paper Surveys
Electronic Surveys
30
Total
20
10
0
4/22 4/28 5/2 5/8 5/14 5/20 5/27 6/2 6/6 6/12 6/18 6/24 6/28 7/7 7/11
Date
28
Study Objectives and Methodology
OM Figure 8.
Responding Banks by Tier and Region
Region
Total
Tier 1
New England
Mid-Atlantic
South Atlantic
East South
Central
West South
Central
East North
Central
West North
Central
Mountain
Pacific
Total
Count
% within Region
% within New Tier
% of Total
Count
% within Region
% within New Tier
% of Total
Count
% within Region
% within New Tier
% of Total
Count
1
2.6%
4.2%
0.1%
5
7.7%
20.8%
0.7%
4
5.0%
16.7%
0.6%
6
15.8%
3.8%
0.9%
24
36.9%
15.1%
3.5%
18
22.5%
11.3%
2.6%
Tier 3
31
81.6%
6.2%
4.5%
36
55.4%
7.2%
5.3%
58
72.5%
11.6%
8.5%
38
100.0%
5.5%
5.5%
65
100.0%
9.5%
9.5%
80
100.0%
11.7%
11.7%
2
11
47
60
% within Region
% within New Tier
% of Total
Count
3.3%
8.3%
0.3%
18.3%
6.9%
1.6%
78.3%
9.4%
6.9%
100.0%
8.8%
8.8%
0
24
80
104
% within Region
% within New Tier
% of Total
Count
0.0%
0.0%
0.0%
23.1%
15.1%
3.5%
76.9%
15.9%
11.7%
100.0%
15.2%
15.2%
8
30
88
126
% within Region
% within New Tier
% of Total
Count
6.3%
33.3%
1.2%
23.8%
18.9%
4.4%
69.8%
17.5%
12.8%
100.0%
18.4%
18.4%
1
12
100
113
% within Region
% within New Tier
% of Total
Count
% within Region
% within New Tier
% of Total
Count
% within Region
% within New Tier
% of Total
Count
% within Region
.9%
4.2%
0.1%
1
2.3%
4.2%
.1%
2
3.6%
8.3%
0.3%
24
3.5%
10.6%
7.5%
1.8%
8
18.2%
5.0%
1.2%
26
47.3%
16.4%
3.8%
159
23.2%
88.5%
19.9%
14.6%
35
79.5%
7.0%
5.1%
27
49.1%
5.4%
3.9%
502
73.3%
100.0%
16.5%
16.5%
44
100.0%
6.4%
6.4%
55
100.0%
8.0%
8.0%
685
100.0%
29
Tier 2
Study Objectives and Methodology
Derivation of Respondent Weights and Survey Estimates
For the purpose of making industry-wide estimates from the 685 completed survey questionnaires
received from banks, appropriate respondent weights were derived that were based on bank
selection probabilities and survey response rates. These weights were computed as the product of a
base weight (inverse of the selection probability) and a nonresponse adjustment factor based on the
assumption that nonrespondents were “missing at random” within asset-size groups. Survey
estimates were computed using these respondent weights. To the extent that the “missing at
random” assumption is valid, the survey estimates of population statistics are unbiased.
Following are the details of the derivation of respondent weights and survey estimates.
Base Weights
The base weight for a respondent is the reciprocal of the respondent’s selection probability. The
sample design for the survey of banks was a stratified random sample where the selection
probabilities varied across the three size groups (major strata) but were constant within a size group.
The selection probabilities for all units within a stratum were equal to the sampling rate for the
stratum. (As noted previously, although we also stratified by Census Division, the selection
probability of banks in a given stratum/tier was constant across Division, aside from minor
variations due to rounding.)
Let h denote the stratum (size group). If we select n h (the sample size for stratum h) out of the N h
(the population size for stratum h) banks in stratum h, then the selection probability for banks in
stratum h is the following:
h nh N .
h
Then, the base weight (or design weight) assigned to each respondent bank in stratum h was
computed as follows:
wh 1 h .
The base weights for the three major strata (tiers) are shown in Figure 9.
OM Figure 9.
Base Weights
Let h denote the size group (tier)
Tier 1
Tier 2
Tier 3
Selection probability h
1.000
0.475
0.144
Base weight (or design weight), wh, assigned
to the respondent banks in each tier
1.00
2.104
6.940
30
Study Objectives and Methodology
Nonresponse Weight Adjustment
The base weights were adjusted to account for the nonresponding banks. This weight adjustment
was applied within each stratum, based on the assumption that sample banks will be “missing at
random” within strata, or at least that the survey variables for a nonresponding bank will be more
like those of responding banks in the same stratum than those in other strata.
As before, nh represents the number of banks that were sampled from stratum h. The number of
those sampled banks that responded to the survey is denoted as rh . Subsequently some of the nh
sample cases were determined to be ineligible (or out of scope) for the survey. The nonresponse
weight adjustment was calculated as the ratio of the eligible number of sampled banks (both
respondents and nonrespondents), denoted n he , in the stratum to the number of banks in the
stratum that responded to the survey. Specifically, the weight adjustment due to the nonresponding
banks within stratum h, Ah(nr ) , was computed as follows:
Ah( nr )
n he
rh
.
To obtain the final weights, the base weight for stratum h, wh, was multiplied by the nonresponse
adjustment factor, Ah(nr ) . The stratum level design weight adjusted for nonresponse (the final
weight) was computed as follows:
wh* Ah( nr ) wh .
The above final weight was assigned to all banks belonging to stratum h for which survey data were
obtained.
OM Figure 10. Response Adjusted Base Weights
Let h denote the stratum (tier)
Tier 1
Tier 2
Tier 3
Base weight (or design weight)
1.00
2.104
6.940
Sample Size ( nh Banks)
25
268
994
Eligible Sample Size ( n he Banks)
25
262
(268 - 6
ineligible)
989
(994 - 5
ineligible)
Respondents ( rh banks)
24
159
502
Nonresponse weight adjustment, Ah(nr )
1.042
1.648
1.970
Final weight (Base weight x Nonresponse weight
adjustment)
1.042
3.468
13.672
31
Study Objectives and Methodology
Survey Estimates
Survey estimates of population totals or means/percentages were computed using the weights
described in the previous section. In particular, if yhi represents the response to a survey question
provided by respondent i in stratum (tier) h, the estimated population total, Yˆ , for that question
would be computed as follows:
Yˆ
3
rh
w
h 1 i 1
h
y hi .
An example of an estimated total for the survey would be the estimated number of automated teller
machines (ATMs) that banks have that are located in low- and moderate-income (LMI) Census
tracts.
However, many of the estimated totals from the survey are estimated bank counts, like the estimated
number of banks that perceive that there are unbanked or underbanked populations in their market
area. In that case, the yhi variable is a 0-1 variable, which takes on the value of 1 if the respondent
answered yes to this question, and zero otherwise. The estimate would then be the sum of the
weights of all respondents that answered yes to the question.
A survey mean per bank, Y , in the universe would be estimated as follows:
Yˆ
Yˆ
3
.
rh
w
h 1 i 1
h
The estimated mean is the estimated total (weighted responses for the survey question) divided by
the sum of the weights of all of the respondents who answered the question.
Many of the survey items are yes/no questions, such as whether the bank participates in education
or outreach efforts that could bring unbanked or underbanked individuals into the conventional
banking system. In those cases, the above formula for estimating a population mean was used to
estimate a population proportion (percent) where the y variable is a 0-1 variable. For such an
application, the estimated total was computed as the sum of the weights of all respondents that
answered yes to the question (as discussed above as an estimated count). The denominator was
computed as the sum of the weights for all respondents who answered the question. Therefore, an
estimate of the population percent who would answer yes to a specific question was calculated as the
sum of the weights of all respondents that answered yes to the question divided by the sum of the
weights of all respondents who answered the question.
The same formulas were used for estimating totals, means, and percents for population subgroups,
where the summations were taken over the subgroup respondents. For example, the proportion of
banks in the Middle Atlantic Division that use credit report scores as part of the screening process
for new checking accounts was estimated as the ratio of the sum of the weights of responding banks
in the Middle Atlantic Division that answered yes to that survey question divided by the sum of the
weights of all respondents in the Middle Atlantic Division that answered that question.
32
Study Objectives and Methodology
Reliability of the Estimates
Because estimates are based on sample data, they differ from figures that would have been obtained
from complete enumeration of the population using the same instruments. Results are subject to
both sampling and nonsampling errors. Nonsampling errors include biases due to inaccurate
reporting, processing, and measurement, as well as errors due to nonresponse. These types of errors
cannot be measured readily. However, to the extent possible, each error of this type has been
minimized through the procedures used for data collection, editing, quality control, and nonresponse
adjustment.
The sampling error of an estimate is the error that occurs solely because population estimates are
generated from only a portion (sample) of the population. These types of errors can be estimated
from the sample results. The most common measure of sampling error is the standard error of an
estimate. Generally, the size of the standard error is inversely proportional to the square root of the
number of observations in the sample. Thus, as the sample size increases, the standard error
decreases. Standard error estimates for this survey could be derived for estimates computed for the
full population or for population subgroups, assuming that respondents are random samples by
strata (i.e., that the “missing at random” assumption mentioned earlier is reasonable). These
standard error estimates could be used to test significant differences between various pairs of
subgroups. However, due to the sample size limitations, Census Division comparisons may not be
very meaningful.
Research Limitations
Due to the classification and reporting process used, readers should be careful in the inferences
drawn from segments other than bank size (tier). This is important as the region (Census Division)
and rural/urban segmentations are based on the location of the responding bank’s headquarters.
Therefore, some results might not be meaningful. For example, in analyzing the distribution of
ATMs per region, a large bank with operations that span multiple regions would have all the ATMs
mapped to the headquarters region.
33
Study Objectives and Methodology
34
Study Objectives and Methodology
Chapter
3
Participating Bank Characteristics
and Retail Bank Information
This chapter provides information about the characteristics of the banks that responded to the
survey. Key characteristics include:
Bank Assets
Deposit Branches
Consumer Accounts and Cards
ATMs Deployed
Summary
The data collected for this survey on banks’ efforts to serve the unbanked and underbanked are
representative of the U.S. banking industry in the year 2008. The survey’s stratified design and the
excellent participation by banks, specifically the largest banks from the Tier 1 (top 25) and Tier 2
(over $1 billion in assets), have permitted this study to gather an unparalleled and highly
representative dataset for analysis. Collectively, the banks that responded to the survey had over $8.3
trillion in assets (which represents approximately 70 percent of the total assets for commercial banks
in the United States) at the time that the sample was drawn in 2007. Responding banks operated
43,761 deposit branches, which represent about half of the bank offices at the time the sample was
drawn.
Figure 1.
Bank Size (Assets)
Assets (in 000s) as of June 30, 2007
Frequency
N
Valid
Missing
Mean
Median
683
2
$11,961,677.89
$209,990.00
35
Participating Bank Characteristics and Retail Bank Information
Consumer Accounts and Cards
Question I A. Please provide the following information related to consumer
accounts/cards as of December 31, 2007:
___ Number of conventional transaction accounts
(e.g., checking, DDA, NOW, MMDA)
___
Number of non-transaction savings accounts
___
Number of entry deposit accounts* designed for
individuals not qualified for conventional accounts
___
Number of debit cards issued and active
___
Number of prepaid cards issued and active
___
Number of credit cards issued and outstanding
An average bank issued 8,922 credit cards, 3,790 prepaid cards, and 16,245 debit cards at the time of
the survey. Additionally, it had 28,313 conventional transaction accounts, 17,745 savings accounts,
and 318 entry deposit accounts for individuals not qualified for conventional accounts.
QIA. Figure 1.
N
Overall: Account Statistics
Conventional
transaction
accounts
669
Valid
Missing
Weighted Mean
Median
Entry deposit
accounts for
Nonindividuals not
transaction
qualified for
savings
conventional
accounts
accounts
Debit Cards
666
668
670
Prepaid
Cards
669
Credit
Cards
669
16
19
17
15
16
16
28,313.31
17,745.32
317.59
16,245.19
3,789.74
8,922.06
4,026.00
2,224.00
.00
2,000.00
.00
.00
There is a difference between tiers for all types of consumer accounts and cards. Tier 1 banks have a
larger number of credit cards (mean of 2.58 million) than Tier 2 (mean of 4,761) and Tier 3 (mean of
478).
QIA. Figure 2.
N
Tier 1: Account Statistics
Valid
Missing
Conventional Non-transaction
transaction
savings
accounts
accounts
24
24
Entry deposit
accounts for
individuals not
qualified for
conventional
accounts
Debit Cards Prepaid Cards Credit Cards
23
23
22
23
1
1
2
3
2
Mean
5,139,718.87
2,997,061.52
22,163.86 2,679,187.36
2
1,233,532.67
2,579,975.91
Median
2,710,000.00
926,633.00
555.50 1,129,422.00
.00
137,500.00
36
Participating Bank Characteristics and Retail Bank Information
QIA. Figure 3.
N
Tier 2: Account Statistics
Conventional Non-transaction
transaction
savings
accounts
accounts
541
538
Valid
Missing
Entry deposit
accounts for
individuals not
qualified for
conventional
accounts
Debit Cards Prepaid Cards Credit Cards
541
541
541
541
10
14
10
10
10
10
Mean
77,616.02
48,159.99
2,246.53
61,806.69
859.64
4,761.20
Median
47,578.00
26,250.00
.00
31,251.00
.00
.00
Tier 3 banks issue relatively few prepaid cards and credit cards. The mean number of prepaid cards
issued is 25, and 478 for credit cards. The median and mode are 0 for both types of cards.
QIA. Figure 4.
N
Tier 3: Account Statistics
Conventional Non-transaction
transaction
savings
accounts
accounts
6699
6672
Valid
Missing
Entry deposit
accounts for
individuals not
qualified for
conventional
accounts
Debit Cards Prepaid Cards Credit Cards
6699
6727
6727
6713
164
191
164
137
137
150
Mean
6,046.27
4,593.01
87.06
3,505.61
25.00
477.52
Median
3,705.50
2,073.50
.00
1,748.50
.00
.00
There are few differences between regions for all types of consumer accounts and cards.
There are differences between urban and rural banks for the number of conventional accounts, nontransaction savings accounts, and debit cards. Urban banks have a higher mean and median than
rural banks across all accounts and cards.
QIA. Figure 5.
N
Urban: Account Statistics
Valid
Missing
Mean
Median
Conventional
transaction
accounts
3346
Entry deposit
accounts for
Nonindividuals not
transaction
qualified for
savings
conventional
accounts
accounts
3342
3345
Debit Cards
3359
Prepaid
Cards
Credit Cards
3358
3348
134
138
136
122
123
132
53,338.95
33,529.18
521.28
30,026.64
8,200.42
18,971.05
5,220.00
2,924.00
.00
2,492.00
.00
.00
37
Participating Bank Characteristics and Retail Bank Information
QIA. Figure 6.
N
Rural: Account Statistics
Valid
Missing
Conventional
transaction
accounts
3918
Entry deposit
accounts for
Nonindividuals not
transaction
qualified for
savings
conventional
accounts
accounts
3891
3918
Prepaid
Cards
Credit Cards
3932
3929
Debit Cards
3932
41
68
41
27
27
31
Mean
6,943.49
4,186.57
143.72
4,473.64
23.49
357.14
Median
3,661.00
2,092.00
.00
1,604.00
.00
.00
ATMs Deployed
Question I B. Number of ATMs operated by your bank. Please indicate
approximate numbers of ATMs by location and functionality:
Location
Number
Functionality
Number
Inside LMI tracts……
___
Basic cash dispense
only………………………
___
Outside LMI tracts….
___
Basic cash dispense and
deposit acceptance…
___
Total ATMs
___
=
Advanced functionality
with bill payment and/or
automated money order
and/or prepaid card….
___
Total ATMs
___
The average bank has a total of 20 ATMs, with about six located inside LMI tracts.
QIB. Figure 1.
N
ATM Statistics
Valid
Missing
Sum
Basic cash
dispense ATMs
670
Basic cash
dispense and
deposit
acceptance
ATMs
667
Advanced
functionality
ATMs
663
Total
ATMs
677
43
15
18
22
8
ATMS located
inside LMI
tracts
641
ATMS
located
outside LMI
tracts
642
44
21,325
27,780
59,681
27,780
1,672
85,164
Weighted Mean
5.95
8.11
14.48
8.11
.32
20.36
Weighted Median
1.00
2.00
2.00
2.00
.00
4.00
There are little differences between regions for the number of ATMs across all ATM types.
38
Participating Bank Characteristics and Retail Bank Information
There is a difference between tiers for the number of ATMs across all types of ATMs. In every case,
Tier 1 banks have deployed more ATMs than Tier 2 and Tier 3 banks. The mean total number of
ATMs for Tier 1 is 3,132, compared with 65 in Tier 2 and 6 in Tier 3.
In Tier 1, the mean number of ATMs located inside LMI tracts (777) differs from Tier 2 (16) and
Tier 3 (2).
QIB. Figure 2. Tier 1: ATM Statistics
N
ATMS located
inside LMI
tracts
24
Valid
Missing
ATMS
located
outside LMI
tracts
23
Basic cash
dispense ATMs
24
Basic cash
dispense and
deposit
acceptance
ATMs
24
Advanced
functionality
ATMs
20
Total
ATMs
24
1
2
1
1
5
1
Mean
777.26
2,292.95
945.13
2,151.70
76.32
3,131.83
Median
473.00
1,373.00
559.00
1,285.00
.00
2,095.00
Basic cash
dispense
ATMs
544
Basic cash
dispense and
deposit
acceptance
ATMs
544
Advanced
functionality
ATMs
541
Total
ATMs
551
QIB. Figure 3.
N
Tier 2: ATM Statistics
ATMS located
inside LMI
tracts
538
Valid
Missing
Mean
Median
QIB. Figure 4.
N
ATMS
located
outside LMI
tracts
538
14
14
7
7
10
0
15.66
49.73
28.89
36.82
1.40
64.77
8.00
31.00
9.00
24.00
.00
41.00
Basic cash
dispense
ATMs
6699
Basic cash
dispense and
deposit
acceptance
ATMs
6658
Advanced
functionality
ATMs
6672
Total
ATMs
6768
Tier 3: ATM Statistics
Valid
Missing
ATMS located
inside LMI
tracts
6330
ATMS
located
outside LMI
tracts
6357
533
506
164
205
191
96
Mean
2.21
3.29
3.07
2.78
.01
5.72
Median
1.00
1.00
1.00
1.00
.00
4.00
There are differences between urban and rural banks for the number of ATMs inside LMI tracts,
basic cash dispense ATMs, ATMs outside LMI tracts, basic cash dispense and deposit acceptance
ATMs, and total number of ATMs. The mean for urban banks is significantly higher for these types
of ATMs than for rural banks.
39
Participating Bank Characteristics and Retail Bank Information
There is little difference between urban and rural banks for advance functionality machines.
QIB. Figure 5.
N
Rural: ATM Statistics
ATMS
ATMS located
located
inside LMI
outside LMI
Basic cash
tracts
tracts
dispense ATMs
3641
3641
3641
Valid
Missing
Basic cash
dispense and
deposit
Advanced
acceptance
functionality
ATMs
ATMs
Total ATMs
3877
3877
3932
318
318
318
82
82
27
Mean
2.69
3.63
4.10
2.74
.07
6.75
Median
1.00
1.00
2.00
.00
.00
3.00
Basic cash
dispense
ATMs
3363
Basic cash
dispense and
deposit
acceptance
ATMs
3349
Advanced
functionality
ATMs
3355
Total ATMs
3411
QIB. Figure 6.
N
Urban: ATM Statistics
Valid
Missing
ATMS located
inside LMI
tracts
3250
ATMS
located
outside LMI
tracts
3277
230
204
117
131
125
69
Mean
9.60
26.54
12.77
23.73
.61
36.05
Median
1.00
3.00
1.00
3.00
.00
5.00
40
Participating Bank Characteristics and Retail Bank Information
Chapter
4
Education and Outreach Efforts
This chapter examines the following topics:
Banks’ perception of whether unbanked and underbanked individuals live in their market area
Financial education materials
Financial education and outreach efforts
Effectiveness of education and outreach programs
Activities to bring the unbanked and/or underbanked into the financial mainstream
Challenges in serving or targeting unbanked and/or underbanked populations
These questions address aspects of the Congressional Questions 1 and 2: banks’ efforts to promote financial education
and literacy and the effectiveness of these programs.
Summary
Banks are aware that unbanked and underbanked populations exist: An estimated 73 percent
of banks believe that there are unbanked and/or underbanked populations in their service area.
Banks efforts to provide education most often involve brochures: About two-thirds (63
percent) of banks actively offer education materials with general banking information and brochures
to the unbanked and/or underbanked populations. Among banks that do offer financial education
materials, they cover the subjects of basic banking, savings programs, and home ownership
products. Survey responses suggest that banks do not substantially differentiate education materials
between the unbanked and the underbanked; they are typically grouped together as “noncustomers” in the banks’ perspective. Most banks have not evaluated the effectiveness of their
financial education materials in establishing banking relationships with the unbanked and/or
underbanked. Of those banks that have evaluated the effectiveness of their financial education
materials in establishing banking relationships with the unbanked and/or underbanked, most
indicate that the materials are effective.
Financial Education and Outreach: In addition to educational materials, over half (53 percent) of
banks teach financial literacy and education sessions that target the unbanked and/or underbanked.
These banks, on average, have taught sessions for six years. Similar to education materials, the most
common sessions include topics on basic banking and home ownership. The majority of banks (63
percent) do not participate in education or outreach with other organizations that could bring
unbanked and/or underbanked individuals into the conventional banking system. Of the 58 percent
of banks that conduct off-premise financial education outreach, the most common places to visit are
41
Education and Outreach Efforts
high schools and community-based organizations; 78 percent of these banks visit high schools and
53 percent visit community-based organizations.
Other than basic materials and education sessions and outreach, banks’ efforts to educate and reach
out to unbanked and/or underbanked individuals are limited.
While 17.5 percent of banks identify expanding services as a priority in the bank’s business
strategy, 70.4 percent have not identified this as a priority.
About a quarter of banks use targeted marketing to reach the unbanked and/or underbanked
individuals, and a higher percentage of banks in Tier 1 and 2 use targeted marketing than banks
in Tier 3 (67 percent, 52 percent, and 23 percent, respectively).
About a third of banks work with corporate or business customers to provide services for
un/underbanked employees. However, only 14 percent of banks that work with corporate or
business customers offer payroll cards.
Less than a quarter of banks have conducted research on unbanked and/or underbanked
consumers in their CRA area.
Less than one-fifth of banks undertake other efforts to encourage unbanked and/or
underbanked individuals to open an account.
Activities to bring the unbanked and/or underbanked banked into the financial
mainstream: Survey respondents provided over 1,000 comments about various types of activities
that could be effective in bringing unbanked individuals into the mainstream banking system. The
main categories of activities cited are: outreach efforts, products and services, educational programs
and materials, targeted marketing, mitigation of challenges and external barriers, distribution
channels, and internal activities and initiatives.
Challenges in serving or targeting unbanked and/or underbanked populations: The greatest
challenges in serving the un/underbanked individuals are profitability issues and regulatory barriers,
which are closely followed by fraud concerns, high cost of customer acquisition, and competition
from alternative service providers. Lower ranking, but still important issues, are unfamiliarity with
the population, internal challenges, and “other” considerations.
Approximately 40 percent of banks perceive that there are regulatory impediments to providing
products and services for the un/underbanked.
42
Education and Outreach Efforts
Banks’ Perception of Whether Unbanked and
Underbanked Individuals Live in Their Market
Area
Overall, an estimated 72.8 percent of banks perceive that there are unbanked or underbanked
populations in their market area.
Question II A. Does your bank perceive that there are unbanked and
underbanked populations in your area?
Yes
No
Don’t Know
QIIA. Figure 1. Does your bank perceive that there are unbanked and underbanked populations in your
area?
Percent ‘Yes’
Weighted Frequency
72.8%
5261
Tier 1
100%
25
Tier 2
90.2%
478
Tier 3
71.3%
4758
Urban
76.3%
2601
Rural
69.7%
2660
New England
78.7%
350
Mid-Atlantic
64.5%
372
South Atlantic
75.3%
617
East South Central
70.9%
474
West South Central
76.4%
862
East North Central
73.3%
939
West North Central
66.0%
901
Mountain
85.8%
435
Pacific
71.7%
311
Overall
In contrast, 16.5 percent of banks do not perceive any unbanked or underbanked populations in
their area. The remaining 10.7 percent do not know.
QIIA. Figure 2
Valid
Does your bank perceive that there are unbanked and underbanked populations in your
area?
No
Yes
Don't Know
Total
Missing
Total
System
Frequency
91
Weighted
Frequency
1193
Weighted
Percent
16.5
510
5261
72.8
64
773
10.7
665
7228
100.0
20
212
685
7440
43
Education and Outreach Efforts
There were few differences among regions in banks’ perceptions of an un/underbanked population
in their market area.
All Tier 1 banks perceive that there are un/underbanked populations in their market areas. In
comparison, 90.2 percent of Tier 2 banks and 71.3 percent of Tier 3 banks perceive that there are
un/underbanked populations in their market area. However, there were few differences between
tiers in banks’ perceptions of an un/underbanked population.
There were few differences between urban and rural banks in banks’ perceptions of an
un/underbanked population in their market area.
Financial Education Materials
The majority of banks provide educational materials for the unbanked and underbanked. Similarities
in responses to the open-ended question (IIB-1) on the types of materials offered indicate that
banks provide the same materials for unbanked consumers as they provide to underbanked
consumers. The percentage of banks that provide basic banking educational materials to the
unbanked (39.3 percent) is about the same as the percentage that provide these materials to the
underbanked (38.4 percent). Savings (33.7 percent) and home ownership (31.3 percent) educational
materials are the next most common type of materials provided to the unbanked. Materials on credit
counseling and predatory and abusive lending are offered by less than 16 percent of banks.
QIIA. Figure 3. Percentage of Banks Providing Types of Educational Materials
Materials Provided
For Unbanked
For Underbanked
Basic Banking
39.3%
38.4%
Savings Programs
33.7%
33.6%
Home Ownership/Mortgage Products
31.3%
32.7%
Credit Counseling
13.0%
15.4%
Predatory and Abusive Lending
11.8%
13.9%
Other
7.3%
8.2%
Question II B. Does your bank provide financial education materials (i.e.,
brochures, content on a website, etc.) aimed at the unbanked and/or
underbanked on the following topics? Mark all that apply.
Financial Education Materials
For Unbanked
For Underbanked
Basic Banking (Deposit and Credit Products)
Predatory /Abusive Lending Prevention
Savings Programs
Home Ownership/Mortgage Products
Credit Counseling
Other (Explain)
Bank does not provide financial educational materials for
This population (Skip to II.B.3 below)
44
Education and Outreach Efforts
Overall, 39.3 percent of banks provide basic banking materials for the unbanked, and 38.4 percent
provide them for the underbanked.
QIIB. Figure 1. Basic Banking Unbanked
Valid
QIIB. Figure 2. Basic Banking Underbanked
Frequency
386
Weighted
Frequency
4513
Yes
299
2927
39.3
Total
685
7440
100.0
No
Weighted
Percent
60.7
Valid
Frequency
387
Weighted
Frequency
4580
Yes
298
2860
38.4
Total
685
7440
100.0
No
Weighted
Percent
61.6
There were few differences among regions for basic banking materials provided by banks to the
unbanked and underbanked.
There is a difference between tiers for basic banking materials for both the unbanked and
underbanked. For the unbanked, there are differences between Tier 1 (83.3 percent), Tier 2 (56.0
percent), and Tier 3 (37.8 percent). Similarly for the underbanked, all three tiers were different.
Among Tier 1 banks, 87.5 percent provide materials, compared with 58.5 percent of Tier 2 banks
and 36.7 percent of Tier 3 banks.
Note that the numbers labeled as counts in the tables represent weighted counts.
QIIB. Figure 3. Tier
Basic Banking Education Materials
Tier 1
Count
%
Yes
Count
%
Total
Count
%
Tier 3
4
Underbanked
3
Unbanked
243
Underbanked
229
Unbanked
4266
Underbanked
4348
16.7%
12.5%
44.0%
41.5%
62.2%
63.3%
21
22
309
323
2598
2516
83.3%
87.5%
56.0%
58.5%
37.8%
36.7%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Unbanked
No
Tier 2
Also, there are few differences between urban and rural banks for basic banking materials provided
by banks to the unbanked and underbanked.
Overall, 11.8 percent of banks provide predatory lending materials for the unbanked, and 13.9
percent provide them for the underbanked.
45
Education and Outreach Efforts
QIIB. Figure 5. Predatory Underbanked
QIIB. Figure 4. Predatory Unbanked
Valid
Frequency
576
Weighted
Frequency
6562
Weighted
Percent
88.2
Yes
109
878
11.8
Total
685
7440
100.0
No
Valid
Frequency
560
Weighted
Frequency
6407
Yes
125
1033
13.9
Total
685
7440
100.0
No
Weighted
Percent
86.1
There are few differences among regions for predatory lending educational materials for both the
unbanked and underbanked populations.
There are differences between tiers for banks providing predatory lending educational materials for
both the unbanked and underbanked populations. A larger percentage of Tier 1 banks (70.8 percent)
offer predatory lending materials for the unbanked than in Tier 2 (24.5 percent) and Tier 3 (10.6
percent). For the underbanked, these percentages remain fairly consistent across each tier, with 75.0
percent, 27.7 percent, and 12.5 percent, respectively.
QIIB. Figure 6. Tier
Predatory Lending Education Materials
Tier 1
Unbanked
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
7
Underbanked
6
Unbanked
416
Underbanked
399
Unbanked
6139
Underbanked
6002
29.2%
25.0%
75.5%
72.3%
89.4%
87.5%
18
19
135
153
725
861
70.8%
75.0%
24.5%
27.7%
10.6%
12.5%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between urban and rural banks for predatory lending education materials
offered to the unbanked and underbanked. More urban banks (14.5 percent) offer predatory lending
materials to the unbanked than rural banks (9.4 percent). Also, more urban banks (16.2 percent)
offer predatory lending materials to the underbanked than rural banks (11.8 percent).
46
Education and Outreach Efforts
QIIB. Figure 7. Urban/Rural
Predatory Lending Education Materials
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Unbanked
3587
Underbanked
3491
Unbanked
2976
Underbanked
2916
90.6%
88.2%
85.5%
83.8%
373
469
505
564
9.4%
11.8%
14.5%
16.2%
3959
3959
3480
3480
100.0%
100.0%
100.0%
100.0%
Overall, 33.7 percent of banks provide savings materials for the unbanked, and 33.6 percent provide
them for the underbanked.
47
Education and Outreach Efforts
QIIB. Figure 9. Savings Underbanked
QIIB. Figure 8. Savings Unbanked
Valid
Frequency
420
Weighted
Frequency
4934
Weighted
Percent
66.3
Yes
265
2506
33.7
Total
685
7440
100.0
No
Valid
Frequency
418
Weighted
Frequency
4942
Yes
267
2497
33.6
Total
685
7440
100.0
No
Weighted
Percent
66.4
There are differences among regions for banks offering savings materials for the unbanked, but no
difference exists for the underbanked. Nearly one-half of the banks (49.1 percent) in the New
England region offer savings materials for the unbanked, compared with a quarter of banks (25.5
percent) in the Pacific and South Atlantic (24.4 percent) regions.
QIIB. Figure 10. Region
No
Count
%
Yes
MidAtlantic
368
50.9%
63.4%
Count
%
Total
New
England
227
75.6%
72.8%
60.7%
62.7%
71.5%
Mountain
301
Pacific
344
59.3%
74.5%
219
212
210
186
462
491
401
206
118
49.1%
36.6%
24.4%
27.2%
39.3%
37.3%
28.5%
40.7%
25.5%
Count
%
Savings Education Materials for Unbanked
East
West
East
West
South
South
North
North
South
Atlantic Central Central Central
Central
650
497
715
824
1009
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference for banks offering savings materials for the unbanked and underbanked
between tiers. A smaller percentage of Tier 3 banks (31.9 percent for unbanked, 31.7 percent for
underbanked) provide savings materials than in Tier 1 (79.2 percent, 87.5 percent, respectively) and
Tier 2 (54.1 percent, 54.7 percent, respectively).
QIIB. Figure 11. Tier
Savings Education Materials
Tier 1
Unbanked
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
5
Underbanked
3
Unbanked
253
Underbanked
250
Unbanked
4676
Underbanked
4689
20.8%
12.5%
45.9%
45.3%
68.1%
68.3%
20
22
298
302
2188
2174
79.2%
87.5%
54.1%
54.7%
31.9%
31.7%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is no difference between urban and rural banks for banks offering savings materials for the
unbanked and underbanked.
48
Education and Outreach Efforts
Overall, 31.3 percent of banks provide home ownership materials for the unbanked, and 32.7
percent provide them for the underbanked.
QIIB. Figure 13. Home ownership underbanked
QIIB. Figure 12. Home ownership unbanked
Valid
Frequency
432
Weighted
Frequency
5111
Weighted
Percent
68.7
Yes
253
2329
31.3
Total
685
7440
100.0
No
Valid
Frequency
421
Weighted
Frequency
5004
Yes
264
2436
32.7
Total
685
7440
100.0
No
Weighted
Percent
67.3
There are differences among regions for banks offering home ownership materials for the unbanked
and underbanked. A smaller percentage of banks in the Pacific region (15.1 percent) offer these
materials than in the New England (44.5 percent) and Mid-Atlantic regions (40.1 percent) for the
unbanked.
QIIB. Figure 14. Region
No
Count
%
Yes
Count
%
Total
Count
%
Home Ownership Education Materials for Unbanked
East
West
East
West
South
South
North
North
South
Atlantic
Central
Central
Central
Central
643
438
797
848
1067
New
England
247
MidAtlantic
348
55.5%
59.9%
74.8%
64.1%
67.7%
64.5%
198
233
217
245
380
467
44.5%
40.1%
25.2%
35.9%
32.3%
35.5%
Mountain
332
Pacific
392
75.7%
65.4%
84.9%
343
176
70
24.3%
34.6%
15.1%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Similarly for the underbanked, 20.8 percent of banks in the Pacific region offer home ownership
materials compared with 45.5 percent in New England.
QIIB. Figure 15. Region
No
Count
%
Yes
Count
%
Total
Count
%
New
England
243
Home Ownership Education Materials for Underbanked
East
West
West
MidSouth
South
South
East North
North
Central
Central
Mountain
Atlantic Atlantic Central
Central
371
629
424
834
804
998
335
Pacific
365
54.5%
63.8%
73.2%
62.1%
70.9%
61.1%
70.8%
66.1%
203
210
230
259
343
512
412
172
79.2%
96
45.5%
36.2%
26.8%
37.9%
29.1%
38.9%
29.2%
33.9%
20.8%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
49
Education and Outreach Efforts
There are differences between tiers for banks offering home ownership materials for the unbanked
and underbanked. A smaller percentage of banks in Tier 3 (29.3 percent for unbanked, 30.7 percent
for underbanked) offer home ownership materials than in Tier 2 (54.1 percent and 56.0 percent,
respectively) and in Tier 1 (83.3 percent and 87.5 percent, respectively).
QIIB. Figure 16. Tier
QIIB. Figure 17. Tier
Home Ownership Education
Materials for Unbanked
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
4
Tier 2
253
Tier 3
4854
16.7%
45.9%
70.7%
21
298
2010
83.3%
54.1%
29.3%
25
551
6863
100.0%
100.0%
100.0%
Home Ownership Education
Materials for Underbanked
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
3
Tier 2
243
Tier 3
4758
12.5%
44.0%
69.3%
22
309
2105
87.5%
56.0%
30.7%
25
551
6863
100.0%
100.0%
100.0%
There are slight differences between urban and rural banks for home ownership financial education
materials offered to the unbanked and underbanked. About one-third (33.4 percent) of urban banks
offer home ownership materials to the unbanked, compared with 29.5 percent of rural banks. For
the underbanked, 35.2 percent of urban banks offer home ownership materials, compared with 30.6
percent of rural banks.
QIIB. Figure 18. Urban/Rural
Home Ownership Education Materials
Rural HQ
Unbanked
Underbanked
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Unbanked
Underbanked
2793
2748
2318
2255
70.5%
69.4%
66.6%
64.8%
1166
1211
1162
1225
29.5%
30.6%
33.4%
35.2%
3959
3959
3480
3480
100.0%
100.0%
100.0%
100.0%
Overall, 13.0 percent of banks provide credit counseling materials for the unbanked, and 15.4
percent provide them for the underbanked.
QIIB. Figure 19. Credit Counseling Unbanked
Valid
No
Yes
Total
QIIB. Figure 20. Credit Counseling Underbanked
Frequency
567
Weighted
Frequency
6475
Weighted
Percent
87.0
118
965
13.0
100.0
685
7440
Valid
Frequency
551
Weighted
Frequency
6294
Weighted
Percent
84.6
Yes
134
1146
15.4
Total
685
7440
100.0
No
There are minimal differences among regions for banks offering credit counseling materials for the
unbanked and underbanked.
50
Education and Outreach Efforts
There are differences between tiers for banks offering credit counseling materials for the unbanked
and underbanked. A smaller percentage of banks in Tier 3 (11.6 percent for the unbanked and 14.1
percent for the underbanked) offer credit counseling materials than in Tier 2 (28.3 percent and 28.3
percent, respectively) and Tier 1 (62.5 percent and 75.0 percent, respectively).
QIIB. Figure 21. Tier
Credit Counseling Education Materials
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Unbanked Underbanked
9
6
Tier 3
Unbanked
395
Underbanked
395
Unbanked
Underbanked
6070
5893
37.5%
25.0%
71.7%
71.7%
88.4%
85.9%
16
19
156
156
793
971
62.5%
75.0%
28.3%
28.3%
11.6%
14.1%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks for credit counseling education materials
offered to the unbanked and the underbanked. A higher percentage of urban banks (16.3 percent)
offers credit counseling materials to the unbanked than among rural banks (10.0 percent). Less than
one-fifth (18.4 percent) of urban banks offer credit counseling materials to the underbanked, while
12.8 percent of rural banks do so.
QIIB. Figure 22. Urban/Rural
Credit Counseling Education Materials
No
Count
%
Yes
Count
%
Urban HQ
Unbanked
Underbanked
2913
2841
90.0%
87.2%
83.7%
81.6%
397
506
568
639
10.0%
12.8%
16.3%
18.4%
3959
3959
3480
3480
100.0%
100.0%
100.0%
100.0%
Count
%
Total
Rural HQ
Unbanked
Underbanked
3562
3453
Overall, 7.3 percent of banks offer another form of financial education materials to unbanked
individuals, and 8.2 percent offer materials to underbanked individuals.
QIIB. Figure 23. Other Unbanked
Valid
QIIB. Figure 24. Other Underbanked
Frequency
619
Weighted
Frequency
6894
Weighted
Percent
92.7
Yes
66
546
7.3
Total
685
7440
100.0
No
Valid
51
No
Frequency
612
Weighted
Frequency
6833
Weighted
Percent
91.8
Yes
73
606
8.2
Total
685
7440
100.0
Education and Outreach Efforts
Of the banks that indicate that they provide “other” financial education materials, seven banks
describe other financial education materials not listed in Question II B. Responses include: identity
theft (3), outreach programs, credit education, cash management, and the FDIC Money Smart CD.
There are minimal differences among regions for banks that offer other financial education
materials.
There are differences between tiers for banks that offer other financial education materials for the
unbanked and the underbanked. A smaller percentage of Tier 3 (6.6 percent for the unbanked, 7.4
percent for the underbanked) banks provide materials than in Tier 2 (15.7 percent and 16.4 percent,
respectively) and Tier 1 (33.3 percent and 41.7 percent, respectively).
QIIB. Figure 25. Tier
‘Other’ Financial Education Materials
Tier 1
No
Count
%
Yes
Total
Count
%
Tier 3
Unbanked
17
Underbanked
15
Unbanked
465
Underbanked
461
Unbanked
6412
Underbanked
6357
66.7%
58.3%
84.3%
83.6%
93.4%
92.6%
Count
%
Tier 2
8
10
87
90
451
506
33.3%
41.7%
15.7%
16.4%
6.6%
7.4%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks for other financial education materials offered
to the unbanked and the underbanked. A higher percentage of urban banks (9.4 percent) offer other
materials to the unbanked than rural banks (5.5 percent). A higher percentage of urban banks (10.7
percent) offer other materials to the underbanked than rural banks (5.9 percent).
QIIB. Figure 26. Urban/Rural
“Other” Financial Education Materials
Rural HQ
Unbanked
Underbanked
No
Count
3740
3727
3153
3107
94.5%
94.1%
90.6%
89.3%
219
233
327
374
%
5.5%
5.9%
9.4%
10.7%
Count
3959
3959
3480
3480
100.0%
100.0%
100.0%
100.0%
%
Yes
Total
Urban HQ
Unbanked
Underbanked
Count
%
Overall, 36.5 percent of banks do not offer financial education materials to the unbanked, and 36.6
percent do not offer them to the underbanked.
52
Education and Outreach Efforts
QIIB. Figure 27. None Unbanked
Valid
QIIB. Figure 28. None Underbanked
Frequency
457
Weighted
Frequency
4723
Weighted
Percent
63.5
Yes
228
2717
36.5
Total
685
7440
100.0
No
Valid
Frequency
458
Weighted
Frequency
4716
Yes
227
2724
36.6
Total
685
7440
100.0
No
Weighted
Percent
63.4
There are differences between regions for banks that do not offer any educational materials for the
unbanked and the underbanked. A larger percentage of Pacific (50.5 percent), South Atlantic (45.4
percent), and Mountain (40.5 percent) banks do not offer any materials to the unbanked than New
England banks (24.5 percent).
QIIB. Figure 29. Region
No
Count
%
Yes
Count
%
Total
Count
%
New
England
336
MidAtlantic
405
75.5%
69.8%
No Financial Education Materials for Unbanked
East
West
East
West
South
South
South
North
North
Central
Central
Central
Central
Atlantic
470
481
801
895
805
54.6%
70.4%
68.0%
68.0%
57.1%
Mountai
n
302
Pacific
228
59.5%
49.5%
109
176
390
202
376
421
605
205
233
24.5%
30.2%
45.4%
29.6%
32.0%
32.0%
42.9%
40.5%
50.5%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
New
England
309
MidAtlantic
391
No Financial Education Materials for Underbanked
East
West
East
West
South
South
North
North
South
Atlantic Central
Central
Central
Central Mountain
487
481
804
912
791
312
Pacific
228
69.3%
67.4%
56.6%
70.4%
68.3%
69.3%
56.1%
61.5%
49.5%
137
189
373
202
373
403
619
195
233
30.7%
32.6%
43.4%
29.6%
31.7%
30.7%
43.9%
38.5%
50.5%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIIB. Figure 30. Region
No
Count
%
Yes
Count
%
Total
Count
%
There are differences between tiers for banks that do not offer any financial education materials for
the unbanked and the underbanked. A larger percentage of Tier 3 banks (37.6 percent) do not offer
any financial education materials to the unbanked than Tier 1 banks (4.2 percent).
53
Education and Outreach Efforts
QIIB. Figure 31. Tier
No Financial Education Materials
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
Unbanked
24
Underbanked
24
Unbanked
420
Underbanked
427
Unbanked
4279
Underbanked
4266
95.8%
95.8%
76.1%
77.4%
62.4%
62.2%
1
1
132
125
2584
2598
4.2%
4.2%
23.9%
22.6%
37.6%
37.8%
25
25
551
551
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are no differences between urban and rural banks for banks that do not offer any financial
education materials for the unbanked and the underbanked.
Question II B-1. Please describe the types of materials provided for:
a) Unbanked
Banks’ responses to this question indicate that banks do not discern a difference between the
unbanked and underbanked populations when providing financial education materials. Banks report
that the majority of educational materials provided to these groups are identical. Materials aimed at
these populations tend to be delivered in a passive manner in the form of brochures and pamphlets
that often require non-customers to take initiative in learning more about services and products
offered by financial institutions.
Of the 326 banks that describe the types of materials provided to the unbanked, 161 identify
distributing brochures as one of their strategies for reaching out to the unbanked population.
Among the 161 banks that offer brochures, 134 either list “brochures” with no further explanation
or identify brochures about general banking products such as checking and savings accounts. The
remaining responses specify brochures covering topics such as budgeting, credit counseling,
mortgages, or brochures written in foreign languages. Brochures are typically available in bank lobby
areas, at seminars, and in other educational settings.
Of the 326 banks that responded to Question II B-1, 97 indicate that information for the unbanked
population may be found on the bank’s website or on the internet, in general. Additionally, 74
respondents provide information in addition to a bank website with basic product information.
These include Spanish language websites, home ownership information, and links to third-party
educational materials.
Eighty-four banks report some type of home ownership information. Twenty-one of these
responses specify that they target first-time homebuyers. The remaining responses are about general
home ownership and the different types of mortgages available. This information is available in the
form of brochures, workbooks, seminars, and website tools.
The use of third-party materials as a way to reach the unbanked population is cited in 64 comments.
Forty responses refer to the FDIC’s Money Smart Program, and 13 relate to information from the
American Bankers Association (ABA).
54
Education and Outreach Efforts
Although the responses do not directly pertain to the question, 85 banks mention holding
educational seminars, workshops, or outreach programs. Topics for these programs include financial
literacy, home ownership, credit counseling, and predatory lending.
b) Underbanked:
Of the 330 banks that describe the types of materials provided to the underbanked, 270 report that
they offer the same materials for the underbanked as they do for the unbanked. Among the
remaining responses, the two most common answers are offering brochures (26 banks) and holding
seminars or workshops (22 banks).
Question IIB-2. Have the financial education materials helped to establish
banking relationships with:
a) Unbanked individuals?......
Yes…
No…….
Have not evaluated
b) Underbanked individuals?.
Yes…
No…….
Have not evaluated
Overall, financial education materials have helped establish relationships with the un/underbanked
at about 16 percent of all banks.
QIIB-2. Figure 2.
QIIB-2. Figure 1. Have the financial education
materials helped establish
relationships with the unbanked?
Valid
No
Yes
Does not
provide
materials
Have not
evaluated
Total
Missing System
Total
Weighted Weighted
Frequency Frequency Percent
20
182
2.5
129
1153
3086
41.9
273
2951
40.0
680
7371
100.0
5
68
7440
No
Yes
15.6
258
685
Valid
Have the financial education
materials helped establish
relationships with the
underbanked?
Does not
provide
materials
Have not
evaluated
Total
Missing
Total
System
Weighted Weighted
Frequency Frequency Percent
17
151
2.0
135
1177
16.0
260
3126
42.4
268
2918
39.6
680
7371
100.0
5
68
685
7440
There are minimal differences among regions for the effectiveness of the financial education
materials.
There is a difference between tiers for the effectiveness of financial education materials for the
underbanked. As 43.9 percent of Tier 3 banks that do not provide materials for the underbanked is
a lower percentage than for Tier 1 banks where all reported providing materials and 62.5 percent
believe their materials have been effective.
55
Education and Outreach Efforts
QIIB-2. Figure 3A. Tier
Effectiveness of Financial Education
Materials for the Unbanked
Tier 1
No
Count
0
31
150
5.7%
2.2%
13
156
984
50.0%
28.3%
14.5%
1
146
2939
4.2%
26.4%
43.3%
Count
%
Does not provide
materials
Count
%
Have not evaluated
Count
%
Total
9
218
2721
45.8%
39.6%
40.0%
Count
%
Tier 3
.0%
%
Yes
Tier 2
25
551
6795
100.0%
100.0%
100.0%
QIIB-2. Figure 3B. Tier
Effectiveness of Financial Education
Materials for the Underbanked
Tier 1
No
Count
%
Yes
Count
%
Does not provide
materials
Count
%
Have not evaluated
Count
%
Total
Count
%
0
Tier 2
28
Tier 3
123
.0%
5.0%
1.8%
16
163
998
62.5%
29.6%
14.7%
0
146
2980
.0%
26.4%
43.9%
9
215
2693
37.5%
39.0%
39.6%
25
551
6795
100.0%
100.0%
100.0%
There are no differences between urban and rural banks for the effectiveness of the financial
education materials.
56
Education and Outreach Efforts
Financial Education and Outreach Efforts
Question II B-3. Does your bank participate in education or outreach efforts
with any organizations that could bring unbanked or underbanked
individuals into the conventional banking system and/or reduce the use of
nonbank financial services providers for unbanked individuals? Examples
may include: employers who use payroll cards, government entities that use
electronic benefit transfer (EBT) or prepaid cards, faith-based groups that
provide cash assistance, etc.
Yes
No
While 36.6 percent of banks participate in education or outreach with other organizations that could
bring un/underbanked individuals into the conventional banking system, 63.4 percent of banks do
not participate with an outside organization.
QIIB-3. Figure 1.
Valid
Does your bank participate in education or outreach with other organizations?
Frequency
363
Weighted
Frequency
4575
Yes
303
2646
36.6
Total
666
7221
100.0
19
219
685
7440
No
Missing
System
Total
Weighted
Percent
63.4
There are differences among regions for banks that partner with other organizations for outreach or
education. A higher percentage of New England (50.1 percent) and Mountain banks (40.0 percent)
partner than West North Central banks (25.6 percent).
QIIB-3. Figure 2.
No
Count
%
Yes
Count
%
Total
Count
%
Region
New
England
222
Does your bank participate in education or outreach with other organizations?
East
West
East
West
MidSouth
South
South
North
North
Central
Central
Central
Central
Mountain
Atlantic Atlantic
359
530
410
680
776
998
304
Pacific
294
49.9%
61.9%
62.7%
61.3%
60.3%
61.1%
74.4%
60.0%
223
221
316
259
449
495
343
203
68.4%
136
50.1%
38.1%
37.3%
38.7%
39.7%
38.9%
25.6%
40.0%
31.6%
446
581
846
669
1129
1271
1341
507
431
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks that partner with other organizations for outreach or
education. Proportionately, larger banks participate in education and outreach with organizations
more frequently than smaller banks. All (100 percent) of Tier 1 banks partner with another
organization, compared with 75.5 percent of Tier 2 banks and 33.3 percent of Tier 3 banks.
57
Education and Outreach Efforts
QIIB-3. Figure 3.
Tier
Does your bank participate in education or outreach with
other organizations?
Tier 1
No
Tier 2
Count
%
Yes
132
4443
.0%
24.5%
66.7%
Count
%
Total
25
406
2215
100.0%
75.5%
33.3%
Count
%
Tier 3
0
25
538
6658
100.0%
100.0%
100.0%
There is a difference between urban and rural banks for participating in education or outreach with
other organizations. A greater percentage (40.2 percent) of urban banks participate with other
organizations than rural banks (33.4 percent).
QIIB-3. Figure 4.
Urban/Rural
Does your bank participate in
education or outreach with
other organizations?
No
Count
%
Yes
Urban HQ
2039
66.6%
59.8%
1272
1373
33.4%
40.2%
3809
3412
100.0%
100.0%
Count
%
Total
Rural HQ
2536
Count
%
Question II C. Does your bank teach (either directly or through a thirdparty) financial literacy and education sessions, such as classes or
workshops, that target unbanked and/or underbanked individuals? Check
all that apply.
Yes, at bank facilities
Yes, at off-premise locations
No
The majority of banks (52.6 percent) teach financial literacy and education sessions.
QIIC. Figure 1. Does your bank teach financial literacy and education sessions?
Valid
Missing
Total
No
Frequency
274
Weighted
Frequency
3481
Weighted
Percent
47.4
Yes, at the bank
27
288
3.9
Yes, off-premise
243
2555
34.8
Yes, at the bank
and off-premise
133
1027
14.0
Total
677
7351
100.0
8
89
685
7440
System
58
Education and Outreach Efforts
There is a difference between regions for banks that teach financial literacy and education sessions.
A greater percentage of New England banks (75.5 percent) teach sessions than among West North
Central banks (42.5 percent).
QIIC. Figure 2. Region
No
Count
%
Yes, at
the
bank
New
England
109
24.5%
47.0%
55.3%
41.4%
41.7%
47.1%
57.5%
47.5%
47.4%
41
14
27
27
31
58
58
27
3
9.2%
2.4%
3.2%
4.1%
2.6%
4.5%
4.2%
5.4%
.8%
164
167
251
274
517
442
386
198
155
36.9%
29.4%
29.2%
40.9%
44.4%
34.1%
27.7%
39.4%
34.7%
131
120
106
91
130
186
148
39
77
29.4%
21.1%
12.3%
13.6%
11.2%
14.3%
10.6%
7.7%
17.1%
Count
%
Yes, at
the
bank
and offpremise
Count
%
Total
Pacific
212
Count
%
Yes,
offpremise
Does your bank teach financial literacy and education sessions?
East
West
East
West
MidSouth
South
South
North
North
Central
Central Central
Mountain
Atlantic Atlantic Central
267
475
277
485
612
803
239
Count
%
446
567
860
669
1163
1298
1396
504
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks that teach financial literacy and education sessions. A
larger percentage of Tier 1 banks (100 percent) teach sessions than Tier 2 banks (83.4 percent) and
Tier 3 banks (50.0 percent).
QIIC. Figure 3. Tier
Does your bank teach financial literacy and
education sessions?
Tier 1
No
Count
%
Yes, at the bank
Count
%
Yes, off-premise
Count
%
Yes, at the bank
and off-premise
Count
%
Total
Count
%
0
Tier 2
90
Tier 3
3391
.0%
16.6%
50.0%
0
28
260
.0%
5.1%
3.8%
5
239
2311
20.8%
43.9%
34.1%
20
187
820
79.2%
34.4%
12.1%
25
544
6781
100.0%
100.0%
100.0%
There is a difference between urban and rural banks for teaching financial literacy and education
sessions that target the un/underbanked. A higher percentage of urban banks (57.2 percent) teach
financial literacy than rural banks (48.6 percent).
59
Education and Outreach Efforts
QIIC. Figure 4. Urban/Rural
Does your bank teach
financial literacy and
education sessions?
No
Count
%
Yes, at the bank
Yes, off-premise
Count
51.4%
42.8%
144
144
3.7%
4.2%
Count
1419
1136
36.5%
32.8%
325
702
8.4%
20.3%
Count
%
Total
Urban HQ
1481
%
%
Yes, at the bank
and off-premise
Rural HQ
2000
Count
%
3888
3463
100.0%
100.0%
Question II C-1. If yes, for how long has your bank been providing the
sessions? _____ (Mark 0 if don’t know)
Banks that teach financial literacy and education sessions report that they have offered education
sessions for a median of 4 years, with the maximum at 35 years.
QIIC-1. Figure 1. If yes, how long has your bank been providing the sessions?
N
Valid
3485
Missing
385
Mean
5.99
Median
4.00
Mode
0
Minimum
0
Maximum
35
60
Education and Outreach Efforts
QIIC-1. Figure 2.
If yes, how long has your bank been providing the sessions?
Weighted
Frequency
Frequency
Valid
Don't Know
88
844
24.2
1
20
243
7.0
2
1
14
.4
2
24
206
5.9
3
23
220
6.3
4
24
234
6.7
5
45
365
10.5
6
11
130
3.7
7
14
105
3.0
8
1
14
.4
8
12
113
3.2
9
4
34
1.0
10
51
461
13.2
11
2
17
.5
12
4
55
1.6
14
2
27
.8
15
18
149
4.3
18
1
14
.4
19
1
1
.0
20
14
138
4.0
21
2
27
.8
23
1
1
.0
25
2
5
.1
30
4
55
1.6
35
Total
Missing
Total
Weighted
Percent
System
1
14
.4
370
3485
100.0
33
385
403
3870
There is no difference between tiers for the length of time banks have been providing educational
sessions.
There are no differences among regions for the length of time banks have been providing
educational sessions.
There is no difference between urban and rural banks for the length of time banks have been
providing educational sessions.
61
Education and Outreach Efforts
Question II C-2. If yes, mark all types of sessions that your bank provides:
___ Basic Banking (Deposit and Credit Products)
___ Home Ownership/Mortgage Products
___ Predatory /Abusive Lending Prevention
___ Credit Counseling
___ Savings Programs
___ Other __________
The two most common types of sessions provided by banks are basic banking (84.8 percent) and
savings programs (70.9 percent).
QIIC-2. Figure 1.
Percent of Banks Teaching Financial Literacy by Type (among banks which provide
sessions)
Basic
Banking
Home
Ownership
Predatory/
Abusive
Lending
Credit
Counseling
Savings
Other
Overall
84.8%
55.2%
23.2%
33.6%
70.9%
23.4%
Tier 1
92.0%
92.0%
79.2%
87.5%
87.5%
48.5%
Tier 2
90.1%
79.4%
37.4%
51.9%
81.7%
25.2%
Tier 3
84.4%
51.6%
20.9%
30.7%
69.3%
23.0%
Urban
88.0%
65.8%
28.2%
37.9%
70.8%
27.6%
Rural
81.8%
43.9%
18.0%
29.1%
70.9%
18.9%
New
England
87.8%
86.9%
30.9%
38.0%
77.7%
21.7%
MidAtlantic
87.0%
65.7%
24.7%
34.3%
75.7%
23.6%
South
Atlantic
80.5%
56.4%
16.1%
19.0%
76.0%
25.8%
East South
Central
87.5%
53.6%
28.0%
38.8%
69.9%
23.5%
West
South
Central
89.8%
39.9%
14.6%
34.4%
75.2%
18.4%
East North
Central
78.6%
56.3%
27.9%
39.4%
64.9%
33.0%
West
North
Central
79.3%
44.0%
18.7%
26.8%
57.8%
12.6%
Mountain
89.8%
58.7%
26.4%
41.9%
79.2%
27.5%
Pacific
92.8%
60.4%
32.6%
31.5%
76.6%
29.7%
62
Education and Outreach Efforts
QIIC-2. Figure 2. Basic Banking
Valid
No
QIIC-2. Figure 5. Credit Counseling
Weighted
Weighted
Frequency Frequency
Percent
54
580
15.2
Valid
345
3235
84.8
Yes
164
1283
33.6
Total
399
3815
100.0
Total
399
3815
100.0
4
55
403
3870
Total
Missing System
Total
QIIC-2. Figure 3. Home Ownership and Mortgage
Products
No
Yes
Total
Missing System
Total
Weighted
Weighted
Percent
Frequency Frequency
147
1709
44.8
252
3815
4
55
403
3870
No
Yes
Valid
Total
Missing System
Total
887
399
3815
4
55
403
3870
No
Weighted
Frequency Frequency
102
1112
Weighted
Percent
29.1
Yes
297
2704
70.9
100.0
Total
399
3815
100.0
Missing System
Total
4
55
403
3870
QIIC-2. Figure 7. Other
Weighted
Weighted
Frequency Frequency
Percent
280
2928
76.8
119
55
3870
55.2
2106
399
4
403
QIIC-2. Figure 6. Savings
QIIC-2. Figure 4. Predatory and Abusive Lending
Prevention
Valid
Weighted
Percent
66.4
Yes
Missing System
Valid
No
Weighted
Frequency Frequency
235
2532
Valid
No
Weighted
Frequency Frequency
299
2924
Weighted
Percent
76.6
23.2
Yes
100
892
23.4
100.0
Total
399
3815
100.0
4
55
403
3870
Missing System
Total
Other types of sessions taught by the bank include: identity theft (20), school educational programs
(16), investment products (9), lending and loan types (9), small business guidance (8), and financial
literacy (8).
There is a difference between tiers for some types of educational sessions provided, including home
ownership and mortgage products, predatory and abusive lending prevention, and credit counseling.
A higher percentage of Tier 1 banks (92.0 percent) offer home ownership education sessions than in
Tier 2 (79.4 percent) and Tier 3 (51.6 percent), as well as for predatory and abusive lending (Tier 1:
79.2 percent, Tier 2: 37.4 percent, Tier 3: 20.9 percent) and credit counseling (Tier 1: 87.5 percent,
Tier 2: 51.9 percent, Tier 3: 30.7 percent).
63
Education and Outreach Efforts
QIIC-2. Figure 8.
Tier
Types of Education Sessions Provided
Tier 1
Tier 2
Tier 3
Home
Predatory
Home
Predatory
Home
Predatory
Ownership
and
Ownership
and
Ownership
and
and
Abusive
and
Abusive
and
Abusive
Mortgage
Lending
Mortgage
Lending
Mortgage
Lending
Basic
Basic
Basic
Banking Products Prevention Banking Products Prevention Banking Products Prevention
No
Count
2
2
5
45
94
284
533
1613
2639
8.0%
8.0%
20.8%
9.9%
20.6%
62.6%
16.0%
48.4%
79.1%
23
23
20
409
361
170
2803
1723
697
92.0%
92.0%
79.2%
90.1%
79.4%
37.4%
84.0%
51.6%
20.9%
25
100.0%
25
100.0%
25
100.0%
454
100.0%
454
100.0%
454
100.0%
3336
100.0%
3336
100.0%
3336
100.0%
%
Yes
Count
%
Total
Count
%
QIIC-2. Figure 9.
Tier
Types of Education Sessions Provided
No
Count
%
Yes
Tier 1
Credit
Counseling Savings
3
3
Savings
1025
Other
2570
77.0%
12.5%
54.2%
48.1%
18.3%
74.8%
69.3%
30.7%
22
22
11
236
371
114
1025
2311
766
87.5%
87.5%
45.8%
51.9%
81.7%
25.2%
30.7%
69.3%
23.0%
25
25
25
454
454
454
3336
3336
3336
100.0% 100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Total Count
%
Tier 3
Credit
Counseling
Other
340
2311
12.5%
Count
%
Tier 2
Credit
Counseling Savings
Other
14
218
83
There are no differences among regions for types of educational sessions provided, except for
“other.” A higher percentage of the banks in the East North Central region (33.0 percent) offer
other programs than banks in the West South Central (18.3 percent) and the West North Central
region (12.7 percent).
QIIC-2. Figure 10. Region
No
Count
%
Yes
Count
%
Total
Count
%
New
England
263
MidAtlantic
230
78.3%
76.5%
“Other” Types of Education Sessions
East
West
East
West
South
South
South
North
North
Central
Central
Central
Central
Atlantic
285
300
520
451
518
74.1%
76.4%
81.7%
67.0%
87.3%
Mountain
192
Pacific
166
72.4%
70.4%
73
71
99
92
117
222
75
73
70
21.7%
23.5%
25.9%
23.6%
18.3%
33.0%
12.7%
27.6%
29.6%
336
300
384
392
637
673
593
264
235
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is no difference between urban and rural banks for types of educational session provided.
64
Education and Outreach Efforts
Question II D. Did your bank conduct off-premise financial education
outreach visits targeted toward the unbanked or underbanked during
calendar year 2007?
Yes
No
Over half (58.0 percent) of banks conducted off-premise financial education outreach visits in 2007.
QIID. Figure 1. Did you conduct off-premise financial outreach in 2007?
Valid
Frequency
244
Weighted
Frequency
3078
Weighted
Percent
42.0
Yes
432
4248
58.0
Total
676
7327
100.0
9
113
685
7440
No
Missing
System
Total
There are no differences among regions for banks that conducted off-premise financial outreach in
2007.
There is a difference between tiers for banks that conducted off-premise financial outreach in 2007.
Nearly all of Tier 1 banks (95.8 percent) conducted outreach visits, compared with 84.8 percent of
Tier 2 and 55.7 percent of Tier 3.
QIID. Figure 2. Tier
Did you conduct off-premise financial outreach in 2007?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
1
83
2994
4.2%
15.2%
44.3%
24
465
3760
95.8%
84.8%
55.7%
25
548
6754
100.0%
100.0%
100.0%
There is little difference between urban and rural for banks that conducted off-premise financial
outreach in 2007.
65
Education and Outreach Efforts
Question II D-1. Please indicate which locations your bank has visited for
outreach sessions:
___ High Schools
___ Employer Sites
___ Public Gatherings/Fairs
___ Local/State Government Sites
___ Community–based Organizations
___ Vocational Schools/Colleges
___ Military Installations
___ Other_________
Banks report that they work with a variety of external organizations to provide outreach to
individuals in their market areas. High schools and community-based organizations are the most
common places banks visit for outreach sessions, with 77.7 percent and 52.6 percent of banks
offering outreach in conjunction with these off-premise locations, respectively.
Military installations are the least frequently visited location for outreach sessions, with about 2.3
percent of banks making visits among those that conducted off-premise financial outreach in 2007.6
QIID-1. Figure 1.
Percent of Banks Offering Outreach by Location
Percentage of
Banks
Outreach Location
High Schools
77.7%
Community–based Organizations
52.6%
Public Gatherings/Fairs
37.3%
Employer Sites
29.4%
Other
24.0%
Vocational Schools/Colleges
18.7%
Local/State Government Sites
9.3%
Military Installations
2.3%
The distribution of military bases is not proportional to the communities served by participating banks, so the percentages may be higher or lower in
different areas around the country.
6
66
Education and Outreach Efforts
QIID-1. Figure 6.
Community-based
Organizations
QIID-1. Figure 2. High Schools
Valid No
Weighted
Frequency Frequency
88
946
Yes
344
Total
432
QIID-1. Figure 3.
Valid
No
4248
432
QIID-1. Figure 4.
Valid
No
Frequency
169
Weighted
Frequency
2012
Weighted
Percent
47.4
77.7
Yes
263
2236
52.6
100.0
Total
432
4248
100.0
QIID-1. Figure 7.
Employer Sites
154
Total
No
3303
Weighted
Frequency Frequency
278
2998
Yes
Valid
Weighted
Percent
22.3
Weighted
Percent
70.6
1251
4248
Valid
No
Vocational Schools
Frequency
314
Weighted
Frequency
3454
Weighted
Percent
81.3
29.4
Yes
118
794
18.7
100.0
Total
432
4248
100.0
QIID-1. Figure 8. Military Installations
Public Gatherings
Weighted
Frequency Frequency
244
2663
Weighted
Percent
62.7
Valid
Weighted Weighted
Frequency Frequency
Percent
412
4150
97.7
No
Yes
188
1586
37.3
Yes
20
99
2.3
Total
432
4248
100.0
Total
432
4248
100.0
QIID-1. Figure 5.
Valid
No
QIID-1. Figure 9.
Local &State Government Sites
Weighted
Frequency Frequency
365
3853
Weighted
Percent
90.7
Yes
67
395
9.3
Total
432
4248
100.0
Valid
Other
Weighted Weighted
Frequency Frequency
Percent
315
3229
76.0
No
Yes
117
1019
24.0
Total
432
4248
100.0
A total of 117 banks identify the following other locations: elementary and middle schools (54),
churches and faith-based organizations (22), non-profit community groups (9), senior citizen or
elderly homes (7), and seminars, programs, or shows (7).
There are differences among regions for locations with off-premise financial outreach including high
schools, employer sites, public gatherings, government sites, and community-based organizations.
A greater percentage of East South Central (93.1 percent) banks conduct sessions at high schools
than banks in New England (61.9 percent).
QIID-1. Figure 10. Region: High Schools
No
Count
%
Yes
Count
%
Total
Count
%
High Schools
West
East
South
North
Central
Central
151
237
New
England
116
MidAtlantic
55
South
Atlantic
38
East
South
Central
31
38.1%
18.6%
8.5%
6.9%
21.4%
189
241
405
416
555
61.9%
81.4%
91.5%
93.1%
78.6%
West
North
Central
150
Mountain
86
Pacific
82
29.8%
19.9%
31.9%
35.4%
559
606
182
150
70.2%
80.1%
68.1%
64.6%
305
296
442
447
705
796
757
268
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
67
Education and Outreach Efforts
A greater percentage of East North Central banks (39.4 percent) conduct sessions at employer sites
than banks in the West North Central (10.5 percent).
QIID-1. Figure 11. Region: Employer Sites
No
Count
%
Yes
Count
%
Total
Count
%
Employer Sites
East
West
East
South
South
North
Central
Central
Central
278
459
482
West
North
Central
677
Mountain
174
Pacific
173
60.6%
89.5%
65.1%
74.4%
313
80
93
59
35.0%
39.4%
10.5%
34.9%
25.6%
705
796
757
268
232
100.0%
100.0%
100.0%
100.0%
100.0%
New
England
233
MidAtlantic
217
South
Atlantic
305
76.1%
73.4%
68.9%
62.2%
65.0%
73
79
138
169
247
23.9%
26.6%
31.1%
37.8%
305
296
442
447
100.0%
100.0%
100.0%
100.0%
A greater percentage of banks in the Mountain region (56.6 percent) conduct sessions at public
gatherings than banks in the South Atlantic region (23.4 percent).
QIID-1. Figure 12. Region: Public Gatherings
No
Count
%
Yes
Count
%
Total
Count
%
Public Gatherings
East
West
East
South
South
North
Central
Central
Central
284
510
414
West
North
Central
503
Mountain
116
Pacific
171
52.0%
66.4%
43.4%
73.9%
382
254
152
61
27.7%
48.0%
33.6%
56.6%
26.1%
705
796
757
268
232
100.0%
100.0%
100.0%
100.0%
100.0%
New
England
147
MidAtlantic
178
South
Atlantic
339
48.2%
60.3%
76.6%
63.5%
72.3%
158
117
104
163
195
51.8%
39.7%
23.4%
36.5%
305
296
442
447
100.0%
100.0%
100.0%
100.0%
A greater percentage of banks in the Mountain region (19.6 percent) conduct sessions at
government sites than banks in the South Atlantic region (5.9 percent).
QIID-1. Figure 13. Region: Local and State Government Sites
No
Count
%
Yes
Count
%
Total
Count
%
Local and State Government Sites
East
West
East
South
South
North
South
Atlantic
Central
Central
Central
416
415
606
710
New
England
287
MidAtlantic
262
94.0%
88.5%
94.1%
92.9%
85.9%
18
34
26
32
100
6.0%
11.5%
5.9%
7.1%
14.1%
West
North
Central
750
Mountain
215
Pacific
192
89.2%
99.1%
80.4%
82.8%
86
7
52
40
10.8%
.9%
19.6%
17.2%
305
296
442
447
705
796
757
268
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
A greater percentage of New England banks (84.3 percent) conduct sessions at community-based
organizations than banks in the Mountain region (38.8 percent).
68
Education and Outreach Efforts
QIID-1. Figure 14. Region: Community-based Organizations
No
Count
%
Yes
Count
%
Total
Count
%
Community-based Organizations
East
West
East
South
South
North
South
Atlantic
Central
Central
Central
219
186
407
362
New
England
48
MidAtlantic
92
15.7%
31.3%
49.5%
41.6%
57.7%
258
203
224
261
298
84.3%
68.7%
50.5%
58.4%
42.3%
West
North
Central
455
Mountain
164
Pacific
79
45.5%
60.1%
61.2%
34.0%
433
302
104
153
54.5%
39.9%
38.8%
66.0%
305
296
442
447
705
796
757
268
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between tiers for off-premise financial outreach locations of employer sites,
public gatherings, government sites, community-based organizations, vocational schools, military
installations, and “other” sites. A greater percentage of Tier 1 banks conduct sessions at all of these
locations than Tier 2 banks, and a greater percentage of Tier 2 banks conduct sessions at all of these
locations than Tier 3 banks.
QIID-1. Figure 15. Tier: High Schools/Employer Sites/Public Gatherings
Off-Premise Outreach Locations
No
Count
%
Yes
Count
%
Total Count
%
Tier 1
Tier 2
Tier 3
High
Employer
Public
High
Employer
Public
High
Employer
Public
Schools
Sites
Gatherings Schools
Sites
Gatherings Schools
Sites
Gatherings
1
3
0
83
260
229
861
2734
2434
4.3%
13.0%
.0%
17.9%
56.0%
49.3%
22.9%
72.7%
64.7%
23
21
24
381
205
236
2898
1025
1326
95.7%
87.0%
100.0%
82.1%
44.0%
50.7%
77.1%
27.3%
35.3%
24
24
24
465
465
465
3760
3760
3760
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIID-1. Figure 16. Tier: Local and State Government Sites/ Community-based Organizations/
Vocational Schools
Off-Premise Outreach Locations
Tier 1
Tier 2
Tier 3
Local and
Local and
Local and
State
State
State
Government Community- Vocational Government Community- Vocational Government Community- Vocational
Sites
based Orgs Schools
Sites
based Orgs Schools
Sites
based Orgs Schools
No
Count
%
Yes
Count
%
Total
Count
%
6
1
5
361
97
264
3486
1914
3186
26.1%
4.3%
21.7%
77.6%
20.9%
56.7%
92.7%
50.9%
84.7%
18
23
19
104
368
201
273
1846
574
73.9%
95.7%
78.3%
22.4%
79.1%
43.3%
7.3%
49.1%
15.3%
24
24
24
465
465
465
3760
3760
3760
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
69
Education and Outreach Efforts
QIID-1. Figure 17. Tier: Military Installations/Other
Off-Premise Outreach Locations
No
Count
Tier 1
Military
Installations
15
%
Yes
60.9%
Count
%
Total
Count
%
Other
11
47.8%
Tier 2
Military
Installations
444
95.5%
Other
319
Tier 3
Military
Installations
3691
68.7%
98.2%
Other
2898
77.1%
9
13
21
146
68
861
39.1%
52.2%
4.5%
31.3%
1.8%
22.9%
24
24
465
465
3760
3760
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks for the locations of off-premise financial
education sessions, including high schools, employer sites, public gatherings, government sites,
community-based organizations, vocational schools, and “other” sites.
QIID-1. Figure 18. Rural
Off-Premise Outreach Locations
No
Count
%
Yes
Count
%
Total
Count
%
High
Schools
352
Employer
Sites
1727
Public
Gatherings
1580
15.8%
77.4%
70.8%
Rural HQ
Local and
State
CommunityGovernment
based
Sites
Organizations
2089
1241
93.7%
Vocational
Schools
1904
Military
Installations
2182
Other
1792
85.4%
97.8%
80.4%
55.7%
1878
503
650
140
989
325
48
438
84.2%
22.6%
29.2%
6.3%
44.3%
14.6%
2.2%
19.6%
2230
2230
2230
2230
2230
2230
2230
2230
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Vocational
Schools
1550
Military
Installations
1968
Other
1437
QIID-1. Figure 19. Urban
Off-Premise Outreach Locations
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Local and
State
CommunityGovernment
based
Sites
Organizations
1764
771
High
Schools
593
Employer
Sites
1271
Public
Gatherings
1083
29.4%
63.0%
53.6%
87.4%
38.2%
76.8%
97.5%
71.2%
1425
748
936
255
1247
469
51
582
70.6%
37.0%
46.4%
12.6%
61.8%
23.2%
2.5%
28.8%
2019
2019
2019
2019
2019
2019
2019
2019
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
70
Education and Outreach Efforts
Question II E. Does the bank work with corporate or business customers to
provide services for their unbanked employees?
Yes
No
Less than half of banks (38.2 percent) work with corporate or business customers to provide
services for their unbanked employees. Proportionately, larger banks are more likely to work with
corporate or business customers when compared with smaller banks.
QIIE. Figure 1. Does your bank work with corporate or business customers?
Valid
Frequency
376
Weighted
Frequency
4501
Yes
295
2778
38.2
Total
671
7279
100.0
No
Missing
System
Total
14
161
685
7440
Weighted
Percent
61.8
There are differences among regions for banks that work with corporate or business customers. A
greater percentage of banks in the East South Central (49.9 percent) and West South Central (49.5
percent) regions work with business customers than banks in the Mid-Atlantic (23.7 percent).
QIIE. Figure 2. Region
No
Count
New
England
281
%
Yes
63.6%
Count
%
Total Count
%
Does your bank work with corporate or business customers?
East
West
West
MidSouth
East North
South
South
North
Atlantic
Atlantic
Central
Central
Central
Central
Mountain
440
445
321
595
773
974
369
76.3%
52.6%
50.1%
50.5%
60.6%
71.2%
72.8%
Pacific
302
67.9%
161
137
401
320
582
502
394
138
143
36.4%
23.7%
47.4%
49.9%
49.5%
39.4%
28.8%
27.2%
32.1%
442
577
846
642
1177
1274
1369
507
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks that work with corporate or business customers. A
higher percentage of banks in Tier 1 (87.5 percent) partners with businesses than in both Tier 2
(62.2 percent) and Tier 3 (36.0 percent).
QIIE. Figure 3. Tier
No
Count
%
Yes
Count
%
Total
Count
%
Does your bank work with corporate or business
customers?
Tier 1
Tier 2
Tier 3
3
205
4293
12.5%
37.8%
22
336
64.0%
2420
87.5%
62.2%
36.0%
25
541
6713
100.0%
100.0%
100.0%
71
Education and Outreach Efforts
There is a difference between urban and rural banks for banks that work with corporate or business
customers. A greater percentage of urban banks (42.5 percent) work with corporate customers
compared with rural banks (34.3 percent).
QIIE. Figure 4. Urban/Rural
Does your bank work with
corporate or business
customers?
No
Count
Rural HQ
2530
Urban HQ
1971
65.7%
57.5%
%
Yes
Count
%
Total
Count
%
1320
1458
34.3%
42.5%
3850
3429
100.0%
100.0%
Question II E-1. If yes, does the bank offer payroll cards?
Yes
No
Among all banks that work with business customers, 14.1 percent offer payroll cards.
QIIE-1. Figure 1.
Valid
No
Missing
Does your bank offer payroll cards?
Frequency
226
Weighted
Frequency
2330
Weighted
Percent
85.9
Yes
62
383
14.1
Total
288
2713
100.0
System
Total
7
65
295
2778
There are no differences among regions for banks that offer payroll cards.
There is a difference between tiers for banks that offer payroll cards. Almost three-quarters of Tier 1
banks that work with business customers (71.4 percent) offer payroll cards, compared with 28.7
percent in Tier 2 and 11.6 percent in Tier 3.
QIIE-1. Figure 2.
Tier
Does your bank offer payroll cards?
1
No
Count
%
Yes
Count
%
Total
Count
%
2
3
6
232
2092
28.6%
71.3%
88.4%
16
94
273
71.4%
28.7%
11.6%
22
326
2365
100.0%
100.0%
100.0%
72
Education and Outreach Efforts
There is a difference between urban and rural banks for banks that work with business customers
and offer payroll cards. A greater percentage of urban banks that work with business customers
(17.0 percent) offer payroll cards, compared with 11.0 percent of rural banks.
QIIE-1. Figure 3.
Urban/Rural
Does your bank offer payroll
cards?
No
Count
Rural HQ
1163
Urban HQ
1168
89.0%
83.0%
144
239
11.0%
17.0%
1307
1407
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
Question II E-1. a) If yes, how many payroll cards has the bank issued
during the year 2007?
Of the banks that specify how many payroll cards they had issued in 2007, the mean is 809 cards,
and the median is 4 cards. This uneven distribution of cards is likely due to the largest banks in Tier
1 offering an average of 16,000 cards, which skews the overall average.
QIIE-1a. Figure 1. Weighted: How many payroll cards has your bank issued during 2007?
N
Valid
Missing
Mean
Median
Mode
287
96
809.28
4.00
0
Minimum
0
Maximum
130,000
There is no difference between tiers for the number of payroll cards that banks issued in 2007.
There are no differences among regions for the number of payroll cards that banks issued during
2007.
There is no difference between urban and rural banks for the number of payroll cards that banks
issued in 2007.
73
Education and Outreach Efforts
Question II E-1. b) Describe the features and fees associated with this card
(if any).
Among the 62 banks that report offering payroll cards, there is little consistency or similarity in the
types and levels of associated fees. Some programs charge end-user fees for ATM and point-of-sale
(POS) transactions, while others charge corporate fees for payroll card disbursements. Some banks
do not charge any fees in an effort to encourage non-customers to become bank customers.
Forty-nine banks currently have active payroll card programs. Of the remaining banks, seven are in
development, one was previously discontinued, and five did not elaborate further.
Nine banks offer payroll cards through a third-party processor.
Twenty payroll card programs also have debit card capabilities. More programs may offer this
capability, but it is only explicitly stated in these 20 banks responses.
No programs share identical features and characteristics. Each bank has a unique fee structure and
charges different types of fees at differing amounts.
Seven banks’ payroll cards do not charge fees for activation and use.
Eleven banks charge card replacement fees between $5.00 and $15.00 with the most common
being $10.00 (seven banks).
Thirteen banks charge monthly fees, ranging from $1.00 to $9.99. None specify whether the
employer or the employee is responsible for these fees.
Twenty banks explain what types of ATM fees are associated with the card, five of which offer
free unlimited usage of proprietary ATMs. Four banks offer free proprietary ATM withdrawals
up to a certain monthly threshold before charging a fee of $1.00 to $2.00 per use. Eleven banks
charge a set fee for every domestic ATM withdrawal, proprietary or not, ranging between $0.95
and $2.00.
Seven banks charge fees for international ATM withdrawals, with a mean of $3.00.
Seven banks charge NSF or insufficient funds fees on payroll cards, varying between $9.95 and
$35.00. In contrast, there is one instance where the card cannot be overdrawn since purchases
are only approved up to the available balance.
74
Education and Outreach Efforts
Question II F. Does the bank use targeted marketing (e.g., meetings with
large employers, mailings, etc.) to reach unbanked and/or underbanked
individuals?
Yes
No
About a quarter (25.2 percent) of banks use targeted marketing to reach the unbanked and
underbanked.
QIIF. Figure 1. Does your bank use targeted marketing to reach un/underbanked individuals?
Valid
Frequency
456
Weighted
Frequency
5358
Weighted
Percent
74.8
Yes
208
1805
25.2
Total
664
7163
100.0
21
277
685
7440
No
Missing
System
Total
There is a difference between regions for banks that use targeted marketing to reach
un/underbanked individuals. A greater percentage of banks in the East North Central region (33.0
percent) use targeted marketing than banks in the Mountain region (15.5 percent).
QIIF. Figure 2. Region
No
Count
%
Yes
Count
%
Total
Count
%
New
England
322
Does your bank use targeted marketing to reach un/under banked individuals?
East
West
East
West
South
South
North
North
Mid
South
Atlantic
Atlantic
Central
Central
Central
Central Mountain
409
630
508
793
843
1087
429
Pacific
336
72.3%
70.5%
77.0%
77.5%
69.8%
67.0%
82.7%
84.5%
75.0%
123
171
188
147
343
415
227
79
112
27.7%
29.5%
23.0%
22.5%
30.2%
33.0%
17.3%
15.5%
25.0%
446
581
819
655
1136
1257
1314
507
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks that use targeted marketing to reach un/underbanked
individuals. A higher percentage of banks in Tiers 1 (66.7 percent) and 2 (51.9 percent) use targeted
marketing than banks in Tier 3 (22.8 percent).
QIIF. Figure 3. Tier
Does your bank use targeted marketing to
reach un/underbanked individuals?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
8
264
Tier 3
5086
33.3%
48.1%
77.2%
17
284
1504
66.7%
51.9%
22.8%
25
548
6590
100.0%
100.0%
100.0%
75
Education and Outreach Efforts
There is a difference between urban and rural banks for banks that use targeted marketing to reach
the un/underbanked. Less than a third (30.8 percent) of urban banks use targeted marketing
compared with only one-fifth (20.1 percent) of rural banks.
QIIF. Figure 4. Urban/Rural
Does your bank use targeted
marketing to reach
un/underbanked individuals?
No
Count
Rural HQ
2998
Urban HQ
2360
79.9%
69.2%
756
1049
20.1%
30.8%
3754
3409
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
Question II F-1. If yes, are there particular segments of the unbanked
and/or underbanked population your bank is targeting?
Yes
No
Among banks that use targeted marketing, 55.3 percent target a specific segment of the population.
QIIF-1. Figure 1. Are there particular segments that you target?
Valid
No
Missing
Frequency
80
Weighted
Frequency
795
Weighted
Percent
44.7
Yes
126
982
55.3
Total
206
1778
100.0
System
Total
2
27
208
1805
There are few differences among regions for banks that target particular segments.
There is a difference between tiers for banks that target particular segments. Nearly all (93.8 percent)
of Tier 1 banks target a specific segment, compared with 65.9 percent of Tier 2 and 52.8 percent of
Tier 3.
QIIF-1. Figure 2. Tier
Are there particular segments that you
target?
1
No
Count
%
Yes
Count
%
Total
Count
%
2
3
1
97
697
6.3%
34.1%
47.2%
16
187
779
93.8%
65.9%
52.8%
17
284
1477
100.0%
100.0%
100.0%
76
Education and Outreach Efforts
There is a slight difference between urban and rural banks for banks that target specific segments.
More that half of urban banks (56.2 percent) target specific segments, as do 53.9 percent of rural
banks.
QIIF-1. Figure 3. Urban/Rural
Are there particular
segments that you target?
No
Count
Rural HQ
342
Urban HQ
453
46.1%
43.8%
401
582
53.9%
56.2%
743
1035
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
Question II F-2. If yes, which segments? Mark all that apply.
Working poor
Consumers on public
assistance
Post disaster assistance
Urban residents
Rural residents
Immigrants
African Americans
Hispanic Americans
Asian Americans
Other
Among banks that target a specific segment, banks target the Hispanic-American segment most
frequently (45.3 percent).
QIIF-2. Figure 1. Percent of Banks Targeting Specific Population Segments
Segment
Percentage of Banks
Hispanic Americans
45.3%
Working Poor
34.5%
Rural Residents
29.6%
African Americans
23.5%
Other
22.8%
Urban Residents
22.3%
Immigrants
17.7%
Consumers on Public Assistance
15.5%
Asian Americans
10.6%
Post-disaster Assistance
6.2%
77
Education and Outreach Efforts
QIIF-2. Figure 2. Working Poor
Valid
No
QIIF-2. Figure 7. Immigrants
Weighted Weighted
Frequency Frequency Percent
99
859
65.5
Valid
Yes
64
453
34.5
Yes
38
232
17.7
Total
163
1312
100.0
Total
163
1312
100.0
45
493
208
1805
Missing System
Total
Missing System
Total
QIIF-2. Figure 3. Consumers on Public Assistance
Valid
No
QIIF-2. Figure 8. African Americans
Weighted Weighted
Frequency Frequency Percent
134
1109
84.5
Valid
15.5
Yes
53
308
23.5
Total
163
1312
100.0
Total
163
1312
100.0
45
493
45
493
208
1805
208
No
Yes
Total
Missing System
Total
Missing System
Total
1805
QIIF-2. Figure 9. Hispanic Americans
Weighted Weighted
Frequency Frequency Percent
147
1228
93.8
15
81
162
1309
46
496
208
1805
Valid
6.2
100.0
No
Yes
Total
Missing System
Total
87
594
45.3
Total
163
1312
100.0
45
493
208
1805
QIIF-2. Figure 10. Asian Americans
292
163
1312
45
493
208
1805
Valid
No
Weighted Weighted
Frequency Frequency Percent
135
1173
89.4
22.3
Yes
28
139
10.6
100.0
Total
163
1312
100.0
45
493
208
1805
Missing System
Total
QIIF-2. Figure 6. Rural Residents
No
Yes
Total
Weighted Weighted
Frequency Frequency Percent
113
1020
77.7
50
No
Weighted Weighted
Frequency Frequency Percent
76
718
54.7
Missing System
QIIF-2. Figure 5. Urban Residents
QIIF-2. Figure 11. Other
Weighted Weighted
Frequency Frequency Percent
119
924
70.4
Valid
No
Weighted Weighted
Frequency Frequency Percent
126
1013
77.2
Yes
44
388
29.6
Yes
37
299
22.8
Total
163
1312
100.0
Total
163
1312
100.0
Missing System
Total
No
Weighted Weighted
Frequency Frequency Percent
110
1004
76.5
203
QIIF-2. Figure 4. Post-disaster Assistance
Valid
493
1805
29
Total
Valid
45
208
Yes
Missing System
Valid
No
Weighted Weighted
Frequency Frequency Percent
125
1080
82.3
45
493
208
1805
Missing System
Total
78
45
493
208
1805
Education and Outreach Efforts
Thirty-seven banks mention targeted segments other than those listed in Question II F-2. The
leading segments are individuals living in low and moderate-income (LMI) areas within the bank’s
area (8), students (8), and local businesses (7).
There is no difference between regions for targeted segments, except for rural residents. A higher
proportion of banks in the West South Central region (75.4 percent) target rural residents than
banks in the West North Central region (13.3 percent).
QIIF-2. Figure 12. Region
Rural Residents
No
Yes
Total
Count
New
England
65
Mid
Atlantic
67
South
Atlantic
82
East
South
Central
31
West
South
Central
38
East
North
Central
180
West
North
Central
96
Mountain
21
Pacific
42
%
82.6%
59.7%
61.4%
44.9%
24.6%
84.5%
86.7%
43.0%
67.2%
Count
14
46
51
38
117
33
15
27
21
%
17.4%
40.3%
38.6%
55.1%
75.4%
15.5%
13.3%
57.0%
32.8%
Count
79
113
133
69
154
213
111
48
63
%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between tiers for targeted segments including post-disaster assistance, urban
residents, immigrants, African Americans, Hispanic Americans, and Asian Americans. A greater
percentage of banks in Tier 1 target these segments than banks in either Tier 2 or Tier 3.
QIIF-2. Figure 13. Tier 1
Tier 1
No
Count
Post-disaster
Assistance
10
Urban
Residents
5
66.7%
5
33.3%
%
Yes
Count
%
Total
Count
6
African
Americans
3
33.3%
40.0%
10
9
66.7%
60.0%
Immigrants
Hispanic
Americans
1
Asian
Americans
7
20.0%
6.7%
46.7%
13
15
8
80.0%
93.3%
53.3%
16
16
16
16
16
16
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Post-disaster
assistance
163
Urban
residents
97
Immigrants
128
African
Americans
97
88.7%
51.9%
68.5%
21
90
59
11.3%
48.1%
184
187
100.0%
100.0%
%
QIIF-2. Figure 14. Tier 2
Tier 2
No
Count
%
Yes
Count
%
Total
Count
%
79
Hispanic
Americans
45
Asian
Americans
139
51.9%
24.1%
74.1%
90
142
49
31.5%
48.1%
75.9%
25.9%
187
187
187
187
100.0%
100.0%
100.0%
100.0%
Education and Outreach Efforts
QIIF-2. Figure 15. Tier 3
Tier 3
No
Count
Post-disaster
Assistance
752
Urban
Residents
615
Immigrants
656
African
Americans
602
Hispanic
Americans
396
Asian
Americans
725
93.2%
76.3%
81.4%
74.6%
49.2%
89.8%
%
Yes
Count
%
Total
55
191
150
205
410
82
6.8%
23.7%
18.6%
25.4%
50.8%
10.2%
807
807
807
807
807
807
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
There are differences between urban and rural banks for the specific segments banks target,
specifically consumers on public assistance, urban residents, immigrants, African Americans,
Hispanic Americans, and Asian Americans. Urban residents are different between tiers, while rural
residents are not. This may be explained by the fact that urban-headquartered banks may serve rural
market areas, while rural banks are less likely to operate in urban markets.
QIIF-2. Figure 16. Rural
Rural HQ
Consumers
PostWorking on Public
disaster
Urban
Rural
African
Hispanic
Asian
Poor
Assistance Assistance Residents Residents Immigrants Americans Americans Americans “Other”
No
Count
%
Yes
Count
%
Total Count
%
329
455
462
462
319
455
431
291
64.0%
88.7%
90.6%
90.0%
62.0%
88.7%
84.0%
56.7%
185
58
48
51
195
58
82
223
36.0%
11.3%
9.4%
10.0%
38.0%
11.3%
16.0%
43.3%
514
514
510
514
514
514
514
514
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
486
360
94.7% 70.0%
27
154
5.3% 30.0%
514
514
100.0% 100.0%
QIIF-2. Figure 17. Urban
Urban HQ
Consumers
PostWorking on Public
disaster
Urban
Rural
African
Hispanic
Asian
Poor
Assistance Assistance Residents Residents Immigrants Americans Americans Americans “Other”
Count
No
%
Count
Yes
%
Count
Total %
531
654
766
558
606
624
573
427
66.5%
81.8%
95.9%
69.9%
75.9%
78.2%
71.8%
53.5%
268
145
33
241
193
174
226
372
33.5%
18.2%
4.1%
30.1%
24.1%
21.8%
28.2%
46.5%
799
799
799
799
799
799
799
799
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
80
687
653
86.0% 81.8%
112
145
14.0% 18.2%
799
799
100.0% 100.0%
Education and Outreach Efforts
Question II G. Does the bank have any other outreach and education
programs to encourage unbanked or underbanked consumers to open an
account?
Yes
No
Other than the types of outreach and education programs specified in the survey, 16.8 percent of
banks offer some other type of outreach or education program to help encourage unbanked or
underbanked customers to open an account.
QIIG. Figure 1. Does your bank have any other outreach or education programs to encourage unbanked or
underbanked consumers to open an account?
Valid
Frequency
521
Weighted
Frequency
6007
Weighted
Percent
83.2
Yes
145
1214
16.8
Total
666
7221
100.0
19
219
685
7440
No
Missing
System
Total
There are no differences among regions for other outreach and education programs.
There is a difference between tiers for other outreach and education. Over half (58.3 percent) of
Tier 1 banks do other outreach, compared with 37.4 percent of Tier 2 and 15.0 percent of Tier 3.
QIIG. Figure 2. Tier
Does your bank have any other outreach or
education?
Tier 1
No
%
Yes
336
41.7%
62.6%
85.0%
Count
%
Total
10
Tier 3
5660
Count
15
201
998
58.3%
37.4%
15.0%
25
538
6658
100.0%
100.0%
100.0%
Count
%
Tier 2
There is a difference between urban and rural banks for banks that offer other outreach or
education. About one-fifth (19.4 percent) of urban banks offer other outreach, while 14.5 percent of
rural banks offer other outreach.
QIIG. Figure 3. Urban/Rural
Does your bank have any
other outreach or education?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
3279
Urban HQ
2728
85.5%
80.6%
557
656
14.5%
19.4%
3836
3385
100.0%
100.0%
81
Education and Outreach Efforts
Question II G-1. If yes, please describe.
Outreach efforts conducted by responding banks commonly utilize banking industry programs,
partner with third-party organizations, and offer a variety of school-based educational programs.
Banks’ efforts to educate children through schools help banks to build foundational relationships
that will increase a child’s likelihood of becoming customers in the future and to provide indirect
exposure to their unbanked parents.
Local (4), state (8), and proprietary (15) outreach education efforts are described in 27 of 150
total open-ended responses.
National banking programs are mentioned in 48 instances among the total 150 responses.
Among national programs, the FDIC’s Money Smart program appears most frequently,
accounting for 12 out of the 150 responses. ABA programs, such as Teach Children to Save
Day, are mentioned on ten occasions, while participating in IRS VITA programs is the third
most frequently cited (9) among national programs.
Over a quarter (43/150) of responding banks offer some form of K-12 or local college financial
education sessions that are not specifically linked to a national program. Financial literacy and
basic banking skills are typically the focus of these visits.
Less than a quarter (32/150) of responding banks encourage specific types of checking, savings,
IDA, and direct deposit accounts. Of these responses, nine banks offer IDAs.
Over a quarter (44/150) of respondents either partner with third-party organizations or offer
public workshops and seminars in the community. Seminars offered by these banks cover topics
including identity theft, budgeting, home ownership, and immigrant education.
82
Education and Outreach Efforts
Effectiveness of Education and Outreach
Programs
Question II H. What are the three most effective types of financial
education, outreach, and marketing programs that your bank has used to
help establish account relationships with unbanked and/or underbanked
individuals? Please rank 1 to 3, where 1 = most effective, 2 = second most
effective, and 3 = third most effective.
Ranking
Programs
Advantages/Disadvantages
Financial Education Materials
Providing Financial Education
Sessions
Outreach Visits
Participation in Other
Organizations
Targeted Marketing
Other: _____
Rankings were calculated with a reverse scoring system, where each ranking of 1 received five
points, a rank of 2 received four points, etc. Overall rankings were then calculated according to the
sum of points for each type of program using this approach.
Overall, banks rank financial education sessions as the most effective type of financial education and
outreach program that they have used in establishing an account relationship with un/underbanked
individuals, followed by participation in other organizations, and outreach visits.
QIIH Figure 1.
Most Effective Types of Financial Education and Outreach Programs
(Calculated Ranking)
Ranking
Programs
1 Providing Financial Education Sessions
2 Participation in Other Organizations
3 Outreach Visits
4 Financial Education Materials
5 Targeted Marketing
6 Other
83
Education and Outreach Efforts
Almost all (99.3 percent) of the banks rank financial education sessions as one of the top three most
effective programs that they have used.
QIIH Figure 2.
Valid
Financial Education Sessions
1
Frequency
124
Weighted
Frequency
1067
Weighted
Percent
35.6
2
124
1184
39.5
3
77
729
24.3
4
2
7
.2
5
Missing
1
14
.5
Total
328
3000
100.0
System
357
4440
685
7440
Total
The following charts show the rankings of effectiveness for each type of program by how banks
responded to whether they perceived un/underbanked individuals in their service areas.
QIIH Figure 3.
Advantages of Financial Education Sessions (non-weighted)
88 Banks Listed an Advantage(s)
Advantage
Direct, personalized contact reaching the targeted audience
Partnering with 3rd party to provide valuable, tailored education
Other
QIIH Figure 4.
Mentions
54
32
11
% of
Mentions
55.7%
33.0%
11.3%
% of Banks
(Advantages)
61.4%
36.4%
12.5%
Disadvantages of Financial Education Sessions (non-weighted)
53 Banks Listed a Disadvantage(s)
Disadvantage
Lack of participation
Cost and time constraints
Effectiveness issues
Other
Mentions
23
18
10
7
% of
Mentions
39.7%
31.0%
17.2%
12.1%
% of Banks
(Disadvantages)
43.4%
34.0%
18.9%
13.2%
Among the 88 banks that list advantages, 54 identify direct, personalized contact as a reason for
their financial education programs’ effectiveness. Partnering with a third-party or providing valuable,
tailored information is the second most frequently mentioned advantage (32/88).
Lack of participation and attendance is the most frequently cited disadvantage (23/53). Only one of
the banks that listed this disadvantage also listed partnering with a third-party as an advantage.
Almost all (97.5 percent) of the banks rank participation in other organizations as one of the top
three most effective programs that they have used. Participation in other organizations is the second
most frequently ranked program and received the second most first place rankings.
84
Education and Outreach Efforts
QIIH Figure 5.
Valid
Missing
Participation in Programs with Other Organizations
1
Frequency
121
Weighted
Frequency
1135
Weighted
Percent
39.9
2
92
833
29.3
3
79
802
28.2
4
5
58
2.0
5
1
14
.5
Total
298
2842
100.0
System
387
4598
685
7440
Total
QIIH Figure 6.
Advantages of Participation with Other Organizations (non-weighted)
95 Banks Listed an Advantage(s)
Mentions
% of
Mentions
% of Banks
(Advantages)
Partnering with trusted third parties provides access to large,
target markets.
42
42.9%
44.2%
Build relationships with other organizations and new customers
19
19.4%
20.0%
Other
17
17.3%
17.9%
Able to personalize approach and have direct contact
11
11.2%
11.6%
Helps in understanding the needs of the population
9
9.2%
9.5%
Advantage
QIIH Figure 7.
Disadvantages of Participation with Other Organizations (non-weighted)
27 Banks Listed a Disadvantage(s)
Mentions
% of
Mentions
% of Banks
(Disadvantages)
High level of time, cost and staff effort involved
9
29.0%
33.3%
Low participation or effectiveness
9
29.0%
33.3%
Unable to highlight our specific bank services, and lost control
over messages sent out
6
19.4%
22.2%
Unfocused form of passive education
4
12.9%
14.8%
Other
3
9.7%
11.1%
Disadvantage
Banks identify the most advantages for partnering with other organizations (95) among all programs.
Forty-two of the 95 responses are based on partnering with trusted third parties to provide access to
target markets.
The most commonly cited disadvantages are very similar to those listed under providing financial
education sessions and outreach visits. These include cost and time constraints, lack of participation,
and effectiveness issues.
Almost all (97.6 percent) banks rank outreach visits as one of the top three most effective programs
that they have used. Outreach visits receive the second fewest total rankings, but among those who
rank it, 40.9 percent rank it first in effectiveness.
85
Education and Outreach Efforts
QIIH Figure 8.
Valid
Missing
Outreach Visits
1
Frequency
107
Weighted
Frequency
1119
Weighted
Percent
40.9
2
74
747
27.3
3
85
806
29.4
4
3
31
1.1
5
4
34
1.3
Total
273
2737
100.0
System
412
4703
685
7440
Total
QIIH Figure 9.
Advantages of Outreach Visits (non-weighted)
73 Banks Listed an Advantage(s)
Mentions
% of
Mentions
% of Banks
(Advantages)
Direct, personalized contact reaching the targeted audience
43
55.1%
58.9%
Partnering with third party to provide valuable, tailored
information in a comfortable environment
23
29.5%
31.5%
Other
12
15.4%
16.4%
Mentions
% of
Mentions
% of Banks
(Disadvantages)
Cost and time constraints
8
32.0%
32.0%
Lack of Participation
7
28.0%
28.0%
Effectiveness issues
6
24.0%
24.0%
Other
4
16.0%
16.0%
Advantage
QIIH Figure 10. Disadvantages of Outreach Visits (non-weighted)
25 Banks Listed a Disadvantage(s)
Disadvantage
Banks do not discern many differences in the advantages and disadvantages between providing
financial education sessions and outreach visits. Comments on these two programs are very similar
and may be due to the high likelihood that educational elements are included in outreach visits.
Two advantages are mentioned by 66 of the 73 banks:
Direct, personalized contact with the target audience
Partnering with third parties or providing valuable, tailored information in a comfortable
environment
Cost and time restraints (8) are the most frequently mentioned disadvantages followed closely by
lack of participation and attendance (7).
Almost all (97.2 percent) banks that rank financial education materials rank it as one of the top three
most effective programs that they have used.
86
Education and Outreach Efforts
QIIH Figure 11. Financial Education Materials
Valid
Frequency
78
Weighted
Frequency
919
Weighted
Percent
32.1
2
87
884
30.9
3
107
982
34.3
4
6
62
2.2
5
2
17
.6
Total
280
2863
100.0
System
405
4577
685
7440
1
Missing
Total
There are differences among regions for banks’ rankings of financial education materials. Banks in
the West North Central region (51 percent rank it as number one) rank financial education materials
as more effective than banks in the New England region (2 percent rank it as number one).
QIIH Figure 12. Region
1
Count
%
2
Count
%
3
Count
%
4
Count
%
5
Count
%
Total Count
%
New
England
3
MidAtlantic
33
South
Atlantic
92
1.9%
16.0%
39.2%
Financial Education Materials
East
West
East
South
South
North
Central
Central
Central
82
144
103
25.1%
31.6%
21.6%
West
North
Central Mountain
332
99
51.0%
39.5%
Pacific
31
35.4%
41
92
66
107
144
134
198
87
14
23.1%
45.0%
28.0%
32.8%
31.6%
28.4%
30.5%
34.5%
16.0%
133
80
64
138
147
206
120
65
29
75.0%
39.0%
27.0%
42.2%
32.3%
43.5%
18.4%
26.0%
32.9%
0
0
14
0
17
31
0
0
0
.0%
.0%
5.8%
.0%
3.8%
6.5%
.0%
.0%
.0%
0
0
0
0
3
0
0
0
14
.0%
.0%
.0%
.0%
.8%
.0%
.0%
.0%
15.7%
178
205
236
327
455
474
650
251
87
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks’ rankings of the effectiveness of financial education
materials. Banks in Tier 2 (2.41 mean ranking) rank financial education materials lower than banks in
Tier 3 (2.05 mean ranking).
87
Education and Outreach Efforts
QIIH Figure 13. Tier
Financial Education Materials
1
1
%
2
4
42
875
13.3%
15.8%
33.9%
4
87
793
26.7%
32.9%
30.7%
9
125
848
60.0%
47.4%
32.8%
Count
%
Count
%
5
0
7
55
.0%
2.6%
2.1%
Count
0
3
14
.0%
1.3%
.5%
16
264
2584
100.0%
100.0%
100.0%
%
Total
Count
%
3
2
Count
%
3
2
Count
There is little difference between urban and rural banks with regard to banks’ rankings of the
effectiveness of financial education materials.
QIIH Figure 14. Advantages of Materials (non-weighted)
53 Banks Listed an Advantage(s)
Mentions
% of
Mentions
% of Banks
(Advantages)
Provides basic info, good learning tool
19
35.8%
35.8%
Ease of use, readily available
10
18.9%
18.9%
Reference or reinforcement tool
9
17.0%
17.0%
Broad outreach, cost effectiveness
6
11.3%
11.3%
Use of FDIC Tools
5
9.4%
9.4%
Other
4
7.5%
7.5%
Advantage
QIIH Figure 15. Disadvantages of Materials (non-weighted)
23 Banks Listed a Disadvantage(s)
Mentions
% of
Mentions
% of Banks
(Disadvantages)
Not personalized, no direct contact
6
26.1%
26.1%
High cost
5
21.7%
21.7%
Lack of interest, physical pick up
5
21.7%
21.7%
Low Effectiveness
4
17.4%
17.4%
Other
3
13.0%
13.0%
Disadvantage
Twenty-nine of 53 comments about the advantages of financial education materials mention either
the ability of these materials to provide information or their ease-of-use.
88
Education and Outreach Efforts
The disadvantages are evenly distributed across four main categories:
Not personalized and no direct contact
High costs associated
Lack of interest by customers/materials must physically be picked up
Questionable effectiveness of materials
Almost all (93.9 percent) banks rank targeted marketing as one of the top three most effective
programs. Targeted marketing was roughly half as likely to be ranked in the top five (1457/7440
from table QIIH figure 18) compared with outreach visits (2737/7440 from QIIH figure
10). Targeted marketing has the fewest first, second, and third place effectiveness rankings of any
program.
QIIH Figure 16. Targeted Marketing
Valid
Missing
1
Frequency
50
Weighted
Frequency
538
Weighted
Percent
37.0
2
38
417
28.7
3
43
412
28.3
4
1
14
.9
5
7
75
5.2
Total
139
1457
100.0
System
546
5983
685
7440
Total
QIIH Figure 17. Advantages of Target Marketing (non-weighted)
23 Banks Listed an Advantage(s)
Mentions
% of Mentions
% of Banks
(Advantages)
Ability to deliver a direct and specific message
12
48.0%
52.2%
Capture large audience within target areas
6
24.0%
26.1%
Other
5
20.0%
21.7%
Cost effectiveness
2
8.0%
8.7%
Mentions
% of Mentions
% of Banks
(Disadvantages)
Low success / effectiveness rate
10
40.0%
43.5%
No personal contact to educate customer thoroughly
7
28.0%
30.4%
Too costly
6
24.0%
26.1%
Other
2
8.0%
8.7%
Advantage
QIIH Figure 18. Disadvantages of Target Marketing (non-weighted)
23 Banks Listed a Disadvantage(s)
Disadvantages without rankings
Disadvantage
89
Education and Outreach Efforts
This program is the only instance in which the number of disadvantages (23) equals the number of
advantages (23).
The most commonly cited advantage of targeted marketing is the ability to deliver a direct and
specific message to a particular segment, which is mentioned in 12 of the 23 listed advantages.
Among the 8 percent of banks that rank another program, 100 percent rank it as one of the top
three most effective programs.
QIIH Figure 19. Other
Valid
Missing
1
Frequency
29
Weighted
Frequency
323
Weighted
Percent
55.6
13.2
2
8
76
3
17
181
31.3
Total
54
580
100.0
631
6859
685
7440
System
Total
QIIH Figure 20. Other Rankings (non-weighted)
54 Banks Ranked Other
Product/Program offerings
11
% of
Mentions
23.40%
Working within the community
11
23.40%
Advertising
8
17.02%
Direct Contact
7
14.89%
Referrals
5
10.64%
Website/Internet
4
8.51%
Have not evaluated yet
1
2.13%
Others, Specify Codes
Mentions
Twenty-nine of the 54 banks indicating “other” programs rank this category first. The “other”
category consists of seven different groups of responses:
Product/program offerings (11)
Working within the community (11)
Advertising (8)
Direct contact (7)
Referrals (5)
Website (4)
Have not evaluated (1)
Across these responses, the advantages and disadvantages do not refer to the same types of
programs, so no conclusions can be drawn for this category.
90
Education and Outreach Efforts
Question II I. Has your bank identified expanding services to unbanked and
underbanked individuals in your market area as a priority in your bank’s
business strategy?
Yes
No
Don’t know
While 17.5 percent of banks identify expanding services as a priority in the bank’s business strategy,
70.4 percent have not. About half (45.8 percent) of Tier 1 banks have identified it as a priority.
QII I Figure 1.
Valid
Have you identified expanding services in your market as a priority in your bank's business
strategy?
No
Yes
Frequency
448
Weighted
Frequency
5098
Weighted
Percent
70.4
131
1264
17.5
Don't Know
Total
Missing
88
882
12.2
667
7245
100.0
18
195
685
7440
System
Total
There are differences among regions for banks that are expanding services as a strategy. A larger
percentage of New England (23.0 percent) banks have identified it as a strategy compared with West
North Central banks (9.5 percent). However, more West South Central banks (22.0 percent) “don’t
know” compared with Mountain banks (3.4 percent).
QII I Figure 2.
Region
No
Have you identified expanding services in your market as a priority in your bank's business strategy?
East
West
East
West
New
MidSouth
South
South
North
North
England Atlantic
Atlantic
Central
Central
Central
Central
Mountain
Pacific
312
412
600
521
657
829
1036
405
328
Count
%
Yes
Count
%
Don't
Know
Count
%
Total
Count
%
70.1%
70.9%
69.8%
78.2%
58.7%
65.4%
77.4%
79.8%
71.0%
103
128
165
111
216
233
128
86
96
23.0%
22.0%
19.2%
16.6%
19.3%
18.4%
9.5%
16.9%
20.8%
31
41
95
34
246
205
174
17
38
6.9%
7.1%
11.0%
5.1%
22.0%
16.2%
13.0%
3.4%
8.2%
446
581
860
666
1119
1268
1338
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
91
Education and Outreach Efforts
There is a difference between tiers for banks that are expanding services as a strategy. A higher
percentage of Tier 2 banks (24.7 percent) than Tier 3 banks (16.8 percent) identify this as a business
strategy, and a higher percentage of Tier 2 banks (18.8 percent) indicate “Don’t Know” than Tier 3
banks (11.7 percent).
QII I Figure 3.
Tier
Have you identified expanding services in your
market as a priority in your bank's business
strategy?
Tier 1
No
Count
%
Yes
Count
%
Don't Know
11
Tier 2
302
Tier 3
4785
45.8%
56.5%
71.6%
11
132
1121
45.8%
24.7%
16.8%
Count
%
Total
Count
%
2
101
779
8.3%
18.8%
11.7%
25
534
6686
100.0%
100.0%
100.0%
There is no difference between urban and rural banks for banks that are expanding services as a
strategy.
Question II J. Has your bank conducted research on unbanked or
underbanked consumers in your CRA assessment area?
Yes
No
Don’t know
Over three-quarters (76.5 percent) of banks have not conducted research on the potential unbanked
customers in their CRA assessment areas.
QIIJ Figure 1.
Valid
Has your bank conducted research on the un/underbanked in your CRA area?
No
Yes
Missing
Total
Frequency
493
Weighted
Frequency
5603
Weighted
Percent
76.5
9.2
80
672
Don't Know
102
1048
14.3
Total
675
7323
100.0
10
116
685
7440
System
There are no differences among regions for banks that have conducted research.
There is no difference between tiers for banks that have conducted research.
There is no difference between urban and rural for banks that have conducted research.
92
Education and Outreach Efforts
Question II J-1. If yes, please summarize this research.
Though the majority of banks report that they perceive an un/underbanked population in their area,
only 9.2 percent of all banks have conducted their own research on unbanked and underbanked
consumers within their CRA assessment areas. Banks report that they rely on Census data and other
third-party research on market demographics and needs. A common reason for not performing
formal research is that banks perceive that the unbanked and underbanked population in their area is
too small to warrant such an effort.
Of the banks that have conducted research, approaches include: focus groups, surveys, community
visits, and hiring of third-party organizations to complete the research on the bank’s behalf.
Through these different forms of research, some common observations of the population include:
Many unbanked individuals do not use financial institutions because they do not have valid
Individual Tax Payer Identification Numbers (ITIN) or Social Security Numbers (SSN).
There is a need for bilingual information that is written in a manner which the population can
understand.
Branches need to be conveniently located near the populations’ LMI area in order to bring them
into the banking mainstream.
One bank’s research found the following data:
“Our primary focus over the past two years has been on the Hispanic community. Research
and data gathering have been conducted through the use of the most recent Census data. The
population growth of the Hispanic community can be readily seen in the demographic data that
may, in fact, be an under-representation of the community's true size. Additionally, two focus
groups within the Hispanic community, one with community leaders and the other with
community members were conducted to assess the needs from the community's perspective.
Nationally, Census figures comparing population growth during the first six years of this decade
provide a valuable snapshot. Hispanics are the largest minority group with an estimated national
population of 44.3 million people. During this six-year time frame, Hispanic populations grew
in every state in the nation, usually outpacing the growth of all other groups. An examination of
national population growth from 2005 to 2006 reveals that Hispanics accounted for almost half
of the nation's growth during that period. The projected Hispanic population of the U.S. as of
July 1, 2050, is 102.6 million. According to this projection, Hispanics will constitute 24 percent
of the nation's total population by that date. One out of ten small businesses in the U.S. is
Hispanic owned. The latest Census figures show that the rate of growth of Hispanic-owned
businesses is triple the rate of the national average for all businesses. In [our state], the Hispanic
population grew at 48 percent, easily outpacing all others. The PEW Institute estimates that the
state's population will be 12 percent by 2015. The top three nationalities in the state are
Mexicans (17.5 percent), Salvadoran (15 percent) and Puerto Rican (11 percent). There are in
excess of 15,300 Hispanic-owned businesses in [our state], representing 3.5 percent of the total
in the state. Nearly 7 percent of [our state’s] Hispanic population are business owners, reflecting
a very entrepreneurial spirit. Demographic and Census tract data have been gathered to support
recommendations from a geographic focus. Data have been gathered within a seven-mile radius
of all bank retail and small consumer loans branches as of October 2007. In addition, we have
partnered with a CRM Marketing firm, to conduct a Customer Ethnicity Analysis of our
customer base in an effort to establish a baseline for measuring and tracking success of our
efforts on a go-forward basis in serving the unbanked and underbanked populations.”
93
Education and Outreach Efforts
Another example of a bank that conducted their own research found the following:
“Demographic research and geo-coded maps of our assessment areas allow us to contact the
nonprofits within those areas to develop working relationships. This research also allowed us to
determine the primary language spoken within our assessment areas to determine where
bilingual associates are needed the most and allows us to distribute Spanish and English
brochures to the branches where they are needed. We also have conducted research that proved
we should extend our business hours to 7:30 p.m. and extend our work week to either 6 or 7
days depending on the location to better serve the individuals within our assessment areas.
Research says educated immigrants, middle-income individuals with poor credit histories, and
military personnel or others who lead a transitory lifestyle are among the underbanked living in
households with less than $40,000 a year in income. The study also says the average unbanked
person generally earns less than $25,000 annually, is likely to be someone new in the country, a
young person, single, minority or an individual with low level education. Hispanics and AfricanAmericans account for a large percentage of the unbanked and overall, the group is slightly
more female than male. They feel they do not have enough money to justify the fees they are
charged. They have loans originated elsewhere and use credit cards or have life insurance. They
are more likely to rent than to own a home, more likely to use prepaid cellular plans, and more
likely to purchase used vehicles and choose a used car dealer based on financing options. They
think banks are too expensive and are uncomfortable with social aspects of banking. They are
concerned about maintaining minimum balances and the privacy of their financial information.
There may be language barriers, and immigration issues. Many were raised in a cash-based
culture and have little or no knowledge of how a financial institution works. Many generally do
not have a deposit account and turn to check cashing establishments, retail stores, and other
alternative financial services to transact business.”
Another bank conducted a survey regarding Money Services Business (MSBs) operating in its
assessment area.
“At least 35 percent of MSB customers are existing banking customers: 1) The higher the
poverty level, the higher the percentage of MSB within the area. 2) The higher the percentage of
unbanked population translates into a higher percentage of MSBs within the assessment area.
3) Contrary to popular belief, many MSBs offer very cheap check cashing services. Our survey
found many in the rural areas with higher poverty rates offered check cashing for no fee. 4)
MSBs have pointed out to the Bank the fact that cashing a $200 check is cheaper at many MSBs
than cashing a check at Bank if the customer has no bank account. 5) Payday lenders point to
the fact that giving a customer a $200 pay loan costs the consumer less than if the customer had
two overdrafts totaling $200 (and in some banks it is cheaper than one $200 overdraft item. 6)
In our rural areas the number one reason for declining a new depository customer is the lack of
a tax payer identification number (regarding under various BSA laws).”
A bank’s study on the underbanked found the following information:
“There are approximately 40 million underbanked households, and these households have a
diversity of financial services needs, attitudes, and behaviors. According to research conducted,
70 percent of people in low and moderate income Census tracks have bank accounts, but twothirds of these households are heavy users of nonbank financial services (e.g., consumers obtain
money orders, send remittances, and cash checks outside of traditional banks). Of the 30
percent of households without bank accounts, at least half have had bank accounts in the past
and 25 percent cash checks in banks.”
94
Education and Outreach Efforts
Activities to Bring the Un/Underbanked into the
Financial Mainstream
Question II K. What are three activities that banks could do, in general,
that would be most effective in bringing unbanked individuals and families
into the conventional banking system?
Survey respondents suggest a total of 1,336 comments about a range of activities that could be
effective in bringing unbanked individuals into the mainstream banking system. The numbers
presented for this question are not weighted since they come from qualitative responses. Banks’
open-end responses are distributed across eight major groupings:
Outreach Efforts
Products and Services
Educational Programs and Materials
Targeted Marketing
External Barriers and Challenges
Distribution Channels
Internal Activities and Initiatives
Non-Responses
Four categories account for 1,182 of recommended activities. Of these, 27 percent are outreach
efforts, 21 percent are products and services, 21 percent are educational programs and materials, and
15 percent are for targeted marketing. The concentration of responses in these categories
demonstrates a strong emphasis on raising awareness and building presence in communities with
unbanked and underbanked populations.
Outreach Efforts
Respondents most often recommend that banks engage in outreach efforts to the unbanked and
underbanked, which reflect many of the same strategies specified in the survey. Of the 357
responses in this category, 74 suggest outreach efforts in general without designating a particular
type of program or strategy, while 283 specifically suggest outreach in collaboration with a third
party.
Third parties represent places or resources frequented by unbanked and underbanked individuals.
By leveraging these organizations’ rapport and trust within the community and developing outreach
programs that reflect their understanding of the market’s needs, banks can more effectively inform
and serve unbanked individuals. Collaboration with community organizations, such as nonprofit
organizations, religious groups, and cultural associations, was most commonly cited, accounting for
27 percent of responses in this category. Other suggestions for outreach with third parties include
partnerships with local employers to develop workplace programs focused on unbanked and
underbanked employees (22 percent), youth outreach through public schools (21 percent), and
collaboration with government assistance agencies, including social services and housing authorities
(10 percent).
95
Education and Outreach Efforts
Products and Services
Recommendations with regard to products and services offered to the unbanked and underbanked
are the second most common observation, totaling 283. Within this category, 85 suggest providing
affordable offerings to attract and accommodate this segment. More specifically, affordable offerings
include free or low-cost products, no or low opening deposits, no or low minimum balances to
maintain accounts, no or low service charges, and small dollar loans. By removing or lowering fees
and minimums that may deter or prevent account opening, banks can create more opportunities to
establish customer relationships with unbanked individuals.
Responses suggesting that banks offer “targeted products” without noting a particular type or
feature of a product accounted for 27 percent of activities in this category. Although this general
response provides less insight than more specific suggestions, it demonstrates that some banks
perceive developing and offering niche products as a way to serve the unbanked and underbanked.
The remainder of responses in this category cover a range of products, services, and related
activities. Providing services such as check cashing and wire transfers, which are typically offered by
alternative providers, are suggested in 11 percent of responses. By directly competing against
providers who conduct a significant portion, if not a majority, of financial transactions for the
unbanked and underbanked and offering identical services at a lower cost, financial institutions
could increase market share and improve their ability to transition customers to deposit accounts.
Other suggested products and services include payroll or prepaid cards (10 percent), entry-level or
“rebuilder” accounts with restrictions on access or activity (6 percent), promotion of direct deposit
(4 percent), and individual development accounts (1.4 percent). Banks also suggest alternative
strategies in relation to offerings. Modifying banks’ criteria for account opening, such as accepting
lower credit scores, prospective customers with a ChexSystems history, and non-traditional forms of
identification, account for 8 percent of responses, while 3.9 percent recommend offering incentives
to entice account opening.
Educational Programs and Materials
Overall, activities involving educational components account for 21 percent of the comments.
Education provided in sessions, workshops, courses, and training account for an overwhelming 91
percent of these activities. Respondents convey the importance of personal finance education in
providing unbanked individuals with the requisite knowledge and understanding to handle and
benefit from banking products and services. This emphasis on education also highlights the need for
educational services and its integral role in establishing banking relationships with unbanked and
underbanked populations.
Other responses (9 percent) in this category recommend providing education through materials,
including brochures, literature, and websites, rather than interactive, in-person programs. Written
educational materials allow banks to provide information more widely at a lower cost than
conducting sessions, which may explain why a small portion of respondents prefer this approach.
96
Education and Outreach Efforts
Targeted Marketing
Marketing efforts are suggested in 15 percent of overall responses as an effective approach to
bringing the unbanked and underbanked into the mainstream banking system. The vast majority (84
percent) of recommended activities within this category relate to targeted marketing, such as
advertisements in local newspapers, ethnic publications, participation in community events, direct
mail to underserved households, and TV and radio commercials. Targeted marketing through
various media enables banks to gain wider visibility and exposure to specific communities and allow
institutions to tailor their efforts to the needs and characteristics of intended audiences.
Additionally, 12 percent of these comments focus on conducting and using research on the
unbanked and underbanked market, such as through focus groups and Census data, to identify and
improve banks’ understanding of the underbanked population in their service areas. Market research
not only facilitates more effective marketing but also informs the development of programs and
offerings that serve specific needs of the unbanked community. The remaining 5 percent of
responses cite word-of-mouth advertising, particularly customer referrals, as a valuable strategy for
attracting customers from unbanked populations.
Reduce External Barriers and Challenges
Banks report that in their efforts to serve the unbanked and underbanked they often face barriers
and challenges that inhibit their ability to bring unbanked and underbanked individuals into
branches and the conventional banking system. Activities that seek to tackle these obstacles
comprise 8 percent of overall responses.
Banks located in service areas with sizeable immigrant communities report that they must often
overcome the initial barrier of language and cultural differences. Within the general category, 71
percent of responses focus specifically on addressing this obstacle. Respondents recommend three
main approaches: hiring bilingual staff to facilitate communication and relation to immigrant
customers (49 percent), providing educational and marketing materials in foreign languages (19
percent), and improving cultural awareness and understanding among bank employees to ensure that
immigrant customers are treated respectfully and with sensitivity to their cultural background (3
percent).
Respondents also note other ways in which banks can overcome obstacles to serving the unbanked
and underbanked. Modification of government regulations, such as the Bank Secrecy Act and the
Patriot Act, is cited in 13 percent of responses as a helpful measure in improving banks’ ability to
serve unbanked and underbanked individuals. Another 11 percent of responses emphasize the
importance of building trust in the banking system so that individuals not only understand how
financial products work but also feel comfortable and secure banking with mainstream financial
institutions. Changing individuals’ preconceived notions of financial institutions is a common issue
banks face when serving unbanked populations. An additional 5 percent of responses focus on
obtaining assistance from governments or other third-party organizations for funding or liability
coverage to reduce risk. For banks, serving the unbanked and underbanked typically yields a lower
return on investment than that associated with mainstream customers. In addition to the costs of
marketing, publishing and distributing materials, and conducting outreach visits and education
sessions, unbanked and underbanked customers often carry lower balances and exhibit higher rates
of closure and default than their mainstream counterparts according to responses. Banks indicate
that providing assistance in this regard could encourage banks to further their efforts.
97
Education and Outreach Efforts
Distribution Channels
Approaches to improving and expanding distribution channels are cited in 4 percent of responses as
an effective way to serve the unbanked and underbanked. Responses in this category delineate
different approaches to developing more convenient, accessible, and comfortable channels to offer
banking services to this population.
Providing a wider range of banking options is suggested in 48 percent of responses. Possible
strategies to accommodate unbanked individuals include extending hours at branch locations,
offering mobile and online banking services, deploying ATMs in areas frequented by the population,
and providing services at alternative off-premise locations, such as in shopping centers or grocery
stores, rather than in traditional bank offices. Constructing branches in low- to moderate-income
areas is suggested in 22 percent of responses in this category. By establishing a physical presence in
the community, banks could improve visibility and exposure to the unbanked and underbanked
population and create better opportunities for outreach to the community.
Two other recommended activities, each accounting for 15 percent of responses, address the
challenge of making unbanked individuals feel comfortable entering and transacting business in a
bank branch. Offering branch-based programs, such as an open house, is one such activity.
Unbanked individuals are invited to the bank and are provided information about various bank
programs, helping to alleviate anxieties or concerns about financial institutions. Banks also cite
reconfiguring physical aspects of branches to create a more casual and welcoming environment as a
way to help unbanked individuals feel at ease in bank settings.
Internal Activities and Initiatives
A small percentage (3 percent) of responses involve internal activities to improve banks’
effectiveness in serving the unbanked and underbanked. Three-quarters (75 percent) of activities
suggested in this category focus on customer service, either by training or encouraging bank
employees to treat unbanked individuals respectfully and sensitively or by engaging in individual
contact with unbanked customers through phone calls, one-on-one counseling, or personal visits.
These customer service-oriented activities can help unbanked individuals develop a more personal
connection with the institution and feel comfortable when engaging with bank employees.
Other suggested internal activities include implementing a corporate initiative that establishes
organization-wide goals for serving this segment (15 percent) and training bank employees to
identify needs of the unbanked and underbanked in order to effectively cross-sell products that are
relevant and beneficial to these customers (10 percent).
Non-Responses
This question yielded a total of 16 non-responses. Of these non-responses, 13 either indicate “do
not know” or “not applicable” because the bank did not perceive there to be an unbanked
population in their service area. The remaining three responses indicate that no recommendations
were made because the bank believes that individuals are unbanked by choice, negating any reason
to provide strategies for bringing them into the conventional banking system.
98
Education and Outreach Efforts
Challenges in Serving or Targeting
Un/Underbanked Populations
Question II L. What challenges does your organization face in serving or
targeting unbanked and underbanked individuals? Please rank order by
importance, where 1 = greatest challenge, 2 = second greatest challenge,
etc.
___ Profitability Issues
___ Competition from Alternative Service Providers
___ Unfamiliar with this Population
___ High Cost of Customer Acquisition
___ Internal Challenges
___ Regulatory Barriers Related to Customer Identification
___ Fraud Concerns
___ Other
The greatest challenges to banks are profitability issues and regulatory barriers, which are closely
followed by fraud concerns, high cost of customer acquisition, and competition from alternative
service providers. Lower ranking but still important issues are unfamiliarity with the population,
internal challenges, and “other” considerations.
QIIL Figure 1.
Greatest Challenges in Serving or Targeting Un/underbanked Populations (calculated
ranking based on reverse scoring)
Ranking
Programs
1
Profitability Issues
2
Regulatory Barriers
3
Fraud Concerns
4
High Cost of Customer Acquisition
5
Competition from Alternative Service
Providers
6
Unfamiliarity with this Population
7
Internal Challenges
8
Other Challenges
99
Education and Outreach Efforts
QIIL Figure 2. Statistics
Competition
from
Alternative Unfamiliar High Cost of
Profitability
Service
with this
Customer
Internal Regulatory
Fraud
Providers
Population Acquisition Challenges Barriers
Issues
Concerns Other
5134
4214
3763
4169
3695
4888
4849 1157
Weighted
N
Valid
Missing
2306
3226
3677
3271
3744
2552
2590
6283
Mean
2.77
3.57
3.95
3.28
4.18
2.66
2.89
1.65
Median
2.00
3.00
3.00
3.00
4.00
2.00
2.00
1.00
Mode
1
1
1
2
4
1
1
1
Minimum
1
1
1
1
1
1
1
1
Maximum
8
8
8
8
8
8
7
8
QIIL Figure 4.
QIIL Figure 3.
Profitability issues
Ranking
Valid
1
2
3
Weighted Weighted
Frequency Frequency Percent
158
1730
33.7
105
68
1105
688
Competition from alternative
service providers
Ranking
Valid
1
Weighted Weighted
Frequency Frequency Percent
90
933
22.1
21.5
2
72
806
19.1
13.4
3
63
683
16.2
32
290
6.9
4
66
726
14.1
4
5
37
348
6.8
5
41
372
8.8
48
531
12.6
6
29
254
4.9
6
7
22
240
4.7
7
55
541
12.8
.9
8
5
58
1.4
100.0
8
4
44
Total
489
5134
406
4214
Missing System
196
2306
Missing System
279
3226
Total
685
7440
Total
685
7440
Total
100.0
100
Education and Outreach Efforts
QIIL Figure 5.
Unfamiliar with this Population
QIIL Figure 8.
Weighted Weighted
Frequency Frequency Percent
72
808
21.5
Ranking
Valid
1
2
52
3
53
4
33
5
19
14.8
2
110
1204
24.6
551
14.6
3
59
605
12.4
319
8.5
4
26
236
4.8
173
4.6
5
45
414
8.5
34
309
6.3
29
261
5.3
558
46
451
12.0
6
7
81
789
21.0
7
8
Total
Missing System
Total
12
113
3.0
368
3763
100.0
317
3677
7440
685
95
3
79
4
53
31
.6
4888
100.0
Missing System
215
2552
Total
685
7440
QIIL Figure 9.
Weighted Weighted
Frequency Frequency Percent
61
620
14.9
2
3
470
Total
QIIL Figure 6. High Cost of Customer Acquisition
Ranking
Valid
1
Weighted Weighted
Frequency Frequency Percent
164
1827
37.4
Ranking
Valid
1
6
8
Regulatory Barriers
Fraud Concerns
Ranking
Valid
1
Weighted Weighted
Frequency Frequency Percent
118
1297
26.8
24.4
2
109
1174
24.2
863
20.7
3
76
756
15.6
567
13.6
4
58
589
12.1
1018
5
60
578
13.9
5
53
597
12.3
6
46
405
9.7
6
31
301
6.2
7
11
110
2.6
7
20
134
2.8
100.0
8
2
7
.2
407
4169
100.0
Missing System
278
3271
Total
685
7440
Total
QIIL Figure 7.
Total
4849
220
2590
Total
685
7440
QIIL Figure 10. Other
Internal Challenges
Ranking
Valid
1
465
Missing System
Weighted Weighted
Frequency Frequency Percent
30
318
8.6
Ranking
Valid
1
Weighted Weighted
Frequency Frequency Percent
65
761
65.8
2
52
548
14.8
2
19
206
17.8
3
58
574
15.5
3
12
121
10.4
18.2
4
4
34
3.0
1
14
1.2
3
21
1.8
100.0
4
72
674
5
46
476
12.9
5
6
51
519
14.0
8
Total
7
53
559
15.1
8
2
27
.7
364
3695
100.0
Missing System
321
3744
Total
685
7440
Total
101
104
1157
Missing System
581
6283
Total
685
7440
Education and Outreach Efforts
Of the 104 banks that rank “other,” 101 banks elaborate on the challenges their organizations face
while serving the un/underbanked population, mentioning a total of 109 challenges. Using a reverse
scoring system, the following challenges are listed in order of importance: difficulty identifying and
communicating with this population, lack of bank resources and product offerings, uneducated
population or feel as though they do not want/need a bank, not a retail-based bank or not focused
on this population, ability of population to handle account or bad financial history, and cultural or
language barriers.
Question II M. Does your bank perceive any regulatory impediments to
providing/developing specialized products and services for unbanked or
underbanked consumers?
Yes
No
Regulatory issues are perceived by 39.6 percent of banks as impeding their ability to provide
products and services to the un/underbanked population.
QIIM Figure 1. Does your bank perceive any regulatory impediments to provide products and services?
Valid
Frequency
373
Weighted
Frequency
4173
Yes
270
2736
39.6
Total
643
6909
100.0
42
531
685
7440
No
Missing
System
Total
Weighted
Percent
60.4
There are differences among regions for banks that perceive regulatory impediments. More than
one-half (54.5 percent) of banks in the Pacific region and 54.6 percent in New England perceive
impediments, compared to 28.0 percent in the East South Central and 33.9 percent in the West
North Central regions.
QIIM Figure 2. Region
No
Count
%
Yes
Count
%
Total
Count
%
Does your bank perceive any regulatory impediments to provide products and services?
East
West
East
West
South
South
North
North
New
MidSouth
England
Atlantic
Atlantic
Central
Central
Central
Central Mountain
Pacific
196
341
513
459
578
743
859
281
202
45.4%
63.4%
66.0%
72.0%
52.1%
64.0%
66.1%
55.3%
236
197
265
179
531
418
441
227
45.5%
242
54.6%
36.6%
34.0%
28.0%
47.9%
36.0%
33.9%
44.7%
54.5%
432
539
778
638
1109
1162
1300
507
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
102
Education and Outreach Efforts
There is a difference between tiers for banks that perceive regulatory impediments. Over half (51.3
percent) of Tier 2 banks perceive a regulatory impediment, compared with 38.6 percent of banks in
Tier 3.
QIIM Figure 3. Tier
Does your bank perceive any regulatory
impediments to provide products and services?
1
No
%
Yes
13
264
3897
48.7%
61.4%
11
277
2447
47.8%
51.3%
38.6%
24
541
6344
100.0%
100.0%
100.0%
Count
%
3
52.2%
Count
%
Total
2
Count
There is a difference between urban and rural banks for banks that perceive regulatory impediments
to providing services for the un/underbanked. About half (44.4 percent) of urban banks perceive
regulatory impediments, compared with 35.3 percent of rural banks.
QIIM Figure 4. Urban/Rural
Does your bank perceive any
regulatory impediments to
provide products and services?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
2366
Urban HQ
1807
64.7%
55.6%
1293
1444
35.3%
44.4%
3659
3250
100.0%
100.0%
Question II M-1. If yes, please describe.
Of the 270 banks that identify regulatory impediments to providing specialized products and
services to un/underbanked consumers, a number of banks report concerns related to maintaining
compliance with the Patriot Act and Bank Secrecy Act (BSA).
About three-quarters (196) of the banks state that obtaining sufficient identification information
from non-customers to satisfy the Customer Identification Program (CIP), Know Your
Customer (KYC), and Patriot Act regulations is a major challenge.
The second most frequently mentioned topic of concern is compliance with the Bank Secrecy
Act (BSA) and Anti-Money Laundering (AML), which is reported by 83 banks.
Additionally, 30 banks feel that there are high risks and costs associated with serving this
population in light of the need to comply with numerous regulations.
103
Education and Outreach Efforts
104
Education and Outreach Efforts
Chapter
5
Retail Branch Operations
This chapter addresses changes that banks have made in retail branch operations to better serve
their customers. This includes the extension of branch hours, addition of bilingual employees,
modifications in branch design, and strategies for serving unbanked and underbanked individuals.
These areas include:
Bank Hours
Languages
Modification in Retail Operations
Branch Strategies
This section of the report explores aspects of the Congressional Question 4 and provides data on banks’ efforts to be
more accessible and to reduce obstacles that may prevent unbanked individuals from establishing conventional accounts.
Summary
Banks report that they have modified their retail branch operations in a variety of ways but do not
always indicate that the changes were solely intended to increase access for unbanked and/or
underbanked consumers.
Extended Hours: A majority of banks (59 percent) have extended their branch hours for
traditional “brick and mortar” branches, retail branches, and limited service branches, with the most
common time being weekday evenings after 5:00 p.m. Of banks that have extended hours, 82
percent have expanded their hours past 5:00 p.m. on weekdays, compared with 16 percent offering
Saturday hours after 1:00 p.m.
More Languages: Bank branch staff speak a variety of languages that may facilitate access to bank
facilities for non-native English-speaking un/underbanked individuals. After English, Spanish is the
most commonly spoken language in bank branches. Forty-seven percent (47 percent) of banks
employ staff that speak Spanish, followed by Chinese (4 percent), Vietnamese (3 percent), Tagalog
(2 percent), and Korean (2 percent).
105
Retail Branch Operations
Modifications to Retail Operations: Nearly two-thirds (64 percent) of banks have modified their
operations to make them more welcoming or convenient for unbanked and/or underbanked
individuals to take advantage of their services. These modifications to increase access include
external ATMs (47 percent), off-premise ATMs (43 percent), and Internet or mobile banking (73
percent). Only 13 percent of banks have added non-traditional locations. Seventeen percent (17
percent) have utilized innovative branch designs, and 20 percent have added branches in LMI areas.
Branch Strategies: In addition to physical changes in branch operations, banks have also increased
their efforts by providing check cashing (49 percent) and money orders (41 percent) as part of their
strategy to serve the unbanked and/or underbanked in their market areas.
Bank Hours
The majority (59 percent) of banks offer extended branch hours, typically after 5:00 p.m. on
weekdays and after 1:00 p.m. on Saturdays. Some banks operate offices on Sundays.
Proportionately, more Tier 1 banks offer extended bank office hours than Tier 2 or Tier 3 banks.
Question III A. Does your bank offer extended, non-traditional evening
and/or weekend hours at any of your bank’s locations?
Yes
No
QIIIA. Figure 1. Does your bank offer extended hours?
Valid
Frequency
241
Weighted
Frequency
3030
Yes
440
4366
59.0
Total
681
7395
100.0
4
44
685
7440
No
Missing
System
Total
Weighted
Percent
41.0
There are some differences among banks that offer extended hours across geographic areas.
Specifically, 81.2 percent of banks in the Mid-Atlantic region are open for extended hours,
compared to banks in the Mountain (46.7 percent), East South Central (47.9 percent), South Atlantic
(51.0 percent), West North Central (55.6 percent), and Pacific (48.8 percent) regions
QIIIA. Figure 2. Region
No
Count
%
Yes
Count
%
Total
Count
%
Does your bank offer extended hours?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
421
349
444
417
626
New
England
164
Mid
Atlantic
109
36.8%
18.8%
49.0%
52.1%
37.9%
32.0%
282
471
439
320
729
885
63.2%
81.2%
51.0%
47.9%
62.1%
446
581
860
669
1174
100.0%
100.0%
100.0%
100.0%
100.0%
106
Mountain
270
Pacific
229
44.4%
53.3%
51.2%
784
237
218
68.0%
55.6%
46.7%
48.8%
1302
1410
507
448
100.0%
100.0%
100.0%
100.0%
Retail Branch Operations
There also appear to be differences in extended hours by bank size. All banks in Tier 1 offer
extended hours but slightly less than 57 percent of Tier 3 banks offer extended hours.
QIIIA. Figure 3. Tiers
Does your bank offer extended hours?
Tier 1
No
0
90
Tier 3
2939
.0%
16.5%
43.1%
25
458
3883
100.0%
83.5%
56.9%
25
548
6822
100.0%
100.0%
100.0%
Count
%
Yes
Count
%
Total
Count
%
Tier 2
There is a minimal difference between urban (60.1 percent) and rural banks (58.1 percent) in their
offering of extended banking hours.
Question III A. If yes, check all that apply, and indicate typical hours:
Extended
Weekday Evening
Hours (After 5 pm)
Saturday
Afternoon Hours
(After 1 pm)
Sunday Hours
Full Service Brick and
Mortar Branches
Until ___ pm
Until ___ pm
Hours ___ to ____
Full Service Retail (Instore) Branches
Until ___ pm
Until ___ pm
Hours ___ to ____
Limited Service
Branches
Until ___ pm
Until ___ pm
Hours ___ to _____
Branch Type
107
Retail Branch Operations
Of banks that have extended their banking hours, the most commonly extended time for all types of
branches is after 5:00 p.m. on weekday evenings. Only about 16 percent of banks have full service
branches open on Saturdays after 1:00 p.m. Banks provide extended hours for 16 percent of in-store
branches on weekdays after 5:00 p.m., 12 percent on Saturdays after 1:00 p.m., and 5 percent on
Sundays.
QIIIA. Figure 1. Percent of Banks Offering Extended Hours by Branch Type
Extended Weekday
Evening Hours
(After 5 pm)
Saturday
Afternoon Hours
(After 1 pm)
Sunday Hours
Full Service Brick and Mortar
Branches
81.2%
15.6%
4.7%
Full Service Retail (In-store)
Branches
16.1%
11.9%
5.1%
Limited Service Branches
23.1%
5.2%
0.3%
Branch Type
QIIIA. Figure 2. Brick and Mortar Weekday Evening
Valid
No
QIIIA. Figure 4. Brick and Mortar Sunday
Weighted Weighted
Frequency Frequency Percent
73
835
18.8
Valid
No
Weighted Weighted
Frequency Frequency Percent
399
4158
95.3
Yes
372
3611
81.2
Yes
40
206
4.7
Total
445
4447
100.0
Total
439
4365
100.0
Missing System
240
2993
Missing System
246
3075
Total
685
7440
Total
685
7440
QIIIA. Figure 3. Brick and Mortar Saturday
Valid
No
Weighted Weighted
Frequency Frequency Percent
332
3685
84.4
Yes
107
679
15.6
Total
439
4365
100.0
Missing System
246
3075
Total
685
7440
108
Retail Branch Operations
The percentage of banks that have brick and mortar branches open weekday evenings, Saturdays,
and Sundays appears to be different across regions. For example, the East South Central (16.0
percent open past 1:00 p.m. on Saturday and 0.0 percent open on Sundays) and West North Central
(3.2 percent open on Saturday after 1:00 p.m. and 0.4 percent on Sundays) are open less than the
Mid-Atlantic region (30.3 percent open on Saturdays after 1:00 p.m. and 15.9 percent on Sundays).
QIIIA. Figure 5. Region: Brick and Mortar Weekday Evening
No
Count
%
Yes
Count
%
Total
Count
%
Brick and Mortar Weekday Evening
East
West
East
West
South
South
South
North
North
Central
Central
Central
Central
Atlantic
21
93
257
151
168
New
England
41
MidAtlantic
42
13.9%
8.9%
4.7%
28.0%
34.5%
16.9%
254
429
417
241
486
747
86.1%
91.1%
95.3%
72.0%
65.5%
83.1%
Mountain
17
Pacific
46
21.4%
6.8%
19.6%
617
234
187
78.6%
93.2%
80.4%
295
471
438
334
743
898
784
251
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIIIA. Figure 6. Region: Brick and Mortar Saturday
No
Count
%
Yes
Count
%
Total
Count
%
Brick and Mortar Saturday
East
West
East
South
South
North
Central
Central
Central
269
677
676
West
North
Central
759
Mountain
181
Pacific
157
76.4%
96.8%
72.2%
71.7%
209
25
70
62
5.3%
23.6%
3.2%
27.8%
28.3%
715
885
784
251
218
100.0%
100.0%
100.0%
100.0%
100.0%
Brick and Mortar Sunday
East
West
East
South
South
North
Central
Central
Central
320
712
838
West
North
Central
781
Mountain
233
Pacific
181
99.6%
98.1%
82.7%
New
England
243
MidAtlantic
329
South
Atlantic
395
86.2%
69.7%
90.2%
84.0%
94.7%
39
143
43
51
38
13.8%
30.3%
9.8%
16.0%
282
471
438
320
100.0%
100.0%
100.0%
100.0%
QIIIA. Figure 7. Region: Brick and Mortar Sunday
No
Count
%
Yes
Count
%
Total
Count
%
New
England
263
MidAtlantic
396
South
Atlantic
434
93.5%
84.1%
99.2%
100.0%
97.6%
94.8%
18
75
3
0
17
46
3
5
38
6.5%
15.9%
.8%
.0%
2.4%
5.2%
.4%
1.9%
17.3%
282
471
438
320
729
885
784
237
218
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
109
Retail Branch Operations
A greater percentage of larger banks’ brick and mortar branches appear to have extended hours on
Saturdays, and are open Sundays than smaller banks’. Over two-thirds (69.6 percent) of Tier 1 banks
have branches that are open after 1:00 p.m. on Saturdays and 43.5 percent are open on Sundays. For
Tier 2, 43.2 percent are open past 1:00 p.m. on Saturdays and 15.9 percent are open on Sundays. For
Tier 3, 12.0 percent are open past 1:00 p.m. on Saturdays and 3.2 percent are open on Sundays.
QIIIA. Figure 8. Tier
Tier
No
Count
1
2
3
Brick and
Brick and
Brick and
Mortar Brick and Brick and
Mortar Brick and Brick and
Mortar Brick and Brick and
Weekday Mortar
Mortar
Weekday Mortar
Mortar
Weekday Mortar
Mortar
Evening Saturday Sunday
Evening Saturday Sunday
Evening Saturday Sunday
4
7
14
38
260
385
793
3418
3760
%
Yes
Count
%
Total Count
%
17.4%
30.4%
56.5%
8.3%
56.8%
84.1%
20.0%
88.0%
96.8%
20
17
10
420
198
73
3172
465
123
82.6%
69.6%
43.5%
91.7%
43.2%
15.9%
80.0%
12.0%
3.2%
24
24
24
458
458
458
3965
3883
3883
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There do not appear to be any differences in extended operating hours at brick and mortar branches
between urban and rural banks.
Few (16.1 percent) of the responding banks have retail branches that are open on weekday evenings.
Fewer banks have retail branches open on Saturdays after 1:00 p.m. (11.9 percent) and Sundays (5.1
percent).
QIIIA. Figure 9. Retail Weekday Evening
Valid
No
QIIIA. Figure 11.
Weighted Weighted
Frequency Frequency Percent
333
3663
83.9
Valid
No
Retail Sunday
Weighted
Frequency Frequency
391
4140
Weighted
Percent
94.9
Yes
106
701
16.1
Yes
48
224
5.1
Total
439
4365
100.0
Total
439
4365
100.0
Missing System
246
3075
Missing System
246
3075
Total
685
7440
Total
685
7440
QIIIA. Figure 10.
Valid
No
Retail Saturday
Weighted
Frequency Frequency
351
3846
Weighted
Percent
88.1
Yes
88
519
11.9
Total
439
4365
100.0
Missing System
246
3075
Total
685
7440
110
Retail Branch Operations
Retail branch extended hours appear to be similar across regions, except for Sundays. No banks in
the East South Central region report that they are open on Sundays, while 14.7 percent of Pacific
banks report that they are open on Sundays.
QIIIA. Figure 12.
No
Count
New
England
Retail
Sunday
277
MidAtlantic
Retail
Sunday
410
South
Atlantic
Retail
Sunday
435
East
South
Central
Retail
Sunday
320
West
South
Central
Retail
Sunday
715
East
North
Central
Retail
Sunday
814
West
North
Central
Retail
Sunday
759
Mountain
Retail
Sunday
223
Pacific
Retail
Sunday
186
98.4%
87.0%
99.3%
100.0%
98.1%
92.0%
96.8%
94.2%
85.3%
5
61
3
0
14
71
25
14
32
1.6%
13.0%
.7%
.0%
1.9%
8.0%
3.2%
5.8%
14.7%
%
Yes
Count
%
Total
Region
Count
%
282
471
438
320
729
885
784
237
218
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Consistent with the other differences for extended hours at retail branches on weekday evenings,
Saturdays after 1:00 p.m., and Sundays, the percentage of Tier 1 banks offering extended retail hours
is twice that of Tier 2 and more than nine times the percentage of Tier 3 banks offering extended
hours on Saturdays.
QIIIA. Figure 13.
Tier
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Retail
Weekday
Evening
5
Retail
Saturday
6
21.7%
26.1%
Tier 2
Retail
Sunday
9
Retail
Weekday
Evening
281
Retail
Saturday
298
39.1%
61.4%
65.2%
Tier 3
Retail
Sunday
371
Retail
Weekday
Evening
3377
Retail
Saturday
3541
Retail
Sunday
3760
81.1%
87.0%
91.2%
96.8%
19
18
15
177
160
87
506
342
123
78.3%
73.9%
60.9%
38.6%
34.8%
18.9%
13.0%
8.8%
3.2%
24
24
24
458
458
458
3883
3883
3883
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Minimal differences are evident between urban and rural banks for extended banking hours on
weekday evenings, Saturdays after 1:00 p.m., and Sundays.
111
Retail Branch Operations
About a quarter (23.1 percent) of banks have extended hours for limited service branches on
weekday evenings after 5:00 p.m. Very few banks have extended hours for limited service branches
for Saturday and Sunday hours (5.2 percent and 0.3 percent, respectively). This may likely be
explained by the fact that few banks operate limited service branches.
QIIIA. Figure 14.
Valid
Limited Service Weekday
Evening
Weighted
Frequency Frequency
337
3357
No
QIIIA. Figure 16.
Weighted
Percent
76.9
Valid
Weighted
Frequency Frequency
434
4339
No
Yes
102
1008
23.1
Yes
Total
439
4365
100.0
Total
Missing System
246
3075
Missing System
Total
685
7440
Total
QIIIA. Figure 15.
Valid
Weighted
Percent
99.7
4
11
.3
438
4351
100.0
247
3089
685
7440
Limited Service Saturday
Weighted
Frequency Frequency
413
4139
No
Limited Service Sunday
Weighted
Percent
94.8
Yes
26
226
5.2
Total
439
4365
100.0
Missing System
246
3075
Total
685
7440
Minimal differences across regions are evident for limited service branches, except for weekday
evening hours when 36.6 percent of West South Central banks are open, compared to 7.8 percent of
Pacific banks and 9.0 percent of Mid-Atlantic banks.
QIIIA. Figure 17.
No
Count
%
Yes
Count
%
Total Count
%
Region: Limited Service Weekday Evening
Limited Service Weekday Evening
East
West
West
South
South
South East North North
Atlantic
Central
Central
Central
Central Mountain
353
247
462
628
586
196
New
England
253
MidAtlantic
429
89.9%
91.0%
80.7%
77.2%
63.4%
71.0%
74.7%
82.7%
28
42
84
73
267
256
198
41
17
10.1%
9.0%
19.3%
22.8%
36.6%
29.0%
25.3%
17.3%
7.8%
Pacific
201
92.2%
282
471
438
320
729
885
784
237
218
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
112
Retail Branch Operations
Minimal differences are evident for extended hours at limited service branches tiers, other than for
Sunday hours. No Tier 3 banks have Sunday hours, but 4.3 percent of Tier 1 banks operate on
Sundays.
QIIIA. Figure 18.
Tier
New Tier
1
No
Count
Limited
Service
Saturday
21
65.2%
87.0%
%
Yes
Count
%
Total
2
Limited
Service
Weekday
Evening
16
Count
%
3
Limited
Service
Sunday
23
Limited
Service
Weekday
Evening
361
Limited
Service
Saturday
427
95.7%
78.8%
93.2%
Limited
Service
Sunday
447
Limited
Service
Weekday
Evening
2980
Limited
Service
Saturday
3691
Limited
Service
Sunday
3869
97.7%
76.8%
95.1%
100.0%
8
3
1
97
31
10
902
191
0
34.8%
13.0%
4.3%
21.2%
6.8%
2.3%
23.2%
4.9%
.0%
24
24
24
458
458
458
3883
3883
3869
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There appear to be some differences between the percentage of urban and rural banks offering
extended hours, including at brick and mortar branches on weekday evenings, Saturdays after 1:00
p.m., and Sundays; at retail branches on weekday evenings, Saturday afternoons, and Sundays; and at
limited service branches on weekday evenings. A larger percentage of urban banks have extended
hours for all branches, except for limited service weekday evening hours.
QIIIA. Figure 19.
Urban/Rural
Urban/Rural
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Brick and
Mortar
Weekday
Evening
554
Brick and
Mortar
Saturday
2116
23.7%
91.8%
Urban HQ
Brick and
Mortar
Sunday
2284
Brick and
Mortar
Weekday
Evening
281
Brick and
Mortar
Saturday
1569
Brick and
Mortar
Sunday
1874
99.7%
13.3%
76.2%
90.4%
1778
188
7
1833
491
199
76.3%
8.2%
.3%
86.7%
23.8%
9.6%
2332
2305
2291
2114
2060
2073
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
113
Retail Branch Operations
QIIIA. Figure 20.
Urban/Rural
Urban/Rural
Rural HQ
No
Count
Retail
Saturday
2103
87.0%
298
13.0%
%
Yes
Count
%
Total
Count
%
QIIIA. Figure 21.
Urban HQ
Retail
Weekday
Evening
1993
Retail
Sunday
2223
Retail
Weekday
Evening
1670
Retail
Saturday
1743
Retail
Sunday
1918
91.8%
97.0%
80.5%
84.1%
92.5%
188
69
404
331
156
8.2%
3.0%
19.5%
15.9%
7.5%
2291
2291
2291
2073
2073
2073
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Urban/Rural
Urban/Rural
Rural HQ
No
Count
Limited
Service
Saturday
2206
68.8%
96.3%
%
Yes
Count
Limited
Service
Saturday
1933
Limited
Service
Sunday
2048
100.0%
85.9%
93.2%
99.4%
715
86
0
293
140
11
3.7%
.0%
14.1%
6.8%
.6%
2291
2291
2291
2073
2073
2060
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Limited
Service
Sunday
2291
Limited
Service
Weekday
Evening
1780
31.2%
%
Total
Urban HQ
Limited
Service
Weekday
Evening
1576
Language
Over half (52 percent) of all banks surveyed have branch staff who are able to use foreign language
skills when interacting with customers. The survey questions identified five languages based on the
languages that most people speak, if they do not speak English well, as reflected by the U.S. Census
data. Other than the languages specified in the survey (Spanish, Chinese, Vietnamese, Korean, and
Tagalog), 13.0 percent of banks have staff members who can speak a different language. These
languages are listed in the survey form, but 11 other languages are identified by banks.
QIIIB. Figure 1. Languages other than English Spoken by Branch Staff
Languages
Banks with staff that interact
with that language
Spanish
47.0%
Chinese
3.6%
Vietnamese
3.0%
Korean
2.1%
Tagalog
2.2%
Other
13.0%
114
Retail Branch Operations
Question III B. What languages, other than English, does your branch staff
use to interact with customers?
Spanish
Chinese
Vietnamese
Korean
QIIIB. Figure 2. Spanish
Valid
No
Frequency
314
Weighted
Weighted
Frequency
Percent
3946
53.0
Valid
No
Frequency
647
Weighted
Weighted
Frequency
Percent
7283
97.9
Yes
371
3494
47.0
Yes
38
157
2.1
Total
685
7440
100.0
Total
685
7440
100.0
No
QIIIB. Figure 6. Tagalog
Frequency
635
Weighted
Weighted
Frequency
Percent
7173
96.4
Yes
50
267
3.6
Total
685
7440
100.0
Valid
QIIIB. Figure 4. Vietnamese
Valid
Other
QIIIB. Figure 5. Korean
QIIIB. Figure 3. Chinese
Valid
Tagalog
No
Frequency
642
No
Frequency
647
Weighted
Weighted
Frequency
Percent
7276
97.8
Yes
38
164
2.2
Total
685
7440
100.0
QIIIB. Figure 7. Other
Weighted
Weighted
Frequency
Percent
7215
97.0
Yes
43
225
3.0
Total
685
7440
100.0
Valid
No
Frequency
557
Weighted
Weighted
Frequency
Percent
6476
87.0
Yes
128
964
13.0
Total
685
7440
100.0
Banks identified 11 other languages: French (27), German (27), Russian (25), Polish (24), Italian (23),
Portuguese (17), Hindi (16), Arabic (15), American Sign Language (13), Greek (13), and Japanese
(12).
Overall, 51.7 percent of banks have a staff member that speaks a language other than English.
QIIIB. Figure 8. Does the bank have staff that speaks a language other than English?
Valid
Frequency
281
Weighted
Frequency
3597
Weighted
Percent
48.3
Yes
404
3843
51.7
Total
685
7440
100.0
No
115
Retail Branch Operations
There appear to be regional differences in the languages spoken by staff at bank branches for
Spanish, Chinese, Vietnamese, Korean, Tagalog, and “other.”
QIIIB. Figure 9. Region: Spanish
No
Count
New
England
212
MidAtlantic
325
South
Atlantic
421
East
South
Central
482
47.6%
56.0%
48.9%
70.6%
%
Yes
Count
%
Total
Count
%
QIIIB. Figure 10.
No
Count
Total
No
Count
%
Yes
Count
%
Total
Count
%
62.9%
74.2%
25.6%
34.9%
439
201
835
488
364
377
300
29.4%
71.0%
37.1%
25.8%
74.4%
65.1%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Chinese
West
South
Central
1174
East
North
Central
1296
West
North
Central
1405
Mountain
503
Pacific
360
99.7%
98.5%
99.7%
99.1%
78.0%
Region: Chinese
95.1%
99.0%
100.0%
QIIIB. Figure 11.
29.0%
51.1%
78.3%
%
Pacific
161
256
South
Atlantic
851
Count
Mountain
130
44.0%
MidAtlantic
552
%
West
North
Central
1046
234
New
England
349
Count
East
North
Central
827
52.4%
East
South
Central
683
%
Yes
Spanish
West
South
Central
342
97
28
9
0
3
19
5
5
102
21.7%
4.9%
1.0%
.0%
.3%
1.5%
.3%
.9%
22.0%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Vietnamese
West
East
South
North
Central
Central
1149
1290
West
North
Central
1402
Mountain
506
Pacific
387
99.4%
99.8%
83.9%
Region: Vietnamese
New
England
390
MidAtlantic
578
South
Atlantic
844
East
South
Central
669
87.5%
99.5%
98.1%
98.0%
97.7%
98.0%
56
3
16
14
28
26
8
1
74
12.5%
.5%
1.9%
2.0%
2.3%
2.0%
.6%
.2%
16.1%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
116
Retail Branch Operations
QIIIB. Figure 12.
No
Total
90.6%
99.0%
100.0%
99.7%
97.8%
99.7%
99.8%
88.4%
1
55
9
0
3
29
5
1
54
%
.2%
9.4%
1.0%
.0%
.3%
2.2%
.3%
.2%
11.6%
Count
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Tagalog
West
South
Central
1177
East
North
Central
1281
West
North
Central
1405
Mountain
506
Pacific
363
100.0%
97.4%
99.7%
99.8%
78.7%
Count
Count
New
England
442
MidAtlantic
574
South
Atlantic
844
99.2%
98.9%
98.1%
100.0%
Count
3
7
16
0
0
34
5
1
98
%
.8%
1.1%
1.9%
.0%
.0%
2.6%
.3%
.2%
21.3%
Count
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Other
West
South
Central
1132
East
North
Central
1109
West
North
Central
1338
Mountain
465
Pacific
343
74.3%
Count
Region: Other
New
England
239
MidAtlantic
431
South
Atlantic
766
East
South
Central
652
53.7%
74.3%
89.1%
95.5%
96.2%
84.3%
94.9%
91.7%
206
149
94
31
45
206
72
42
119
46.3%
25.7%
10.9%
4.5%
3.8%
15.7%
5.1%
8.3%
25.7%
%
Count
%
Total
Region: Tagalog
East
South
Central
683
QIIIB. Figure 14.
Yes
Pacific
408
99.8%
Count
%
No
Mountain
506
South
Atlantic
851
%
Total
West
North
Central
1405
MidAtlantic
526
QIIIB. Figure 13.
Yes
East
North
Central
1286
New
England
445
%
No
Korean
West
South
Central
1174
East
South
Central
683
%
Yes
Region: Korean
Count
%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
A greater percentage of Tier 1 banks have staff that can speak Spanish (100 percent), Chinese (66.7
percent), Vietnamese (62.5 percent), Korean (62.5 percent), Tagalog (50.0 percent), and “other”
languages (70.8 percent) than Tier 2 and Tier 3 banks.
QIIIB. Figure 15.
Tier: Spanish/Chinese/Vietnamese
Tier
1
No
Count
%
Yes
Count
%
Total Count
%
2
3
Spanish Chinese Vietnamese Spanish Chinese Vietnamese Spanish Chinese Vietnamese
0
8
9
118
479
492
3828
6686
6713
.0%
33.3%
37.5%
21.4%
86.8%
89.3%
55.8%
97.4%
97.8%
25
17
16
434
73
59
3035
178
150
100.0%
66.7%
62.5%
78.6%
13.2%
10.7%
44.2%
2.6%
2.2%
25
25
25
551
551
551
6863
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
117
Retail Branch Operations
QIIIB. Figure 16.
Tier: Korean/Tagalog/Other
Tier
1
No
Count
Tagalog
13
37.5%
16
%
Yes
Count
%
Total
2
Korean
9
Count
%
Other
3
7
Korean
492
Tagalog
482
Other
357
Korean
6781
Tagalog
6781
Other
6111
50.0%
29.2%
89.3%
87.4%
64.8%
98.8%
98.8%
89.0%
13
18
59
69
194
82
82
752
62.5%
50.0%
70.8%
10.7%
12.6%
35.2%
1.2%
1.2%
11.0%
25
25
25
551
551
551
6863
6863
6863
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
A larger percentage of urban banks have staff who can speak Spanish, Chinese, Vietnamese, Korean,
and Tagalog than rural banks. Urban banks have nearly twice as high a percentage of branch staff
with foreign language capabilities in Spanish, Chinese, Vietnamese, Korean, Tagalog, and “other”
languages than rural banks.
QIIIB. Figure 17.
Urban/Rural: Spanish/Chinese/Vietnamese
Urban Rural
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
QIIIB. Figure 18.
Urban HQ
Spanish
2523
Chinese
3932
Vietnamese
3932
Spanish
1423
Chinese
3241
Vietnamese
3283
63.7%
99.3%
99.3%
40.9%
93.1%
94.3%
1436
27
27
2057
240
198
36.3%
.7%
.7%
59.1%
6.9%
5.7%
3959
3959
3959
3480
3480
3480
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Urban/Rural: Korean/Tagalog/Other
Urban Rural
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Korean
3946
Tagalog
3932
Other
3669
Korean
3337
Tagalog
3344
Other
2807
99.7%
99.3%
92.7%
95.9%
96.1%
80.7%
14
27
291
143
137
673
.3%
.7%
7.3%
4.1%
3.9%
19.3%
3959
3959
3959
3480
3480
3480
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
118
Retail Branch Operations
Modifications in Retail Operations
Question III C. Has the bank modified its retail operations over the past
five years to make it easier or more welcoming or convenient for unbanked
or underbanked consumers to take advantage of its services?
Yes
No
About two-thirds (64.0 percent) of all banks have modified their retail operations in the past five
years to make the bank more welcoming or convenient for un/underbanked customers.
QIIIC. Figure 1. Has the bank modified its retail operations?
Valid
Frequency
211
Weighted
Frequency
2630
Yes
464
4684
64.0
Total
675
7313
100.0
No
Missing
System
Total
10
127
685
7440
Weighted
Percent
36.0
A greater percentage of Tier 1 (100 percent) banks and Tier 2 banks (84.2 percent) have modified
their retail operations to be more convenient or welcoming for unbanked individuals than Tier 3
banks (62.3 percent).
QIIIC. Figure 2. Tier
Has the bank modified its retail operations?
1
No
Count
%
Yes
Count
%
Total
Count
%
2
3
0
87
2543
.0%
15.8%
37.7%
25
461
4197
100.0%
84.2%
62.3%
25
548
6740
100.0%
100.0%
100.0%
There are minimal differences among regions for banks that have modified their retail operations.
Little difference between urban and rural banks is evident in the percentage of banks that have
modified their retail operations to make it easier for or more welcoming for un/underbanked
individuals to take advantage of their services.
119
Retail Branch Operations
Question III C-1. If yes, which approaches has the bank pursued? (Check
all that apply)
Extended banking hours
Non-traditional locations
(community centers, supermarkets, etc.)
New branch located in LMI area
Innovative branch formats/designs
(e.g., more casual lobby décor)
Internet or mobile banking
External ATMs (walk-up and through the wall)
Off-premise ATMs
Other
By far, the most common way that banks have made their retail branches more welcoming to
un/underbanked customers is through Internet or mobile banking options. Seventy-three percent of
banks that have made changes to their retail operations have done so by offering these services.
Installing external and off-premise ATMs are also common approaches.
Under half of banks (43.6 percent) that have made changes have extended their banking hours to
make banking more convenient for the unbanked and underbanked.
QIIIC-1. Figure 1.
Valid
Extended Banking Hours
Frequency
239
Weighted
Frequency
2643
Yes
225
2040
43.6
Total
464
4684
100.0
No
Weighted
Percent
56.4
Few (13.1 percent) banks have added non-traditional locations.
QIIIC-1. Figure 2.
Valid
Non-traditional Locations
Frequency
372
Weighted
Frequency
4072
Weighted
Percent
86.9
Yes
92
612
13.1
Total
464
4684
100.0
No
One in five (20.0 percent) banks has opened branches in LMI areas.
QIIIC-1. Figure 3.
Valid
No
New Branch Located in LMI Areas
Frequency
331
Weighted
Frequency
3748
Weighted
Percent
80.0
Yes
133
936
20.0
Total
464
4684
100.0
120
Retail Branch Operations
Few (16.5 percent) banks have used an innovative branch design.
QIIIC-1. Figure 4.
Valid
Innovative Branch Design
Frequency
363
Weighted
Frequency
3910
Weighted
Percent
83.5
Yes
101
773
16.5
Total
464
4684
100.0
No
About three-quarters (73.0 percent) of banks utilize Internet and mobile banking.
QIIIC-1. Figure 5.
Valid
Internet or Mobile Banking
Frequency
117
Weighted
Frequency
1266
Yes
347
3418
73.0
Total
464
4684
100.0
No
Weighted
Percent
27.0
Less than one-half (47.3 percent) of banks have external ATMs.
QIIIC-1. Figure 6.
Valid
External ATMs
Frequency
221
Weighted
Frequency
2469
Yes
243
2215
47.3
Total
464
4684
100.0
No
Weighted
Percent
52.7
Less than one-half (43.1 percent) of the banks have off-premise ATMs.
QIIIC-1. Figure 7.
Valid
Frequency
231
Weighted
Frequency
2664
Weighted
Percent
56.9
Yes
233
2020
43.1
Total
464
4684
100.0
Frequency
391
Weighted
Frequency
4021
Weighted
Percent
85.9
Yes
73
662
14.1
Total
464
4684
100.0
No
QIIIC-1. Figure 8.
Valid
Off-premise ATMs
No
Other
121
Retail Branch Operations
Some (14.1 percent) banks report other ways that they have modified their retail operations to make
it easier or more welcoming for unbanked and underbanked consumers to use their services. The
more frequently mentioned other responses are: bilingual staff, products or services (18), product
offering geared towards this population (11), extended branch hours (7), and mobile banking (6).
There appear to be some differences among banks’ reported approaches to modifying retail
operations for external ATMs and other approaches across regions. For example, 69.2 percent of
New England banks have installed external ATMs, compared with 34.2 percent of West North
Central banks. A higher percentage of East South Central banks (24.1 percent) describe using
another approach to modify retail operations compared with Mountain banks (0.0 percent).
QIIIC-1. Figure 9.
No
Count
%
Yes
Count
%
Total
Count
%
Region: External ATMs
External ATMs
East
West
East
South
South
North
Central
Central
Central
281
376
525
New
England
103
MidAtlantic
152
South
Atlantic
237
30.8%
44.1%
55.8%
65.5%
44.7%
230
193
188
148
465
69.2%
55.9%
44.2%
34.5%
55.3%
West
North
Central
574
Mountain
103
Pacific
117
58.3%
65.8%
38.3%
43.7%
376
299
165
150
41.7%
34.2%
61.7%
56.3%
333
345
425
430
842
902
873
268
266
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Other
West
South
Central
712
East
North
Central
726
West
North
Central Mountain
828
268
Pacific
253
QIIIC-1. Figure 10. Region: Other
No
Count
%
Yes
Count
%
Total
Count
%
New
England
264
MidAtlantic
259
South
Atlantic
386
East
South
Central
326
79.5%
75.1%
90.6%
75.9%
84.5%
80.6%
94.8%
100.0%
94.9%
68
86
40
104
130
175
46
0
14
20.5%
24.9%
9.4%
24.1%
15.5%
19.4%
5.2%
.0%
5.1%
333
345
425
430
842
902
873
268
266
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
122
Retail Branch Operations
A greater percentage of Tier 1 banks report they have made changes to their retail operations by
extending banking hours, adding non-traditional locations, opening new branches in LMI areas,
utilizing innovative branch design, deploying external ATMs, and implementing “other” approaches
than Tier 2 banks and Tier 3 banks.
QIIIC-1. Figure 11. Tier: Extended Banking Hours/Non-traditional Locations/New Branch Located in LMI
Areas
Tier
1
No
Count
%
Yes
Count
%
Total
Count
%
2
Extended
banking
hours
5
Nontraditional
locations
10
New
branch
located
in LMI
areas
1
20.8%
41.7%
4.2%
Extended
banking
hours
191
41.4%
3
Nontraditional
locations
302
New
branch
located
in LMI
areas
260
Extended
banking
hours
2447
Nontraditional
locations
3760
New
branch
located
in LMI
areas
3486
65.4%
56.4%
58.3%
89.6%
83.1%
20
15
24
271
160
201
1750
438
711
79.2%
58.3%
95.8%
58.6%
34.6%
43.6%
41.7%
10.4%
16.9%
25
25
25
461
461
461
4197
4197
4197
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIIIC-1. Figure 12. Tier: Innovative Branch Design/Internet or Mobile Banking/External ATMs
Tier
No
Count
%
Yes
Count
%
Total
Count
%
Innovative
branch
design
9
1
Internet
or
mobile
banking
3
Innovative
branch
design
319
2
Internet
or
mobile
banking
101
External
ATMs
5
37.5%
12.5%
16
22
62.5%
25
100.0%
Innovative
branch
design
3582
3
Internet
or
mobile
banking
1162
External
ATMs
166
External
ATMs
2297
20.8%
69.2%
21.8%
20
142
361
36.1%
85.3%
27.7%
54.7%
295
615
3035
1900
87.5%
79.2%
30.8%
25
25
461
78.2%
63.9%
14.7%
72.3%
45.3%
461
461
4197
4197
4197
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIIIC-1. Figure 13. Tier: Off-premise ATMs/Other
Tier
1
2
17
2
Off-premise
ATMs
160
8.3%
66.7%
34.6%
Off-premise
ATMs
No
Count
%
Yes
Count
%
Total
Count
%
Other
Other
381
3
Off-premise
ATMs
2502
Other
3623
82.7%
59.6%
86.3%
23
8
302
80
1695
574
91.7%
33.3%
65.4%
17.3%
40.4%
13.7%
25
25
461
461
4197
4197
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
123
Retail Branch Operations
A greater percentage of urban banks have modified their retail operations through opening nontraditional locations, opening branches in LMI areas, utilizing innovative branch design, and
deploying external ATMs than rural banks.
A larger percentage of urban banks pursue non-traditional locations, new branches in LMI areas,
and innovative branch design strategies than rural banks. Also, a larger percentage of urban banks
pursue external ATMs and off-premise ATMs strategies than rural banks.
QIIIC-1. Figure 14. Rural
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Extended
banking
hours
1508
Nontraditional
locations
2359
New
branch
located in
LMI areas
2226
Innovative
branch
design
2264
Internet
or
mobile
banking
732
External
ATMs
1450
Offpremise
ATMs
1511
Other
2243
58.0%
90.8%
85.6%
87.1%
28.1%
55.8%
58.1%
86.3%
1091
240
373
335
1867
1149
1088
356
42.0%
9.2%
14.4%
12.9%
71.9%
44.2%
41.9%
13.7%
2599
2599
2599
2599
2599
2599
2599
2599
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIIIC-1. Figure 15. Urban
Count
No
%
Count
Yes
%
Count
Total
%
Urban HQ
Extended
NonNew branch Innovative Internet or
Offbanking
traditional
located in
branch
mobile External premise
hours
locations
LMI areas
design
banking
ATMs
Other
ATMs
1135
1713
1522
1647
534
1019
1153
1778
54.5%
82.2%
73.0%
79.0%
25.6%
48.9%
55.3%
85.3%
949
372
563
438
1550
1066
932
307
45.5%
17.8%
27.0%
21.0%
74.4%
51.1%
44.7%
14.7%
2085
2085
2085
2085
2085
2085
2085
2085
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0% 100.0%
Question III C-2. If yes, please describe what you have done.
Fewer than half (43.2 percent) of the banks responding to this open-ended question provide a
written description of their approach in modifying their retail operations. Mobile or Internet banking
and ATM placement are the two most common approaches cited by banks. Opening new branches
and adding external ATMs in LMI areas are other common approaches to serving unbanked and/or
underbanked consumers.
Written descriptions provided by 227 of responding banks include approaches previously listed in
Question III C-1. The three most frequently described changes are Internet or mobile banking (147),
adding new ATMs (116), and extending banking hours (95).
124
Retail Branch Operations
For the 70 banks that describe branch modifications other than those previously listed in Question
III C-1, 27 identify adding bilingual staff, materials, or services to their operations. These additions
facilitate communication and make banking services more accessible to non-English speaking
individuals, who may comprise a significant segment of unbanked or underbanked populations in a
given market area.
Sixteen banks mention offering new products specifically aimed at the un/underbanked market,
such as free checking and savings accounts, and one bank described how it assumes the role of
check casher for non-customers. That bank’s program involves cashing checks drawn on other
banks for a fee in the range of 1.0 percent to 1.5 percent with a maximum fee cap. This service is
offered as a way to serve the immediate needs of the unbanked and/or underbanked and, over time,
convert them to a banking customer. In addition, the bank provides financial education about
banking products.
Check cashing as a branch strategy for serving the unbanked is identified in the following section.
Bank policies and pricing are examined more fully in Chapter 6.
Branch Strategies
Question III D. Please indicate efforts your bank makes as part of its
branch strategy to serve the unbanked and underbanked in your market
areas:
Check cashing
Money orders
Kiosks for check cashing
Bill payment services
Prepaid card issuance and reloading
Other
QIIID. Figure 1. Percent of Banks Branch Strategies to Serve Un/Underbanked by Effort
Efforts
Percent of Banks
Check Cashing
49.0%
Money Orders
41.4%
Bill Payment
18.2%
Prepaid Cards
12.2%
Other
11.4%
Kiosks for Check Cashing
0.8%
Overall, banks offer a limited range of products and service to the unbanked and underbanked
individuals. The most common services offered are check cashing (49.0 percent) and money orders
(41.4 percent). Bill payment (18.2 percent) and prepaid cards (12.2 percent) are the next two most
common services offered to serve unbanked and/or underbanked individuals as part of the branch
strategy to serve the unbanked and/or underbanked.
125
Retail Branch Operations
About half (49.0 percent) of banks offer check cashing service as part of their branch strategy to
serve unbanked and underbanked individuals in their market areas.
QIIID. Figure 2. Check Cashing
Valid
Frequency
346
Weighted
Frequency
3795
Yes
339
3645
49.0
Total
685
7440
100.0
No
Weighted
Percent
51.0
Less than half (41.4 percent) of banks sell money orders as part of their branch strategy for serving
the unbanked and underbanked in their market areas.
QIIID. Figure 3. Money Orders
Valid
Frequency
403
Weighted
Frequency
4358
Weighted
Percent
58.6
Yes
282
3082
41.4
Total
685
7440
100.0
No
Very few (0.8 percent) banks offer kiosks for check cashing as part of their branch strategy for
serving the unbanked and underbanked in their market areas.
QIIID. Figure 4. Kiosks for Check Cashing
Valid
No
Yes
Total
Frequency
679
Weighted
Frequency
7381
Weighted
Percent
99.2
6
59
.8
685
7440
100.0
Providing bill payment services is the third most common (18.2 percent) service banks offer as part
of their branch strategy to serve the unbanked and underbanked in their market areas.
QIIID. Figure 5. Bill Payment
Valid
Frequency
547
Weighted
Frequency
6085
Yes
138
1355
18.2
Total
685
7440
100.0
No
Weighted
Percent
81.8
126
Retail Branch Operations
Some (12.2 percent) banks offer prepaid cards as part of their branch strategy for serving the
unbanked and underbanked in their market areas.
QIIID. Figure 6. Prepaid Card
Valid
No
Frequency
593
Weighted
Frequency
6536
Weighted
Percent
87.8
Yes
92
904
12.2
Total
685
7440
100.0
Additionally, 11.4 percent of banks offer other services as part of their branch strategy for serving
the unbanked and underbanked in their market areas.
Banks mention 96 other efforts as part of their branch strategies. The most frequently mentioned
items include: offering basic products (19), cashing government, payroll, and cashier checks (17),
offering debit/prepaid/credit cards (9), and providing mobile banking options (6). Seven banks
report “none.”
QIIID. Figure 7. Other
Valid
No
Frequency
595
Weighted
Frequency
6594
Weighted
Percent
88.6
Yes
90
846
11.4
Total
685
7440
100.0
Differences are evident across regions for banks offering money orders and check cashing as their
branch strategies. For example, a smaller percentage of banks in the New England (34.8 percent)
and Mid-Atlantic (30.8 percent) regions offer check cashing compared with banks in the West North
Central (61.9 percent) and West South Central (66.0 percent) regions. In contrast, a larger percentage
of banks in the East North Central (53.9 percent) and West North Central (58.0 percent) offer
money orders than banks in the East South Central (21.7 percent), New England (25.3 percent),
South Atlantic (25.2 percent), and Pacific (26.2 percent) regions.
QIIID. Figure 8. Region: Check Cashing
No
Count
%
Yes
Count
%
Total
Count
%
Check Cashing
East
West
East
South
South
North
Central
Central
Central
374
400
707
West
North
Central
537
Mountain
285
Pacific
279
53.7%
38.1%
56.2%
60.4%
609
873
222
183
66.0%
46.3%
61.9%
43.8%
39.6%
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
New
England
291
MidAtlantic
402
South
Atlantic
521
65.2%
69.2%
60.6%
54.8%
34.0%
155
179
339
309
777
34.8%
30.8%
39.4%
45.2%
446
581
860
683
100.0%
100.0%
100.0%
100.0%
127
Retail Branch Operations
QIIID. Figure 9. Region: Money Orders
New
England
No
Count
%
Yes
Count
%
Total
Count
%
MidAtlantic
East
South
Central
South
Atlantic
Money Orders
West
East
South
North
Central
Central
West
North
Central
Mountain
Pacific
333
332
643
535
674
606
593
302
340
74.7%
57.2%
74.8%
78.3%
57.3%
46.1%
42.0%
59.5%
73.8%
113
249
216
148
503
710
817
205
121
25.3%
42.8%
25.2%
21.7%
42.7%
53.9%
58.0%
40.5%
26.2%
446
581
860
683
1177
1316
1410
507
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Branch offerings are similar across banks sizes, except for money orders and “other” offerings.
About two-thirds (66.7 percent) of Tier 1 banks offer money orders as part or their strategy to serve
the unbanked and underbanked, compared with 35.3 percent of Tier 2 banks and 53.1 percent of
Tier 3 banks.
QIIID. Figure 10.
Tier: Money Orders/Other
New Tier
Tier 1
No
Count
%
Yes
Other
Tier 3
18
33.3%
70.8%
64.7%
78.9%
46.9%
87.3%
17
7
163
97
2229
533
66.7%
29.2%
35.3%
21.1%
53.1%
12.7%
25
25
461
461
4197
4197
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Tier 2
Money Orders
298
Count
%
Total
Money Orders
8
Other
364
Money Orders
1969
Other
3664
A larger percentage of rural banks offer check cashing, money orders, and prepaid debit cards as a
strategy to serve the unbanked and underbanked than urban banks.
QIIID. Figure 11.
Urban/Rural: Check Cashing/Money Orders/Kiosk for Check Cashing
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Check
cashing
1549
Money Orders
2045
Kiosks for
check
cashing
3918
Check
cashing
2246
Money Orders
2313
Kiosks for
check
cashing
3462
39.1%
51.6%
99.0%
64.5%
66.5%
2411
1914
41
1234
1168
99.5%
18
60.9%
48.4%
1.0%
35.5%
33.5%
.5%
3959
3959
3959
3480
3480
3480
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
128
Retail Branch Operations
QIIID. Figure 12.
Urban/Rural: Bill Payment/Prepaid Card/Other
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Bill payment
3234
Prepaid card
3392
Other
3590
Bill payment
2851
Prepaid card
3144
Other
3004
81.7%
85.7%
90.7%
81.9%
90.3%
86.3%
725
568
369
630
336
477
18.3%
14.3%
9.3%
18.1%
9.7%
13.7%
3959
3959
3959
3480
3480
3480
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
129
Retail Branch Operations
130
Retail Branch Operations
Chapter
6
Services Provided to
Non-Customers
This chapter examines the following topics:
Check Cashing Policies
Identification Required for Non-Customers to Cash Checks
Check Cashing Fees (if charged)
Transaction Products Offered and Fees
Remittances
This chapter addresses the Congressional Question 3: efforts financial institutions make at converting unbanked money
order, wire transfer, and international remittance customers into conventional account holders.
Summary
Banks can and do provide important financial services to unbanked and underbanked individuals.
However, many transaction services are not offered to individuals who do not hold conventional
deposit-based transaction accounts due to operational challenges and risks for banks.
Check Cashing: From banks’ perspectives, cashing checks for non-customers presents risks of
monetary losses on fraudulent checks with little recourse. Additionally, identification requirements
and regulatory policies (e.g., CIP, BSA) challenge banks’ operations and compliance. Although banks
were not surveyed about specific regulations, these were identified as obstacles which may have
caused most banks to limit check cashing, if offered at all, to only certain “on-us” items for
unbanked and underbanked individuals. Over 95 percent of banks will cash checks for noncustomers for on-us personal and business checks. In contrast, less than one-third (32 percent) of
banks will cash a local payroll check not drawn on their bank for a non-customer. Of those banks
that will cash payroll checks, 87 percent charge a fee.
When cashing checks for non-customers, banks depend upon government-issued photo
identification (ID) to verify the identity of the individual. Banks typically accept driver’s licenses (92
percent), state-issued photo IDs (86 percent), and U.S. or foreign passports (81 percent) as a primary
form of ID.
131
Services Provided to Non-Customers
Check cashing presents opportunities for banks to bring unbanked and underbanked individuals into
the banking system by acting as a point-of-entry. Over two-thirds (69 percent) of banks provide
teller and customer service training that includes strategies to encourage account opening.
Payment Products: The majority of banks have policies that prohibit or limit the availability of
needed transaction products and services for non-customers; slightly more than one-third (37
percent) of banks offer official checks or money orders, even fewer offer bill payment (12 percent)
and international remittance services (6 percent). About one-third (32 percent) of banks are
concerned about offering remittances due to regulatory considerations. Banks’ policies differ among
regions and bank size.
Check Cashing Policies
For non-customers, nearly all banks cash business (95.5 percent) and personal checks (96.4 percent)
drawn on their bank. Importantly, more than half of banks (58.1 percent) will cash government
checks. In contrast, only 31.9 percent of banks cash payroll checks not drawn on their bank for noncustomers, and only 22.7 percent of banks cash business checks not drawn on their bank. Only 6.4
percent of banks cash personal checks not drawn on their bank, and 2.4 percent cash doubleendorsed checks from third parties for non-customers. Common reasons for limiting check cashing
for non-customers are described in Question IVA-1.
For non-customers who cash an on-us business check, 12.9 percent of banks charge a fee. Twelve
percent of banks charge a fee for non-customers to cash on-us personal checks. Of the banks that
cash government checks, 58.2 percent charge a fee for non-customers. Among banks that cash
checks not drawn on their bank for non-customers, most charge fees for payroll checks (86.9
percent), business checks (92.2 percent), and personal checks (94.9 percent).
132
Services Provided to Non-Customers
Question IVA. If an individual does not have an account relationship with
the bank, will the bank typically cash the following types of checks?
If Yes:
Type of Check
Cash Check for
Non-Customer?
Is a Fee
Charged?
Typical fee per
check cashed by
non-customers*
Please indicate
either a fixed
dollar amount or
percentage of
face value
Personal check drawn on your bank (On-us)
96.4%
12.0%
$5.00
Business check drawn on your bank (On-us)
95.5%
12.9%
$5.00
Government check
58.1%
58.2%
$5.00
Payroll check not drawn on your bank (Local)
31.9%
86.9%
$5.00
Business check not drawn on your bank (Local)
22.7%
92.2%
$5.00
Personal check not drawn on your bank (Local)
6.4%
94.9%
$5.00
Double endorsed check from a third-party
2.4%
40.1%
$5.00
*The median fee for cashing a $300 check based on application of fixed-fee and face value percentages provided by
banks that charge a fee for cashing checks for non-customers
133
Services Provided to Non-Customers
Almost all (95.5 percent) banks cash on-us business checks for non-customers.
QIVA. Figure 1. Do you cash business checks drawn on your bank for non-customers?
Valid
Frequency
30
Weighted
Frequency
329
Weighted
Percent
4.5
Yes
648
7026
95.5
Total
678
7354
100.0
7
86
685
7440
No
Missing
System
Total
There are differences between regions, with 88.9 percent of banks in the Mid-Atlantic cashing on-us
business checks for non-customers, compared with 100 percent of West North Central banks
cashing business checks.
QIVA. Figure 2. Region
Do you cash business checks drawn on your bank for non-customers?
No
Count
New
England
17
MidAtlantic
62
South
Atlantic
58
East
South
Central
58
West
South
Central
41
East
North
Central
34
3.8%
11.1%
6.8%
8.9%
3.5%
2.6%
429
492
801
597
1122
1281
1406
439
458
96.2%
88.9%
93.2%
91.1%
96.5%
97.4%
100.0%
88.9%
99.2%
%
Yes
Count
%
Total
Count
%
West
North
Central
Mountain
55
Pacific
3
11.1%
.8%
446
553
860
655
1163
1316
1406
494
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are no differences in policies by tier for cashing business checks drawn on the bank for noncustomers.
Of the banks that cash on-us business checks for non-customers, 12.9 percent cash these checks for
a fee.
QIVA. Figure 3. Do you charge a fee to cash on-us business checks?
Valid
Missing
Total
Frequency
521
Weighted
Frequency
5828
Weighted
Percent
87.1
Yes
99
866
12.9
Total
620
6694
100.0
28
332
648
7026
No
System
134
Services Provided to Non-Customers
There are differences in policies among regions for banks charging fees to cash on-us business
checks for non-customers, specifically between the East North Central region (23.7 percent) and the
New England (0.8 percent) and South Atlantic (6.3 percent) regions.
QIVA. Figure 4. Region
Do you charge a fee to cash on-us business checks?
No
Count
New
England
411
MidAtlantic
411
South
Atlantic
709
East
South
Central
507
West
South
Central
985
East
North
Central
955
West
North
Central
1118
Mountain
353
Pacific
378
99.2%
91.8%
93.7%
84.9%
94.1%
76.3%
84.4%
85.9%
85.1%
%
Yes
Count
%
Total
Count
%
3
37
48
90
62
296
206
58
66
.8%
8.2%
6.3%
15.1%
5.9%
23.7%
15.6%
14.1%
14.9%
415
447
757
597
1047
1250
1324
412
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for charging fees to cash on-us business checks for noncustomers. About two-thirds (66.7 percent) of Tier 1 banks charge fees, compared with 19.3 percent
of Tier 2 and 12.2 percent of Tier 3 banks.
QIVA. Figure 5. Tier
Do you charge a fee to cash on-us
business checks?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
8
Tier 2
406
Tier 3
5414
33.3%
80.7%
87.8%
17
97
752
66.7%
19.3%
12.2%
25
503
6166
100.0%
100.0%
100.0%
Almost all (96.4 percent) banks cash on-us business checks for non-customers.
QIVA. Figure 6. Do you cash personal checks drawn on your bank for non-customers?
Valid
No
Weighted
Percent
3.6
Yes
653
7084
96.4
Total
677
7351
100.0
Missing System
Total
Weighted
Frequency
Frequency
24
267
8
89
685
7440
135
Services Provided to Non-Customers
There is a difference between regions for cashing on-us personal checks for non-customers. All of
the West North Central banks have this policy, compared with 86.6 percent of Mid Atlantic banks.
QIVA. Figure 7. Region
Do you cash personal checks drawn on your bank for non-customers?
No
Count
New
England
14
Mid
Atlantic
75
South
Atlantic
31
East
South
Central
44
West
South
Central
14
East
North
Central
31
3.1%
13.4%
3.6%
6.9%
1.2%
2.3%
432
488
825
597
1150
1285
1410
96.9%
86.6%
96.4%
93.1%
98.8%
97.7%
446
563
856
642
1163
1316
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
West
North
Central
Mountain
41
Pacific
17
8.3%
3.7%
453
444
100.0%
91.7%
96.3%
1410
494
461
100.0%
100.0%
100.0%
There is no difference between tiers for banks that cash on-us personal checks for non-customers.
Among banks that cash personal checks drawn on their bank, 12.9 percent charge non-customers a
fee to cash these checks.
QIVA. Figure 8. Do you charge a fee to cash personal checks drawn on your bank for non-customers?
Valid
Weighted
Frequency
Frequency
535
5828
No
Missing
Weighted
Percent
87.1
Yes
88
866
12.9
Total
623
6694
100.0
30
332
653
7026
System
Total
There are differences for charging fees to cash personal checks for non-customers among regions.
The East North Central region (24.4 percent) is different from the New England (0.8 percent),
South Atlantic (1.9 percent), and West South Central (4.1 percent) regions.
QIVA. Figure 9. Region
No
Count
%
Yes
Total
New
England
415
Do you charge a fee to cash personal checks drawn on your bank?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
412
766
507
1030
948
1105
367
Pacific
378
99.2%
92.8%
98.1%
84.9%
95.9%
75.6%
84.3%
86.3%
87.8%
3
32
15
90
44
306
205
58
52
%
.8%
7.2%
1.9%
15.1%
4.1%
24.4%
15.7%
13.7%
12.2%
Count
418
444
781
597
1074
1254
1311
425
431
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
136
Services Provided to Non-Customers
There is a difference between tiers for charging fees to cash personal checks drawn on their bank for
non-customers. Tier 1 (50.0 percent) is different from Tier 2 (16.6 percent) and Tier 3 (11.5
percent).
QIVA. Figure 10.
Tier
Do you charge a fee to cash personal
checks drawn on your bank?
Tier 1
No
13
Tier 2
420
Tier 3
5496
50.0%
83.4%
88.5%
13
83
711
50.0%
16.6%
11.5%
Count
%
Yes
Count
%
Total
Count
%
25
503
6207
100.0%
100.0%
100.0%
About a quarter (22.7 percent) of banks will cash local business checks that are not drawn on their
bank for non-customers.
QIVA. Figure 11.
Valid
Do you cash business checks not drawn on your bank for non-customers?
Frequency
536
Weighted
Frequency
5634
Yes
136
1658
22.7
Total
672
7293
100.0
13
147
685
7440
No
Missing System
Total
Weighted
Percent
77.3
There are differences for cashing business checks not drawn on the bank for non-customers by
region. The West North Central region (39.4 percent) has more banks cashing these checks than the
Pacific (6.2 percent), Mid Atlantic (6.3 percent), South Atlantic (9.3 percent), Mountain (11.4
percent), and New England (10.0 percent) regions.
QIVA. Figure 12.
Region
Do you cash business checks not drawn on your bank for non-customers?
No
Count
%
Yes
Count
%
Total
Count
%
New
England
401
MidAtlantic
528
South
Atlantic
767
East
South
Central
449
West
South
Central
825
East
North
Central
953
West
North
Central
853
Mountain
425
Pacific
433
90.0%
93.7%
90.7%
71.5%
71.1%
73.2%
60.6%
88.6%
93.8%
44
35
79
179
335
349
554
55
28
10.0%
6.3%
9.3%
28.5%
28.9%
26.8%
39.4%
11.4%
6.2%
446
563
846
628
1160
1302
1406
480
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
137
Services Provided to Non-Customers
There is a difference for cashing business checks not drawn on the bank for non-customers by tier.
Twice as many Tier 3 (23.8 percent) and cash these checks than do Tier 2 (10.3 percent) banks.
QIVA. Figure 13.
Tier
Do you cash business checks not drawn on
your bank for non-customers?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
22
486
Tier 3
5127
87.5%
89.7%
76.2%
3
55
1600
12.5%
10.3%
23.8%
25
541
6727
100.0%
100.0%
100.0%
Among banks that cash business checks, 92.2 percent charge a fee for non-customers to cash local
business checks not drawn on their bank.
QIVA. Figure 14.
Valid
Missing
Do you charge a fee to cash business checks not drawn on your bank for non-customers?
Frequency
10
Weighted
Frequency
127
Weighted
Percent
7.8
Yes
122
1487
92.2
Total
132
1614
100.0
4
44
136
1658
No
System
Total
There is little difference for charging fees to cash business checks not drawn on the bank for noncustomers by region.
There is little difference between tiers for charging fees to cash business checks not drawn on the
bank for non-customers.
About a third (31.9 percent) of banks will cash local payroll checks for non-customers.
QIVA. Figure 15.
Valid
Missing
Total
Do you cash payroll checks not drawn on your bank for non-customers?
Frequency
472
Weighted
Frequency
4963
Yes
201
2323
31.9
Total
673
7286
100.0
No
System
12
154
685
7440
Weighted
Percent
68.1
138
Services Provided to Non-Customers
There are differences for cashing payroll checks for non-customers by region. The South Atlantic
region (13.1 percent) is different from the West South Central (43.8 percent) and West North
Central (48.4 percent) regions. The Pacific region (6.9 percent) is different from the West North
Central (48.4 percent), West South Central (43.8 percent), and East North Central (40.6 percent)
regions.
QIVA. Figure 16.
Region
Do you cash payroll checks not drawn on your bank for non-customers?
No
Count
New
England
356
MidAtlantic
467
South
Atlantic
735
East
South
Central
473
West
South
Central
654
East
North
Central
773
West
North
Central
726
Mountain
350
Pacific
430
79.8%
84.3%
86.9%
73.7%
56.2%
59.4%
51.6%
75.1%
93.1%
%
Yes
Count
%
Total
Count
%
90
87
111
169
510
529
680
116
32
20.2%
15.7%
13.1%
26.3%
43.8%
40.6%
48.4%
24.9%
6.9%
446
553
846
642
1163
1302
1406
466
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are small differences for cashing payroll checks not drawn on the bank for non-customers by
tier. More that one-quarter (29.2 percent) of Tier 1 banks cash payroll checks, compared with 20.9
percent of Tier 2 and 32.8 percent of Tier 3.
QIVA. Figure 17.
Tier
Do you cash payroll checks not drawn on your
bank for non-customers?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
18
434
Tier 3
4512
70.8%
79.1%
67.2%
7
114
2201
29.2%
20.9%
32.8%
25
548
6713
100.0%
100.0%
100.0%
Among banks that cash payroll checks not drawn on the bank for non-customers, 86.9 percent
charge a fee to cash them for non-customers.
QIVA. Figure 18.
Valid
Missing
Total
Do you charge a fee to cash payroll checks not drawn on your bank for non-customers?
Frequency
26
Weighted
Frequency
294
Yes
167
1952
86.9
Total
193
2247
100.0
No
System
8
76
201
2323
Weighted
Percent
13.1
There is little difference for charging a fee for payroll checks for non-customers by region or tier.
139
Services Provided to Non-Customers
Only 6.4 percent of banks will cash a personal check not drawn on their bank for non-customers.
QIVA. Figure 19.
Valid
Do you cash personal checks not drawn on your bank for non-customers?
Frequency
634
Weighted
Frequency
6806
Weighted
Percent
93.6
Yes
37
463
6.4
Total
671
7269
100.0
14
171
685
7440
No
Missing
System
Total
There are differences for cashing personal checks not drawn on the bank for non-customers among
regions. The West North Central region (14.7 percent) is different from the South Atlantic region
(1.6 percent) and Mountain region (0 percent).
QIVA. Figure 20.
Region
Do you cash personal checks not drawn on your bank for non-customers?
No
Count
New
England
429
MidAtlantic
563
South
Atlantic
846
East
South
Central
614
West
South
Central
1047
East
North
Central
1206
West
North
Central
1188
Mountain
466
Pacific
447
96.9%
99.4%
98.4%
97.8%
92.2%
91.7%
85.3%
100.0%
96.8%
%
Yes
Count
%
Total
Count
%
14
3
14
14
89
109
205
15
3.1%
.6%
1.6%
2.2%
7.8%
8.3%
14.7%
3.2%
442
567
860
628
1136
1316
1393
466
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is no difference for cashing personal checks not drawn on the bank for non-customers by tier.
Among banks that cash personal checks not drawn on the banks for non-customers, 93.9 percent
charge a fee.
QIVA. Figure 21.
Do you charge a fee to cash personal checks not drawn on your bank for non-customers?
No
2
Weighted
Frequency
27
Yes
33
418
93.9
Total
35
445
100.0
Frequency
Valid
Missing
Total
System
2
17
37
463
Weighted
Percent
6.1
140
Services Provided to Non-Customers
There are slight differences among regions for banks that charge a fee to cash personal checks not
drawn on the bank for non-customers, but there are not enough cases to draw further conclusions.
QIVA. Figure 22.
Region
Do you charge a fee to cash personal checks not drawn on your bank for non-customers?
No
New
England
0
Count
Total
.0%
.0%
0
14
86
100.0%
.0%
100.0%
3
14
14
100.0%
100.0%
100.0%
.0%
14
3
100.0%
14
100.0%
Count
%
100.0%
.0%
Count
%
0
0
South
Atlantic
14
%
Yes
0
East
North
Central
14
MidAtlantic
East
South
Central
West
South
Central
West
North
Central
Pacific
0
0
12.5%
.0%
.0%
96
191
15
100.0%
87.5%
100.0%
100.0%
86
109
191
15
100.0%
100.0%
100.0%
100.0%
There is little difference between tiers for banks that charge a fee to cash personal checks not drawn
on the bank for non-customers.
Over half (58.1 percent) of the banks will cash government checks for non-customers.
QIVA. Figure 23.
Valid
Do you cash government checks for non-customers?
Frequency
306
Weighted
Frequency
3066
Weighted
Percent
41.9
Yes
368
4244
58.1
Total
674
7310
100.0
11
130
685
7440
No
Missing
System
Total
There are differences for cashing government checks for non-customers by region. The West North
Central region has the largest percentage (78.1 percent) of banks that cash government checks,
compared with 28.2 percent in the Mid-Atlantic region.
QIVA. Figure 24.
Region
Do you cash government checks for non-customers?
No
Count
%
Yes
Count
%
Total
Count
%
New
England
140
MidAtlantic
395
South
Atlantic
560
East
South
Central
264
West
South
Central
305
East
North
Central
568
West
North
Central
308
Mountain
220
Pacific
306
31.5%
71.8%
65.1%
40.3%
26.2%
44.1%
21.9%
45.8%
66.3%
305
155
300
391
858
720
1098
260
155
68.5%
28.2%
34.9%
59.7%
73.8%
55.9%
78.1%
54.2%
33.7%
446
550
860
655
1163
1288
1406
480
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for cashing government checks for non-customers. Tier 2 (42.0
percent) is different from Tier 3 (59.4 percent).
141
Services Provided to Non-Customers
QIVA. Figure 25.
Tier
Do you cash government checks for noncustomers?
Tier 1
No
16
316
Tier 3
2734
62.5%
58.0%
40.6%
Count
%
Yes
Count
%
Total
9
229
4006
37.5%
42.0%
59.4%
Count
%
Tier 2
25
544
6740
100.0%
100.0%
100.0%
Of the banks that cash government checks for non-customers, 58.2 percent charge a fee.
QIVA. Figure 26.
Valid
Do you charge a fee to cash government checks for non-customers?
Frequency
144
Weighted
Frequency
1650
Yes
199
2293
58.2
Total
343
3943
100.0
No
Missing
System
Total
25
301
368
4244
Weighted
Percent
41.8
There are differences among regions for banks that charge a fee to cash government checks for noncustomers. New England (16.1 percent) is different from East South Central (57.4 percent),
Mountain (56.6 percent), East North Central (61.2 percent), West North Central (61.5 percent),
West South Central (63.2 percent), Pacific (63.7 percent), and South Atlantic (70.3 percent).
QIVA. Figure 27.
No
Count
%
Yes
Count
%
Total
Count
%
Region
New
England
219
83.9%
Do you charge a fee to cash government checks for non-customers?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
83
89
161
291
253
390
113
56.1%
29.7%
42.6%
36.8%
38.8%
38.5%
43.4%
Pacific
51
36.3%
42
65
211
217
499
399
623
147
90
16.1%
43.9%
70.3%
57.4%
63.2%
61.2%
61.5%
56.6%
63.7%
261
148
300
377
790
652
1013
260
142
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
142
Services Provided to Non-Customers
There is no difference between tiers for banks that charge a fee to cash government checks for noncustomers.
Only 2.4 percent of banks will cash double-endorsed checks for non-customers.
QIVA. Figure 28.
Valid
Missing
No
Do you cash double endorsed checks for non-customers?
Frequency
650
Weighted
Frequency
7076
Weighted
Percent
97.6
Yes
18
172
2.4
Total
668
7248
100.0
System
Total
17
192
685
7440
There are no differences for cashing double-endorsed checks for non-customers by region or tier.
Of the banks that cash double-endorsed checks for non-customers, 40.1 percent charge a fee.
QIVA. Figure 29.
Valid
Missing
Total
No
Do you charge a fee to cash double endorsed checks for non-customers?
Frequency
11
Weighted
Frequency
87
Weighted
Percent
59.9
Yes
5
58
40.1
Total
16
145
100.0
System
2
27
18
172
There is no difference between regions or tiers for banks that charge a fee to cash double-endorsed
checks for non-customers.
143
Services Provided to Non-Customers
There are differences between urban and rural banks for all types of checks cashed for noncustomers, except for double-endorsed checks. Overall, a higher percentage of rural banks will cash
checks for non-customers than urban banks.
QIVA. Figure 30.
Urban/Rural
Types of Checks Cashed for Non-Customers
Rural HQ
96
41
%
2.5%
1.1%
63.1%
6.7%
6.5%
93.0%
Count
3809
3847
1419
3217
3237
239
97.5%
98.9%
36.9%
93.3%
93.5%
7.0%
3905
3888
3850
3450
3463
3443
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
On-us
Business
Checks
No
Yes
Count
%
Total
Urban HQ
Local
Business
Checks (Not
drawn on the
bank)
2431
Count
%
On-us
Personal
Checks
On-us
Business
Checks
233
On-us
Personal
Checks
226
Local
Business
Checks (Not
drawn on the
bank)
3203
QIVA. Figure 31. Urban/Rural
Types of Checks Cashed for Non-Customers
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Local
Payroll
Checks
1915
Local
Personal
Checks
(Not
drawn
on the
bank)
3395
Government
Checks
759
Double
Endorsed
Checks
3723
49.9%
88.8%
19.5%
97.4%
Local
Payroll
Checks
3048
Local
Personal
Checks
(Not drawn
on the
bank)
3411
Government
Checks
2307
Double
Endorsed
Checks
3352
88.4%
99.0%
67.5%
97.9%
1921
427
3132
99
402
35
1112
73
50.1%
11.2%
80.5%
2.6%
11.6%
1.0%
32.5%
2.1%
3836
3823
3891
3823
3450
3446
3419
3426
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
144
Services Provided to Non-Customers
There is a difference between urban and rural banks for banks that charge a fee to cash business
checks drawn on the bank for non-customers. For rural banks, 11.6 percent of the banks charge a
fee, compared with 14.5 percent of urban banks.
QIVA. Figure 32.
Urban/Rural
Do you charge a fee to cash business
checks drawn on the bank for noncustomers?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
3163
2666
88.4%
85.5%
414
452
11.6%
14.5%
3577
3117
100.0%
100.0%
There is a difference between urban and rural banks for banks that charge a fee to cash government
checks for non-customers. About two-thirds (62.4 percent) of rural banks charge a fee, compared
with 46.0 percent of urban banks.
QIVA. Figure 33.
Urban/Rural
Do you charge a fee to cash
government checks for noncustomers?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
1094
Urban HQ
556
37.6%
54.0%
1819
474
62.4%
46.0%
2913
1030
100.0%
100.0%
Question IVA-1. Please describe the bank’s concerns which may have led to
limitations on transactions for non-customers.
Banks’ open-ended responses identify several reasons why they are reluctant to cash checks for noncustomers. Among the open-ended responses, 513 banks explain that without an established
customer relationship, they must be cautious when cashing checks for non-customers due to fraud
risks. Banks state that they do not have a foolproof way to verify identity and financial information
when encountering a non-customer for the first time. Some banks report that they do cash checks
for non-customers for a fee, in the hope of building customer relationships in the future.
Fraudulent activity and the increased risk of bank losses are reported by 315 of the 513 banks to be
their biggest concern with non-customer transactions. The different types of fraud that concern
banks include: identity theft, forged checks, counterfeit checks, and stolen checks.
Collectability concerns are mentioned in 140 instances. Collectability issues include returned checks,
NSF, stop payments, and verification of funds.
145
Services Provided to Non-Customers
The third most frequently cited concern is the lack of information about non-customers needed for
CIP, AML, KYC, and Patriot Act compliance, which is mentioned in 138 instances. BSA/AML
concerns (78) along with OFAC regulatory concerns (33) are mentioned a total of 111 times.
Issues with non-customers having no identification or presenting fraudulent identification can
challenge banks in their efforts to serve individuals who have no prior relationship with financial
institutions.
A commonly cited concern is limited recourse for non-customers to collect funds from bad or
fraudulent checks or to validate the authenticity of addresses. Ninety-five banks indicate that this is
one of the reasons for limiting service offerings to non-customers. Once a non-customer completes
the transaction, banks indicate they have little power to recover money in the case of fraud.
Question IVB. Does the training provided to the bank’s tellers and other
customer service representatives include strategies for reaching out to
unbanked or underbanked consumers (e.g., encouraging individuals who do
not have a transaction or savings account who are cashing paychecks to
open an account)?
Yes
No
Over two-thirds (68.6 percent) of banks provide teller and customer service training that include
strategies for reaching out to un/underbanked consumers.
QIVB. Figure 1. Does training include strategies for reaching out to the unbanked?
Valid
Missing
Total
Frequency
186
Weighted
Frequency
2183
Weighted
Percent
31.4
Yes
457
4767
68.6
Total
643
6950
100.0
44
489
687
7440
No
System
There are few differences among regions for training that includes strategies to reach out to the
unbanked.
146
Services Provided to Non-Customers
There is a difference between tiers for training that includes strategies to reach out to the unbanked.
Tiers 1 and 3 are different from each other, with 95.8 percent of Tier 1 banks reporting strategies
and training to reach out to the un/underbanked, compared with 67.8 percent of Tier 3 banks.
QIVB. Figure 2. Tier
Does training include strategies for reaching out to
the unbanked?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
1
Tier 2
118
Tier 3
2064
4.2%
23.0%
32.2%
24
395
4348
95.8%
77.0%
67.8%
25
513
6412
100.0%
100.0%
100.0%
There is little difference between urban and rural banks for training that includes strategies to reach
out to the unbanked.
Question IVB-1. If yes, please describe.
Overall, banks report that teller training is a simple and effective strategy for reaching out to
unbanked and/or underbanked consumers. If a non-customer enters a bank to use a particular
financial service, the teller is instructed to explain the benefits of opening an account and building a
relationship with the bank. Sometimes, providing encouragement and explaining why accountopening can be more economical and beneficial are sufficient to convert a non-customer into a
customer.
Over two-thirds (297 of 426) of the reporting banks report that their main strategy for reaching
out to the unbanked and underbanked consumer is by encouraging non-customers to open
accounts and offering products that fit their needs.
About one-sixth of the reporting banks (75 of 426) focus on cross-selling strategies in which
tellers are trained to offer original account openings and other products and services to the
underbanked.
Among the reporting banks, relatively few (22 of 426) have incentive programs for tellers who
convert non-customers into customers.
A smaller number (16 of 426) of banks report that they train tellers to refer non-customers
directly to a customer service representative or personal banker.
One bank reported a program to evaluate the effectiveness of teller training. Individuals come
into the bank posing as non-customers and present scenarios to test if the correct banking
options are offered.
147
Services Provided to Non-Customers
Identification Required for Non-Customers to
Cash Checks
Bank policies for non-customer check cashing generally require that a government-issued ID be
presented as a primary form of identification. However, other forms of ID can be used as secondary
sources of identification.
The most commonly accepted form of primary identification for check cashing is a driver’s license,
followed by state and military identifications. A housing lease is the least commonly accepted form
of identification; most banks (83 percent) will not accept a housing lease as sufficient identification
to cash a check.
Question IVC. What forms of consumer identification or validation does the
bank rely on for individuals who do not have an account relationship to cash
a check?
Secondary: Insufficient
Primary:
alone but acceptable
Not Accepted as
Sufficient alone
with another secondary
ID for
ID
Identification Forms
by itself
check cashing
Driver’s license
91.9%
7.7%
0.5%
State-issued photo ID
85.7%
12.7%
1.6%
Passport (US. or foreign)
81.1%
15.1%
3.7%
Military ID
75.8%
20.3%
3.9%
Student/school ID card
24.4%
49.5%
26.1%
Social Security number
3.6%
43.7%
52.7%
Matrícula Consular
20.5%
17.7%
61.9%
Individual Taxpayer
Identification Number (ITIN)
1.3%
30.3%
68.4%
Utility bills/payments
0.6%
27.9%
71.5%
Employer letters/pay stub
2.5%
24.3%
73.2%
Housing lease
1.1%
16.3%
82.6%
Other:
22.9%
45.8%
31.3%
Almost all (91.9 percent) banks accept driver’s licenses as a primary form of identification when
cashing checks for non-customers.
148
Services Provided to Non-Customers
QIVC. Figure 1. Does the bank accept a driver’s license as a form of ID to cash a check for a non-customer?
Valid
Not accepted
Frequency
4
Weighted
Frequency
34
594
6509
91.9
54
542
7.7
652
7085
100.0
33
354
685
7440
Primary ID
Secondary ID
Total
Missing
System
Total
Weighted
Percent
.5
There are no differences among regions for banks accepting driver’s licenses as a form of
identification.
There is a difference between tiers for banks accepting a driver’s license as a form of identification.
Tier 1 (77.3 percent as primary, 22.7 percent as secondary) is different from Tier 2 (90.1 percent and
8.6 percent, respectively) and Tier 3 (92.1 percent and 7.5 percent, respectively).
QIVC. Figure 2. Tier
Does the bank accept a driver’s license as a
form of ID to cash a check for a non-customer?
Tier 1
Not accepted
Count
%
Primary ID
Count
%
Secondary ID
Count
%
Total
Count
%
Tier 2
Tier 3
0
7
27
.0%
1.3%
.4%
18
475
6016
77.3%
90.1%
92.1%
5
45
492
22.7%
8.6%
7.5%
23
527
6535
100.0%
100.0%
100.0%
There is not a difference between urban and rural banks for banks accepting driver’s licenses as a
form of identification.
Most banks (85.7 percent) accept state IDs as a primary form of identification for non-customers
when cashing checks.
QIVC. Figure 3. Does the bank accept a state ID as a form of ID to cash a check for a non-customer?
Valid
Not accepted
Primary ID
Secondary ID
Total
Missing
Total
System
Frequency
10
Weighted
Frequency
116
Weighted
Percent
1.6
553
6040
85.7
85
895
12.7
648
7051
100.0
37
389
685
7440
149
Services Provided to Non-Customers
There are no differences among tiers or regions for banks accepting a state identification as a form
of ID.
There is not a difference between urban and rural banks for banks accepting a state identification as
a form of ID.
Only 3.6 percent of banks accept Social Security numbers as a primary form of identification for
non-customers when cashing checks.
QIVC. Figure 4. Does the bank accept a social security number as a form of ID to cash a check for a noncustomer?
Valid
Not accepted
Frequency
324
Weighted
Frequency
3399
Weighted
Percent
52.7
3.6
Primary ID
Missing
18
233
Secondary ID
252
2816
43.7
Total
594
6448
100.0
91
992
685
7440
System
Total
There are no differences among regions for banks accepting a Social Security number as a form of
identification for non-customers.
There is a difference between tiers for banks accepting a Social Security number as a form of
identification. A larger percentage (81.0 percent) of Tier 1 banks do not accept a Social Security
number, compared with 58.0 percent and 52.2 percent of Tiers 2 and 3, respectively.
QIVC. Figure 5. Tier
Does the bank accept a Social Security number
as a form of ID to cash a check for a noncustomer?
Tier 1
Not accepted
Count
%
Primary ID
Count
%
Secondary ID
Count
%
Total
Count
%
18
Tier 2
277
Tier 3
3104
81.0%
58.0%
52.2%
1
0
232
4.8%
.0%
3.9%
3
201
2611
14.3%
42.0%
43.9%
22
479
5947
100.0%
100.0%
100.0%
There is not a difference between urban and rural banks for banks accepting a Social Security
number as a form of identification for non-customers.
150
Services Provided to Non-Customers
Most banks (81.1 percent) accept U.S. and foreign passports as a primary form of identification for
non-customers when cashing checks.
QIVC. Figure 6. Does the bank accept a passport as a form of ID to cash a check for a non-customer?
Valid
Not accepted
Primary ID
Secondary ID
Total
Missing
System
Total
Frequency
22
Weighted
Frequency
260
Weighted
Percent
3.7
527
5636
81.1
91
1051
15.1
640
6946
100.0
45
493
685
7440
There are minimal differences between regions or tiers for banks accepting a passport as a form of
identification for non-customers.
There is not a difference between urban and rural banks for banks accepting passports as a form of
identification for non-customers.
Three quarters (75.8 percent) of banks accept military ID as a primary form of identification for
non-customers when cashing checks.
QIVC. Figure 7. Does the bank accept a Military ID as a form of ID to cash a check for a non-customer?
Valid
Missing
Total
Frequency
22
Weighted
Frequency
270
Weighted
Percent
3.9
Primary ID
484
5208
75.8
Secondary ID
128
1391
20.3
Total
634
6870
100.0
51
570
685
7440
Not accepted
System
There are no differences among regions for banks accepting military identification for noncustomers.
151
Services Provided to Non-Customers
There is a difference between tiers for banks accepting military identification. Over half (59.1
percent) of Tier 1 banks accept a military ID as primary identification, compared with 81.9 percent
of Tier 2 and 75.4 percent of Tier 3.
QIVC. Figure 8. Tier
Does the bank accept a military ID as a form of
ID to cash a check for a non-customer?
Tier 1
Not accepted
Count
%
Primary ID
Count
%
Secondary ID
Count
%
Total
Count
%
Tier 2
Tier 3
0
10
260
.0%
2.0%
4.1%
14
423
4772
59.1%
81.9%
75.4%
9
83
1299
40.9%
16.1%
20.5%
23
517
6330
100.0%
100.0%
100.0%
There is not a difference between urban and rural banks for banks accepting military identification
for non-customers.
About a quarter (24.4 percent) of banks accept student IDs as a primary form of identification for
non-customers when cashing checks.
QIVC. Figure 9. Does the bank accept a student ID as a form of ID to cash a check for a non-customer?
Valid
Missing
Total
Frequency
161
Weighted
Frequency
1717
Weighted
Percent
26.1
Primary ID
140
1611
24.4
Secondary ID
308
3261
49.5
Total
609
6589
100.0
Not accepted
System
76
851
685
7440
There are no differences among regions or tiers for banks accepting student identification for noncustomers.
There is not a difference between urban and rural banks for banks accepting a student identification
card for non-customers.
152
Services Provided to Non-Customers
Only 2.5 percent of banks will accept a letter from an employer as ID to cash checks for noncustomers.
QIVC. Figure 10. Does the bank accept an employer letter as a form of ID to cash a check for a noncustomer?
Valid
Not accepted
Primary ID
Missing
Frequency
435
Weighted
Frequency
4582
Weighted
Percent
73.2
2.5
12
154
Secondary ID
136
1520
24.3
Total
583
6257
100.0
System
102
1183
685
7440
Total
There are no differences among regions or tiers for banks accepting an employer letter as a form of
identification for non-customers.
There is not a difference between urban and rural banks for banks accepting an employer letter as a
form of identification for non-customers.
Less than one-quarter (20.5 percent) of banks accept Matrícula Consular cards as a primary form of
identification for non-customers when cashing checks.
QIVC. Figure 11.
Valid
Missing
Total
Does the bank accept a Matrícula Consular card as a form of ID to cash a check for a noncustomer?
Frequency
323
Weighted
Frequency
3700
Weighted
Percent
61.9
Primary ID
131
1224
20.5
Secondary ID
109
1057
17.7
Total
563
5981
100.0
System
122
1459
685
7440
Not accepted
153
Services Provided to Non-Customers
There are differences among regions for banks accepting a Matrícula Consular card as a primary or
secondary form of identification for non-customers. Acceptance of the Matrícula Consular is highest
in the Pacific (68.2 percent) and West South Central (55.1 percent) regions and is lowest in the
Mountain (22.8 percent) and Mid Atlantic (24.2 percent) regions.
QIVC. Figure 12. Region
Does the bank accept a Matricula Consular Card as a form of ID to cash a check for a noncustomer?
East
West
East
West
South
South
North
North
New
MidSouth
England Atlantic
Atlantic
Central
Central
Central
Central Mountain Pacific
Not
accepted
Count
%
Primary ID
459
375
424
677
725
328
130
67.5%
75.8%
63.9%
73.2%
44.9%
62.4%
67.0%
77.2%
31.8%
41
59
118
34
339
222
192
66
152
12.2%
12.7%
16.5%
6.7%
35.9%
20.5%
17.7%
15.6%
37.0%
68
54
142
103
181
186
165
31
128
20.3%
11.5%
19.7%
20.1%
19.2%
17.1%
15.3%
7.2%
31.2%
Count
%
Total
354
Count
%
Secondary
ID
227
Count
%
336
467
719
512
944
1085
1082
425
410
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks accepting Matrícula Consular card as a form of
identification for non-customers. Specifically, a greater percentage of Tier 2 banks accept it (54.6
percent) compared with Tier 3 banks (36.5 percent).
QIVC. Figure 13. Tier
Does the bank accept a Matrícula Consular
Card as a form of ID to cash a check for a noncustomer?
Tier 1
Not accepted
Count
%
Primary ID
Count
%
Secondary ID
Count
%
Total
Count
%
5
Tier 2
222
Tier 3
3473
22.7%
45.4%
63.5%
11
146
1066
50.0%
29.8%
19.5%
6
121
930
27.3%
24.8%
17.0%
23
489
5469
100.0%
100.0%
100.0%
There is little difference between urban and rural banks for banks accepting a Matrícula Consular
card as a form of identification for non-customers.
154
Services Provided to Non-Customers
Only 0.6 percent of banks accept utility bills as a primary form of identification for non-customers
when cashing checks.
QIVC. Figure 14.
Valid
Does the bank accept a utility bill as a form of ID to cash a check for a non-customer?
Not accepted
Primary ID
Missing
Frequency
417
Weighted
Frequency
4535
Weighted
Percent
71.5
3
41
.6
Secondary ID
167
1766
27.9
Total
587
6342
100.0
98
1098
685
7440
System
Total
There are no differences among regions or tiers for banks not accepting a utility bill as a form of ID
for non-customers.
There is not a difference between urban and rural banks for banks not accepting a utility bill as a
form of ID for non-customers.
A small percentage (1.1 percent) of banks accept housing leases as a primary form of identification
for non-customers when cashing checks.
QIVC. Figure 15.
Valid
Does the bank accept a housing lease as a form of ID to cash a check for a noncustomer?
Not accepted
Primary ID
Total
Weighted
Frequency
5125
Weighted
Percent
82.6
5
68
1.1
92
1008
16.3
Total
576
6202
100.0
System
109
1238
685
7440
Secondary ID
Missing
Frequency
479
There are no differences among regions or tiers for banks accepting a housing lease as a form of
identification for non-customers.
There is not a difference between urban and rural banks for banks accepting a housing lease as a
form of identification for non-customers.
155
Services Provided to Non-Customers
Only 1.3 percent of banks accept Individual Taxpayer Identification Numbers (ITINs) as a primary
form of identification for non-customers when cashing checks, and 30.3 percent of banks accept it
as a secondary form of ID.
QIVC. Figure 16.
Valid
Does the bank accept an ITIN number as a form of ID to cash a check for a non-customer?
Not accepted
Primary ID
Missing
Frequency
396
Weighted
Frequency
4281
Weighted
Percent
68.4
10
83
1.3
Secondary ID
176
1899
30.3
Total
582
6263
100.0
System
103
1176
685
7440
Total
There are no differences among regions or tiers for banks accepting an ITIN as a form of
identification for non-customers.
There is not a difference between urban and rural banks for banks accepting an ITIN as a form of
identification for non-customers.
Under a quarter (22.9 percent) of banks report that they will accept other forms of identification for
check cashing for a non-customer.
QIVC. Figure 17.
Valid
Does the bank accept any other forms of ID to cash a check for a non-customer?
Not accepted
Primary ID
Secondary ID
Missing
Total
Frequency
31
Weighted
Frequency
299
Weighted
Percent
31.3
35
219
22.9
45
437
45.8
Total
111
955
100.0
System
574
6484
685
7440
An alien identification or green card is mentioned 27 times under “other” forms of ID that are
accepted. Out of the 27 mentions, 18 banks report accepting it as primary identification, and 12
accept it as secondary identification.
Thirteen banks identify credit cards as acceptable identification, with one bank indicating that it
could be used as primary ID in certain circumstances, and nine banks reporting that credit cards
could be used as secondary identification.
Tribal identifications are mentioned nine times. Seven banks indicate that tribal identifications are an
acceptable primary identification, and one bank accepts it as secondary identification.
156
Services Provided to Non-Customers
Question IVC-1. Does the bank issue check cashing cards to individuals who
do not have an account relationship?
Yes
No
Two percent of banks offer check cashing cards to individuals who do not have an account
relationship with the bank.
QIVC-1. Figure 1. Do you offer check cashing cards?
Valid
Frequency
656
Weighted
Frequency
7122
Weighted
Percent
98.0
Yes
14
146
2.0
Total
670
7268
100.0
15
172
685
7440
No
Missing
System
Total
There are differences among regions for banks that offer check cashing cards. New England (12.7
percent) is different from the South Atlantic, East South Central, Mountain, and Pacific regions (all
0.0 percent).
QIVC-1. Figure 2. Region
No
Count
%
Yes
Count
%
Total
Count
%
Do you offer check cashing cards?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
860
652
1115
1246
1383
New
England
377
MidAtlantic
562
87.3%
99.8%
100.0%
100.0%
94.8%
98.8%
55
1
0
0
62
15
12.7%
.2%
.0%
.0%
5.2%
1.2%
Mountain
466
Pacific
460
99.0%
100.0%
100.0%
14
0
0
1.0%
.0%
.0%
432
563
860
652
1177
1261
1396
466
460
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are few differences among tiers or regions for banks that offer check cashing cards to
individuals without an account relationship with the bank.
There is little difference between urban and rural banks for banks that offer check cashing cards to
individuals without an account relationship with the bank.
157
Services Provided to Non-Customers
Question IVC-2. Which of the following techniques or technology does your
bank use to verify the identity of individuals who do not have an account
relationship for check cashing?
Fingerprinting
Biometrics
None
Other: _____
Fingerprinting and biometric technology are not commonly used by banks to verify the identity of
individuals who do not have a relationship with the bank to cash checks. Only 17.0 percent of banks
use fingerprinting, and 0.2 percent use biometrics.
QIVC-2. Figure 1. Fingerprinting
Valid
No
Yes
Total
Missing System
Total
QIVC-2. Figure 3. None
Weighted Weighted
Frequency Frequency Percent
519
5870
83.0
135
1199
654
7069
31
370
685
7440
Valid
17.0
Yes
373
4239
59.9
100.0
Total
655
7070
100.0
30
369
685
7440
Missing System
Total
QIVC-2. Figure 2. Biometrics
Valid
No
Yes
Total
Missing System
Total
No
Weighted Weighted
Frequency Frequency Percent
282
2832
40.1
QIVC-2. Figure 4. Other
Weighted Weighted
Frequency Frequency Percent
653
7053
99.8
2
17
.2
655
7070
100.0
30
369
685
7440
Valid
No
Yes
132
1433
20.3
Total
654
7057
100.0
Missing System
Total
Weighted Weighted
Frequency Frequency Percent
522
5624
79.7
31
383
685
7440
Among the banks reporting “other” techniques or technologies to verify the identity of individuals
who do not have an account relationship for check cashing, 88 reported asking for one to two forms
of identification and 17 reported conducting an OFAC check.
There are differences among regions for banks that use fingerprinting and banks that do not use
anything to verify the identity of individuals who do not have an account relationship for check
cashing.
158
Services Provided to Non-Customers
There are differences in the use of fingerprinting between the Mid Atlantic region (0.2 percent) and
New England (0.2 percent) compared with the West South Central (23.6 percent) and East North
Central (20.3 percent) regions.
QIVC-2. Figure 5. Region: Fingerprinting
No
New
England
417
MidAtlantic
521
South
Atlantic
652
99.8%
99.8%
81.0%
86.9%
76.4%
1
1
153
84
264
%
.2%
.2%
19.0%
13.1%
Count
418
522
805
642
100.0%
100.0%
100.0%
100.0%
Count
%
Yes
Total
Fingerprinting
West
East
South
North
Central
Central
855
1002
East
South
Central
557
Count
%
West
North
Central
1122
Mountain
397
Pacific
347
79.7%
81.3%
82.8%
77.5%
256
258
82
101
23.6%
20.3%
18.7%
17.2%
22.5%
1119
1257
1379
479
448
100.0%
100.0%
100.0%
100.0%
100.0%
For “none,” there are differences between the West South Central (52.3 percent), East North
Central (52.7 percent), and New England (82.6 percent) regions.
QIVC-2. Figure 6. Region: None
No
Count
%
Yes
Count
%
Total
Count
%
New
England
73
MidAtlantic
200
South
Atlantic
332
East
South
Central
211
17.4%
38.2%
41.2%
32.9%
None
West
South
Central
534
East
North
Central
595
West
North
Central
541
Mountain
159
Pacific
187
47.7%
47.3%
39.3%
33.0%
41.8%
345
323
473
431
585
662
838
321
260
82.6%
61.8%
58.8%
67.1%
52.3%
52.7%
60.7%
67.0%
58.2%
418
522
805
642
1119
1257
1379
480
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
The use of fingerprinting by banks to verify identification for individuals who do not have account
relationships differs by tier. Tier 1 banks (43.5 percent) use fingerprinting more than Tier 2 (32.9
percent) and Tier 3 (15.5 percent) banks.
QIVC-2. Figure 7. Tier: Fingerprinting/Biometrics
Techniques Used for Verifying Non-Customer Identification
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
Fingerprinting
14
Biometrics
25
Fingerprinting
361
Biometrics
534
Fingerprinting
5496
Biometrics
6494
56.5%
100.0%
67.1%
99.4%
84.5%
99.8%
10
0
177
3
1012
14
43.5%
.0%
32.9%
.6%
15.5%
.2%
24
25
538
538
6508
6508
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
159
Services Provided to Non-Customers
For banks that report no use of technology, there is a difference between Tier 2 (46.5 percent) and
Tier 3 (61.1 percent).
QIVC-2. Figure 8. Tier: None/Other
Techniques Used for Verifying Non-Customer Identification
Tier 1
None
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Other
Tier 3
15
23
None
288
Other
420
None
2529
Other
5182
58.3%
91.7%
53.5%
78.1%
38.9%
79.8%
10
2
250
118
3979
1313
41.7%
8.3%
46.5%
21.9%
61.1%
20.2%
25
25
538
538
6508
6494
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks that use fingerprinting and those that do not
use anything to verify non-customer identity for check cashing. One-fifth (20.7 percent) of urban
banks use fingerprinting, compared with 13.7 percent of rural banks. Almost two-thirds (63.9
percent) of rural banks do not use anything, compared with 55.3 percent of urban banks.
QIVC-2. Figure 9. Urban/Rural
Techniques Used for Verifying Non-Customer Identification
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Fingerprinting
3272
Biometrics
3778
None
1368
Other
2995
Fingerprinting
2598
Biometrics
3275
None
1464
Other
2629
86.3%
99.6%
36.1%
79.0%
79.3%
99.9%
44.7%
80.5%
520
14
2424
797
679
3
1814
636
13.7%
.4%
63.9%
21.0%
20.7%
.1%
55.3%
19.5%
3792
3792
3792
3792
3278
3279
3279
3265
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
160
Services Provided to Non-Customers
Transaction Products Offered and Fees
Almost two-thirds of banks do not offer bank checks and money orders for non-customers. Banks
typically charge higher fees to non-customers than to customers for all categories, with the exception
of bill payment dollar fees and international remittance dollar fees. Both of these fee categories have
a relatively small number of respondents, which may lead to a larger error range than for other
categories. Both percentage and per-item fees may be charged, contributing to various types of fee
structures and policies at different banks.
Question IVD. Which of the following transaction products/services does
the bank offer to individuals who do not have an account relationship with
your bank, and what would the fees be if they were customers with
established deposit accounts?
For a Non-Customer
Yes
Product/Service
For Customer
If a fee is a
percentage of the
dollar amount,
please indicate
the typical
percentage rate .
If a fixed fee is
Offer for Non- charged per
Deposit
item please
Customers?
indicate the
typical fee.
If a fixed fee is
charged per
item please
indicate the
typical fee.
If a fee is a
percentage of the
dollar amount,
please indicate
the typical
percentage rate .
Bank/official checks
37.3%
$5.99
2.10%
$4.63
0.35%
Money orders
37.3%
$3.22
0.65%
$2.70
0.49%
Domestic wire transfers
22.9%
$21.30
7.50%
$17.90
0.08%
International remittances (not
ACH)
6.2%
$39.04
4.00%
$42.48
0.10%
International ACH transfers
1.4%
-
-
$12.48
0.50%
Foreign currency exchange
10.7%
$8.83
2.20%
$8.19
1.17%
Bill payment (e.g., utility)
11.5%
$0.28
0.17%
$1.48
0.07%
Reloadable prepaid debit cards
(Visa, MasterCard, etc.)
12.5%
$5.88
1.00%
$4.76
0.20%
When considering only those banks that offer these products and services to non-customers, peritem fees are typically lower for customers than that charged by the general, overall population of
banks that report customer fees.
If offer for Non-Customer, for Customer
Product/Service
Offer for Non-Deposit If a fixed fee is
charged per item
Customers?
please indicate the
typical fee.
If a fee is a percentage of the
dollar amount, please indicate
the typical percentage rate.
Bank/official checks
37.3%
$4.32
0.45%
Money orders
37.3%
$2.68
0.50%
Domestic wire transfers
22.9%
$17.46
-
International remittances (not ACH)
6.2%
$33.87
-
International ACH transfers
1.4%
-
-
Foreign currency exchange
10.7%
$7.52
2.36%
Bill payment (e.g., utility)
11.5%
$0.59
0.17%
Reloadable prepaid debit cards
(Visa, MasterCard, etc.)
12.5%
$5.16
1.00%
161
Services Provided to Non-Customers
QIVD. Figure 1. Mean Fixed Fees per Transaction
Bank/Official Checks
Product/Service
$4.63
$2.70
Customers
Money Orders
$17.90
$42.48
$12.48
$8.19
International Remittances
$1.48
$4.76
International ACH Transfers
Foreign Currency Exchange
$5.99
$3.22
NonCustomers
Domestic Wire Transfers
Bill Payment
$21.30
Prepaid Cards
$39.04
$8.83
$0.28
$5.88
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
Fee
Product/Service
QIVD. Figure 2. Mean Percentage of Transaction Fees (If priced as a percent of value)
0.35%
0.49%
0.08%
Customers 0.10%
0.50%
1.17%
0.07%
0.20%
0.65%
2.10%
7.50%
4.00%
Non-Customers
Bill Payment
Prepaid Cards
2.20%
0.17%
1.00%
0.00%
2.00%
4.00%
Bank/Official Checks
Money Orders
Domestic Wire Transfers
International Remittances
International ACH Transfers
Foreign Currency Exchange
6.00%
8.00%
Fee
162
Services Provided to Non-Customers
Over a third (37.3 percent) of banks offer bank/official checks for non-deposit customers.
QIVD. Figure 3. Do you offer bank/official checks for non-deposit customers?
Valid
Frequency
425
Weighted
Frequency
4519
Weighted
Percent
62.7
Yes
242
2685
37.3
Total
667
7204
100.0
18
236
685
7440
No
Missing
System
Total
There are differences among regions for banks that offer bank/official checks to non-customers.
There is a difference between the Mid Atlantic region (12.4 percent) and the West South Central
(42.8 percent), East North Central (40.2 percent), and West North Central (53.7 percent) regions.
QIVD. Figure 4. Region
No
Count
%
Yes
87.6%
67.4%
65.3%
57.2%
59.8%
46.3%
70.6%
72
72
280
222
493
507
742
137
160
17.2%
12.4%
32.6%
34.7%
42.8%
40.2%
53.7%
29.4%
35.7%
Count
%
Pacific
288
82.8%
Count
%
Total
New
England
347
Do you offer bank/official checks for non-deposit customers?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
505
579
419
657
754
641
329
64.3%
418
577
860
642
1150
1261
1383
466
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is not a difference between tiers for banks that offer official checks to non-customers.
The median per-item fee for bank checks for both customers and non-customers is $5.00. However,
the mean is higher for non-customers ($5.99) than for customers ($4.63).
QIVD. Figure 5. Non-Customer Fee Statistics
Weighted
N
Valid
Missing
Bank Checks
Bank Checks
Non-Customer
Fee
Non-Customer %
2463
110
222
2574
Mean
$5.9876
2.1049
Median
$5.0000
1.0000
Mode
$5.00
1.00
Minimum
$1.00
.00
Maximum
$25.00
10.00
163
Services Provided to Non-Customers
Nearly two-thirds (62.7 percent) of banks do not offer money orders to non-customers.
QIVD. Figure 7. Do you offer money orders for non-deposit customers?
Valid
Frequency
421
Weighted
Frequency
4454
Weighted
Percent
62.7
Yes
235
2650
37.3
Total
656
7105
100.0
29
335
685
7440
No
Missing
System
Total
There are differences among regions for banks that offer money orders to non-customers. There is
a difference between the East North Central region (54.0 percent) and the South Atlantic (21.0
percent) and Pacific (16.9 percent) regions, as well as between the West North Central region (61.3
percent) and the New England (27.0 percent), Mid Atlantic (27.6 percent), South Atlantic (21.0
percent), East South Central (12.7 percent), West South Central (31.6 percent) and Pacific (16.9
percent) regions.
QIVD. Figure 8. Region
No
Count
New
England
305
MidAtlantic
408
73.0%
72.4%
79.0%
87.3%
68.4%
46.0%
113
155
174
75
363
688
27.0%
27.6%
21.0%
12.7%
31.6%
418
563
829
594
1146
100.0%
100.0%
100.0%
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
Do you offer money orders for non-deposit customers?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
655
519
784
586
524
Mountain
301
Pacific
372
38.7%
63.2%
83.1%
831
176
75
54.0%
61.3%
36.8%
16.9%
1274
1355
476
448
100.0%
100.0%
100.0%
100.0%
There is not a difference between tiers for banks that offer money orders to non-customers.
The mean per-item fee for money orders is higher for non-customers ($3.22) than for customers
($2.70).
QIVD. Figure 9. Money Order Fees
Weighted
N
Valid
Missing
QIVD. Figure 10. Money Order Fees
Money Order Non- Money Order
Customer Fee
Non-Customer %
2469
42
181
2608
Mean
$3.2204
.6501
Median
$3.0000
1.0000
$2.00
1.00
Mode
Minimum
$1.00
Maximum
$15.00
Weighted
N
Valid
Missing
Money Order
Customer Fee
3645
Money Order
Customer %
151
3795
7288
Mean
$2.7022
.4875
Median
$2.0000
.4000
$2.00
.00
Mode
.00
Minimum
$.00
.00
1.00
Maximum
$20.00
1.00
164
Services Provided to Non-Customers
About one-quarter (22.9 percent) of banks offer domestic wire transfers for non-customers.
QIVD. Figure 11.
Valid
Do you offer domestic wire transfers for non-deposit customers?
Frequency
520
Weighted
Frequency
5546
Yes
144
1648
22.9
Total
664
7193
100.0
21
246
685
7440
No
Missing
System
Total
Weighted
Percent
77.1
There are differences among regions for banks that offer domestic wire transfers to non-customers.
There is a difference between the West North Central region (33.7 percent) and the Mid Atlantic
(8.4 percent), Pacific (10.8 percent), and South Atlantic (14.4 percent) regions .
QIVD. Figure 12.
No
Count
New
England
329
%
Yes
Pacific
400
91.6%
85.6%
79.2%
74.4%
73.2%
66.3%
75.1%
75
48
124
130
294
342
470
116
48
18.6%
8.4%
14.4%
20.8%
25.6%
26.8%
33.7%
24.9%
10.8%
Count
%
Do you offer domestic wire transfers for non-deposit customers?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
526
735
495
855
932
923
350
81.4%
Count
%
Total
Region
89.2%
405
574
860
625
1150
1274
1393
466
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is not a difference between tiers for banks that offer domestic wire transfers to noncustomers.
Mean fees for domestic wire transfers for non-customers are $21.30, compared with $17.90 for
customers.
QIVD. Figure 13.
QIVD. Figure 14.
Domestic Wire Transfer Fees
Domestic Wire Transfer Fees
Domestic Wire
Transfer NonCustomer Fee
1480
Domestic Wire
Transfer NonCustomer %
27
168
1620
3477
7353
Mean
$21.3021
7.5000
Mean
$17.8961
.0838
Median
$20.0000
7.5000
Median
$16.0000
.0000
Weighted
N
Valid
Missing
Mode
Weighted
N
Valid
Missing
Mode
Domestic Wire
Transfer
Customer Fee
3963
Domestic Wire
Transfer
Customer %
87
$20.00
.00(a)
$15.00
.00
$2.00
.00
Minimum
$.00
.00
$50.00
15.00
Multiple modes exist. The smallest value is shown.
Maximum
$100.00
.50
Minimum
Maximum
165
Services Provided to Non-Customers
Few (6.2 percent) banks offer international remittances for non-customers.
QIVD. Figure 15.
Valid
Do you offer international remittances for non-deposit customers?
Frequency
602
No
Missing
Weighted
Frequency
6562
Weighted
Percent
93.8
Yes
46
433
6.2
Total
648
6995
100.0
37
445
685
7440
System
Total
There are differences among regions for banks that offer international remittances to noncustomers. A lower percentage of banks in the Mid Atlantic offer international remittances to noncustomers than banks in the Pacific region.
QIVD. Figure 16.
No
Count
New
England
377
%
Yes
Pacific
400
97.0%
93.0%
95.0%
95.6%
92.9%
92.2%
96.2%
90.6%
27
17
59
31
48
89
104
17
41
6.1%
3.0%
7.0%
5.0%
4.4
7.1%
7.8%
3.8%
8.9%
405
574
846
611
1095
1244
1328
453
441
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Do you offer international remittances for non-deposit customers?
East
West
East
West
Mid
South
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
557
787
580
1047
1155
1224
435
93.2%
Count
%
Total
Region
There is a difference between tiers for banks that offer international remittances to non-customers.
A higher percentage of Tier 1 banks offer them (20.8 percent), compared with 8.5 percent of Tier 2
and 5.9 percent of Tier 3.
QIVD. Figure 17.
Tier
Do you offer international remittances for nondeposit customers?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
20
Tier 2
486
Tier 3
6057
79.2%
91.5%
94.1%
5
45
383
20.8%
8.5%
5.9%
25
531
6440
100.0%
100.0%
100.0%
The median per-item fee for international remittances for non-customers is $35.00, and for
customers it is $40.00. However, fewer banks are willing to provide international remittances for
non-customers, so these two prices are not directly comparable.
166
Services Provided to Non-Customers
QIVD. Figure 19.
QIVD. Figure 18.
Weighted
N
International Remittance Fees
International Remittance Fees
Valid
Missing
International
Remittances
Non-Customer
Fee
399
Weighted
N
Valid
Missing
34
International
Remittances
Customer Fee
1891
International
Remittances
Customer
Percent
75
5549
7364
Mean
$42.4821
.0963
$40.0000
.0000
Mean
$39.0438
Median
Median
$35.0000
Mode
$50.00
.00
$40.00
Minimum
$.00
.00
Minimum
$7.00
Maximum
$500.00
.50
Maximum
$75.00
Mode
167
Services Provided to Non-Customers
Only 1.4 percent of banks offer international ACH transfers for non-customers.
QIVD. Figure 20.
Valid
Do you offer international ACH transfers for non-deposit customers?
No
Yes
Total
Missing
System
Total
Frequency
636
Weighted
Frequency
6872
Weighted
Percent
98.6
8
99
1.4
644
6971
100.0
41
469
685
7440
There are few differences among regions or tiers for banks that offer international ACH transfers to
non-customers.
Only four banks provide pricing information for international ACH non-customer fees, so the data
are not conclusive for non-customer fees.
QIVD. Figure 21 International ACH Fees
Weighted
N
Valid
International
ACH NonCustomer Fee
44
International
ACH NonCustomer %
0
55
99
Missing
Mean
QIVD. Figure 22 International ACH Fees
Weighted
N
Valid
6913
7371
$12.4766
.5000
$.0000
.0000
$.00
.00
Missing
$13.4258
$4.0000
Median
Mode
$2.00(a)
Mode
Maximum
International
ACH
Customer %
68
Mean
Median
Minimum
International
ACH Customer
Fee
527
$2.00
Minimum
$.00
.00
$50.00
Maximum
$65.00
2.50
Multiple modes exist. The smallest value is shown.
About a tenth (10.7 percent) of banks report that they offer foreign currency exchange for noncustomers.
QIVD. Figure 23 Do you offer foreign currency exchange for non-deposit customers?
Valid
Missing
Total
Frequency
565
Weighted
Frequency
6293
Weighted
Percent
89.3
Yes
87
757
10.7
Total
652
7050
100.0
33
390
685
7440
No
System
168
Services Provided to Non-Customers
There are differences among regions for banks that offer foreign currency exchange to noncustomers. A smaller percentage of Mid Atlantic (5.7 percent) and South Atlantic (4.3 percent)
banks offer currency exchange than Mountain (23.7 percent) and New England (19.9 percent)
banks.
QIVD. Figure 24 Region
Do you offer foreign currency exchange for non-deposit customers?
No
Count
New
England
335
MidAtlantic
512
South
Atlantic
783
East
South
Central
548
West
South
Central
1023
East
North
Central
1143
West
North
Central
1207
Mountain
345
Pacific
396
80.1%
94.3%
95.7%
91.8%
90.3%
89.9%
88.2%
76.3%
88.5%
83
31
35
49
110
128
162
107
52
19.9%
5.7%
4.3%
8.2%
9.7%
10.1%
11.8%
23.7%
11.5%
418
543
819
597
1133
1271
1369
453
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
%
Yes
Count
%
Total
Count
%
There are differences among tiers for banks that offer foreign currency exchange to non-customers.
There is a difference between Tier 1 (41.7 percent) and Tier 3 (9.9 percent), and between Tier 2
(19.6 percent) and Tier 3.
QIVD. Figure 25 Tier
Do you offer foreign currency exchange for nondeposit customers?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
15
Tier 2
427
Tier 3
5852
58.3%
80.4%
90.1%
10
104
643
41.7%
19.6%
9.9%
25
531
6494
100.0%
100.0%
100.0%
The median per-item fee for non-customers ($10.00) for foreign currency exchange is higher than
for customers ($7.00).
QIVD. Figure 26 Currency Exchange Fee
Weighted
N
Valid
QIVD. Figure 27 Currency Exchange Fee
Foreign
Currency
Exchange NonCustomer Fee
340
Foreign
Currency
Exchange NonCustomer %
percent
83
417
674
$8.8270
Weighted
N
Valid
Missing
Foreign
Currency
Exchange
Customer Fee
960
Foreign
Currency
Exchange
Customer %
275
6479
7165
Mean
$8.1946
1.1713
2.2012
Median
$7.0000
1.0000
$10.0000
1.0000
Mode
$.00
.00
$10.00
1.00
Minimum
Minimum
$.00
.00
$.00
.00
Maximum
Maximum
$45.00
8.00
$35.00
10.00
Missing
Mean
Median
Mode
169
Services Provided to Non-Customers
Few banks (11.5 percent) offer bill payment services to non-customers.
QIVD. Figure 28 Do you offer bill pay for non-deposit customers?
Valid
Frequency
572
Weighted
Frequency
6229
Weighted
Percent
88.5
Yes
79
808
11.5
Total
651
7036
100.0
34
404
685
7440
No
Missing
System
Total
A greater percentage of East North Central (21.9 percent) banks and East South Central (19.8
percent) banks offer bill payment to non-customers than Pacific (3.1 percent), Mountain (3.1
percent), and New England (3.3 percent) banks.
QIVD. Figure 29 Region
No
Count
New
England
405
MidAtlantic
478
96.7%
87.5%
%
Yes
Count
80.2%
90.7%
78.1%
Pacific
431
96.9%
96.9%
89.2%
14
69
51
117
106
279
144
14
14
12.5%
6.1%
19.8%
9.3%
21.9%
10.8%
3.1%
3.1%
418
546
846
594
1146
1274
1328
439
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
93.9%
Mountain
425
3.3%
%
Total
Do you offer bill pay for non-deposit customers?
East
West
East
West
South
South
South
North
North
Central
Central
Central
Central
Atlantic
794
476
1040
995
1184
There is little difference between tiers for banks that offer bill payment to non-customers.
For bill pay, the mean per-item fee of 0.17 percent for non-customers is higher than that for
customers (0.07 percent) among banks that responded.
QIVD. Figure 30 Bill Pay Fees
Weighted
N
Valid
Missing
QIVD. Figure 31
Bill pay NonCustomer Fee
261
Bill pay NonCustomer %
41
546
766
Weighted
N
Bill Pay Fees
Valid
Missing
Mean
$.2805
.1667
Mean
Median
$.0000
.0000
Median
Bill pay
Bill pay
Customer Fee Customer %
956
103
6484
7337
$1.4791
.0666
$.0000
.0000
Mode
$.00
.00
Mode
$.00
.00
Minimum
$.00
.00
Minimum
$.00
.00
Maximum
$9.95
.50
Maximum
$30.00
.50
170
Services Provided to Non-Customers
Only 12.5 percent of banks offer prepaid cards to non-customers.
QIVD. Figure 32 Do you offer prepaid cards for non-deposit customers?
Valid
Frequency
559
Weighted
Frequency
6038
Weighted
Percent
87.5
Yes
79
864
12.5
Total
638
6902
100.0
47
538
685
7440
No
Missing
System
Total
There are differences among regions for banks that offer prepaid cards to non-customers. The West
South Central region has the highest rate with 22.1 percent of banks offering prepaid cards to noncustomers, while 0.2 percent of banks in New England offer them.
QIVD. Figure 33 Region
No
Count
%
Yes
New
England
417
MidAtlantic
501
99.8%
96.5%
93.4%
92.5%
77.9%
85.3%
1
18
55
46
250
183
.2%
3.5%
6.6%
7.5%
22.1%
14.7%
Count
%
Total
Count
%
Do you offer prepaid cards for non-deposit customers?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
778
562
879
1063
1068
Mountain
377
Pacific
393
83.9%
86.0%
89.8%
205
62
44
16.1%
14.0%
10.2%
418
519
832
608
1129
1246
1273
439
437
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are few differences among tiers for banks that offer prepaid cards to non-customers.
The median per-item fee for prepaid cards for non-customers ($5.00) is higher than for customers
($4.00).
QIVD. Figure 34 Prepaid Card Fees
Weighted
N
Valid
Missing
Prepaid
Cards NonCustomer
Fee
680
Prepaid
Cards NonCustomer %
14
184
850
Mean
$5.8827
Median
$5.0000
Mode
QIVD. Figure 35 Prepaid Card Fees
Weighted
N
Valid
Missing
Prepaid
Cards
Customer
Fee
1043
Prepaid Cards
Customer %
68
6397
7371
1.0000
Mean
$4.7603
.2000
1.0000
Median
$4.0000
.0000
$.00
.00
$5.00
1.00
Mode
Minimum
$.00
1.00
Minimum
$.00
.00
Maximum
$15.00
1.00
Maximum
$15.00
1.00
171
Services Provided to Non-Customers
There are differences between urban and rural banks for transaction products that banks offer,
including bank checks, money orders, domestic wire transfers, international remittances, and prepaid
cards for non-deposit customers. Overall, a larger percentage of rural banks offer these products to
non-customers than urban banks; 47 percent of rural banks offer bank/official checks for nondeposit customers, compared with 26 percent of urban banks.
QIVD. Figure 36 Urban/Rural: Bank/Official
Checks
QIVD. Figure 39 Urban/Rural: International
Remittance
Do you offer bank/official
checks for non-deposit
customers?
No
Count
%
Yes
Count
%
Total
Count
%
Do you offer international
remittances for non-deposit
customers?
Rural HQ
2011
Urban HQ
2509
53.0%
73.6%
1785
900
47.0%
26.4%
3795
3409
100.0%
100.0%
No
Rural HQ
3313
Urban HQ
3249
90.6%
97.3%
342
91
%
9.4%
2.7%
Count
3655
3340
100.0%
100.0%
Count
%
Yes
Total
Count
%
QIVD. Figure 37 Urban/Rural: Money Orders
QIVD. Figure 40 Urban/Rural: Prepaid Cards
Do you offer money orders for
non-deposit customers?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
1939
Urban HQ
2515
51.9%
74.6%
1795
855
48.1%
25.4%
3734
3371
100.0%
100.0%
Do you offer prepaid cards for
non-deposit customers?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
3050
Urban HQ
2988
84.8%
90.4%
547
317
15.2%
9.6%
3597
3305
100.0%
100.0%
QIVD. Figure 38 Urban/Rural: Domestic Wire
Transfers
Do you offer domestic wire
transfers for non-deposit
customers?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
2465
Urban HQ
3081
64.8%
90.9%
1340
307
35.2%
9.1%
3805
3388
100.0%
100.0%
172
Services Provided to Non-Customers
Question IVD-1. For any of the services above, does your bank offer lower
prices for customers as an incentive to open an account?
Yes
No
About one-quarter (24.2 percent) of banks offer lower prices for services as an incentive for
customers to open an account.
QIVD-1. Figure 1
Valid
Frequency
448
Weighted
Frequency
4928
Yes
158
1569
24.2
Total
606
6497
100.0
79
943
685
7440
No
Missing
Does you bank offer lower prices for customers for these services?
System
Total
Weighted
Percent
75.8
There are no differences among regions for banks that offer lower prices for customers.
There is a difference between tiers for banks that offer lower prices to customers. A larger
percentage of Tier 1 banks (36.4 percent) offer lower prices, compared to Tier 3 banks (23.4
percent).
QIVD-1. Figure 2
Tier
Does you bank offer lower prices for customers for
these services?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
15
Tier 2
347
Tier 3
4566
63.6%
67.6%
76.6%
8
166
1395
36.4%
32.4%
23.4%
23
513
5961
100.0%
100.0%
100.0%
There is not a difference between urban and rural banks for banks that offer lower prices for
customers.
173
Services Provided to Non-Customers
Remittances
About a third (32.1 percent) of banks are concerned about offering remittances due to regulatory
considerations.
Question IVE. Is your bank concerned about offering remittances due to
regulatory requirements?
Yes
No
QIVE. Figure 1 Is you bank concerned about offering remittances due to regulatory requirements?
Valid
Frequency
368
Weighted
Frequency
4200
Yes
211
1989
32.1
Total
579
6189
100.0
System
106
1251
685
7440
No
Missing
Total
Weighted
Percent
67.9
There are differences among regions for banks that are concerned about offering remittances to
non-customers due to regulatory requirements. Almost half (46.9 percent) of Pacific banks are
concerned about offering remittances, compared with a quarter (25.1 percent) of West North
Central and 23 percent of Mountain banks.
QIVE. Figure 2 Region
Is you bank concerned about offering remittances due to regulatory requirements?
No
Count
%
Yes
Count
%
Total
Count
%
New
England
181
MidAtlantic
316
South
Atlantic
487
East
South
Central
408
West
South
Central
694
East
North
Central
693
West
North
Central
900
Mountain
301
Pacific
219
51.8%
61.4%
68.7%
71.6%
70.2%
65.9%
74.9%
77.0%
53.1%
169
199
221
162
294
359
301
90
194
48.2%
38.6%
31.3%
28.4%
29.8%
34.1%
25.1%
23.0%
46.9%
350
515
708
570
989
1052
1201
391
413
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
174
Services Provided to Non-Customers
There is a difference between tiers for banks that are concerned about offering remittances due to
regulatory requirements. About a third (30.6 percent) of the Tier 3 banks are concerned, compared
with 72.7 percent of Tier 1 banks.
QIVE. Figure 3 Tier
Is you bank concerned about offering remittances
due to regulatory requirements?
No
Count
Tier 1
Yes
%
Count
6
27.3%
17
257
52.1%
236
Tier 3
3938
69.4%
1736
%
72.7%
47.9%
30.6%
23
492
5674
100.0%
100.0%
100.0%
Total
Count
%
Tier 2
There is a difference between urban and rural banks for banks that are concerned about offering
remittances due to regulatory requirements. A larger percentage of urban banks are concerned with
offering remittances (37.7 percent), compared with rural banks (27.1 percent).
QIVE. Figure 4 Urban/Rural
Is you bank concerned about
offering remittances due to
regulatory requirements?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
2370
Urban HQ
1831
72.9%
62.3%
882
1107
27.1%
37.7%
3252
2938
100.0%
100.0%
Question IVE-1. If yes, please describe any regulatory concerns you may
have in offering this product.
Banks report concerns about regulatory requirements when offering remittances. These issues are
similar to those related to offering check cashing and providing specialized products and services for
the unbanked and underbanked. However, for remittances, more banks are concerned with
BSA/AML requirements than with non-customer information/identification.
BSA/AML concerns are mentioned most frequently by banks, with 124 of 190 mentioning
them. Ninety-four banks indicate that non-customer information, with regard to CIP, KYC, and
Patriot Act compliance, is a concern for offering remittances.
OFAC regulations are mentioned by 51 different banks, accounting for the third most frequently
cited issue.
Fraud, no recourse, risk, and monitoring requirements are also issues mentioned by banks.
Twenty-three banks respond “yes” but decline to provide further comments in Question IVE-1.
175
Services Provided to Non-Customers
176
Services Provided to Non-Customers
Chapter
7
Account Opening Process
This chapter examines the following topics:
Acceptable Identification for Checking Account Opening
New Account Screening and Risk Management Policies
Most Common Reasons for Declining New Account Applications
Options for Individuals Who Do Not Qualify for Conventional Accounts
This section of the report explores elements of Questions 3 and 4, specifically, identification issues which prevent
unbanked individuals from establishing conventional accounts.
Summary
Identification presents a significant challenge for banks. Government-issued forms of ID are
generally required by banks to open a new account. State-issued driver’s licenses (99 percent) or
passports (92 percent) are the most commonly accepted forms of ID. Matrícula Consular cards are
accepted by only 27 percent of banks, with a higher percentage accepting them in western and
southern states. Banks will also accept other, non-government-issued forms of ID to verify a
prospective customer’s identity, including utility bills, and employer letters and paystubs.
ChexSystems and third-party databases are used by over 87 percent of banks. In addition to
identification requirements and an OFAC list screening by 96 percent of banks when opening a new
checking account, banks also review individuals’ past records with services like ChexSystem and, less
commonly, credit bureau scores. If un/underbanked individuals have mismanaged accounts in the
past and negative hits occur when screening potential customers, about half (49 percent) of banks
will have a branch manager review the application and decide whether or not to open the account.
Another quarter (25 percent) of banks will automatically reject individuals with negative hits.
Few banks have product options for individuals with blemished checking account histories.
About a quarter (25 percent) of responding banks offer an alternative, entry-level deposit account
designed for individuals not qualified for a conventional account. Without an alternative account,
un/underbanked individuals face a barrier to rejoin the conventional banking system. When banks
decline a new account application, the most common reasons are negative account screening hits
because of prior account closure or mismanagement, insufficient identification, and low credit score
or poor credit record or history.
177
Account Opening Process
Acceptable Identification for Checking Account
Opening
A driver’s license is the most commonly accepted form of identification to open a new account, with
99.1 percent of banks accepting it, followed by passports, state-issued photo identification, and
military identification. Both ITINs and Matrícula Consular cards are accepted by less than 40
percent of banks. Other forms of identification such as utility bills, employer letters/paystubs, and
leases can be used as secondary sources but are not solely sufficient for account opening.
Question V A. What forms of government-issued identification does the
bank accept as part of the new account opening process?
Driver’s license
US or Foreign Passport
Social Security number
Matricula consular
State-issued ID card
ITIN
Military ID
Other
QVA. Figure 1 Acceptable Forms of Identification Required to Open a Checking Account
Identification Forms
Accept
Driver’s License
99.1%
Passport (US. or foreign)
92.4%
State-issued Photo ID
91.2%
Military ID
88.0%
Social Security Number
Individual Taxpayer Identification
Number (ITIN)
Matrícula Consular Card
62.8%
Alternative
Accepted to Verify
37.6%
26.9%
Utility Bills
58.3%
Employer Letters/Pay Stub
33.9%
None
31.4%
Housing Lease
23.2%
Other
11.5%
QVA. Figure 2 Driver’s License
Valid
No
QVA. Figure 3 Passport
Weighted Weighted
Frequency Frequency Percent
5
68
.9
Valid
No
Frequency
42
Weighted
Weighted
Frequency
Percent
564
7.6
Yes
677
7330
99.1
Yes
640
6835
92.4
Total
682
7399
100.0
Total
682
7399
100.0
3
41
685
7440
Missing System
Total
20.1%
Missing System
Total
178
3
41
685
7440
Account Opening Process
QVA. Figure 4 Social Security Number
Valid
No
QVA. Figure 7 ITIN
Weighted
Weighted
Percent
Frequency Frequency
267
2749
37.2
Yes
415
Total
Missing System
Total
4650
682
7399
3
41
685
7440
Valid
No
270
2779
37.6
100.0
Total
682
7399
100.0
3
41
685
7440
Missing
Total
QVA. Figure 8 Military ID
Valid
No
Weighted Weighted
Percent
Frequency Frequency
74
4619
12.0
211
1992
26.9
Yes
608
2779
88.0
Total
682
7399
100.0
Total
682
7399
100.0
3
41
685
7440
Missing
No
System
Total
QVA. Figure 6 State ID
Total
System
Yes
Total
Missing
Weighted
Percent
62.4
Yes
Weighted
Weighted
Percent
Frequency Frequency
471
5407
73.1
Missing System
Valid
Weighted
Frequency
4619
62.8
QVA. Figure 5 Matricula Consular
Valid
No
Frequen
cy
412
3
41
685
7440
QVA. Figure 9 Other
Weighted
Weighted
Percent
Frequency Frequency
53
653
8.8
Valid
No
Weighted Weighted
Frequency Frequency Percent
579
6499
88.5
Yes
629
6746
91.2
Yes
99
845
11.5
Total
682
7399
100.0
Total
678
7344
100.0
3
41
685
7440
System
Missing System
Total
7
96
685
7440
Among the 99 banks that report their acceptance of “other” forms of identification, 44 banks
specify permanent/non-permanent Resident Alien Identification or Green Cards. Ten banks accept
Tribal Identification, and seven accept Work Visas. Other forms of acceptable identification include
student identification, county identification, and insurance cards.
179
Account Opening Process
There are differences among regions by banks with respect to their acceptance of Social Security
numbers and Matrícula Consular cards for new customer account opening. For Social Security
numbers, there is a difference between the Mid-Atlantic (50.7 percent) and New England (45.9
percent) and West South Central (74.7 percent) banks.
QVA. Figure 10 Region: Social Security Numbers
No
Count
%
Yes
Count
%
Total
Count
%
Social Security Number
East
West
East
South
South
North
Central
Central
Central
200
298
505
West
North
Central
425
Mountain
215
Pacific
220
38.4%
30.2%
43.7%
47.8%
811
985
278
241
74.7%
61.6%
69.8%
56.3%
52.2%
1177
1316
1410
494
461
100.0%
100.0%
100.0%
100.0%
100.0%
New
England
234
MidAtlantic
280
South
Atlantic
373
54.1%
49.3%
43.4%
29.2%
25.3%
198
287
487
483
879
45.9%
50.7%
56.6%
70.8%
432
567
860
683
100.0%
100.0%
100.0%
100.0%
Matrícula Consular cards are accepted at 44.3 percent of Pacific banks, but only 9.6 percent of MidAtlantic banks accept them for identification purposes when opening a new account.
QVA. Figure 11 Region: Matricula Consular Card
No
Count
%
Yes
Count
%
Total
Count
%
Matrícula Consular Card
East
West
East
South
South
North
Central
Central
Central
521
715
913
New
England
347
MidAtlantic
512
South
Atlantic
658
80.2%
90.4%
76.5%
76.3%
60.7%
86
55
202
162
462
19.8%
9.6%
23.5%
23.7%
39.3%
West
North
Central
1084
Mountain
400
Pacific
257
69.4%
76.9%
81.1%
55.7%
402
326
93
204
30.6%
23.1%
18.9%
44.3%
432
567
860
683
1177
1316
1410
494
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for all identification types except state identification and military
identification. A higher percentage of Tier 2 banks (99.4 percent) accept a passport than Tier 3
banks (91.8 percent). For Matrícula Consular cards and other forms of identifications, there are
differences among all tiers.
QVA. Figure 12 Tier: Driver’s License/Passport/Social Security Number
Acceptable Forms of Identification Required to Open a Checking Account
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Tier 3
Driver’s
License
0
Passport
0
Social
Security
Number
15
.0%
.0%
58.3%
.0%
.6%
44.7%
1.0%
8.2%
25
25
10
551
548
305
6754
6262
4334
100.0%
100.0%
41.7%
100.0%
99.4%
55.3%
99.0%
91.8%
63.5%
Driver’s
License
0
Passport
3
Social
Security
Number
246
Driver’s
License
68
Passport
561
Social
Security
Number
2488
36.5%
25
25
25
551
551
551
6822
6822
6822
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
180
Account Opening Process
QVA. Figure 13 Tier: Matricula Consular Card/ITIN/Other
Acceptable Forms of Identification Required to Open a Checking Account
Tier 1
No
Count
ITIN
15
20.8%
19
%
Yes
Count
%
Total
Tier 2
Matricula
Consular
5
Count
%
Other
13
Matricula
Consular
329
ITIN
284
58.3%
50.0%
59.7%
10
13
222
79.2%
41.7%
50.0%
24
25
25
100.0%
100.0%
100.0%
Tier 3
Other
430
Matricula
Consular
5072
ITIN
4320
Other
6057
51.6%
78.0%
74.3%
63.3%
89.5%
267
121
1750
2502
711
40.3%
48.4%
22.0%
25.7%
36.7%
10.5%
551
551
551
6822
6822
6768
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks for the types of government identification
accepted, specifically with regard to Social Security numbers, Matrícula Consular cards, and state
identification. A larger percentage of rural banks accept Social Security numbers, and a larger
percentage of urban banks accept Matrícula Consular cards and state identifications.
QVA. Figure 14 Urban/Rural: Drivers License/Passport/Social Security Number
Acceptable Forms of Identification Required to Open a Checking Account
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Driver’s
License
14
.3%
Urban HQ
Passport
314
Social Security
Number
1187
Driver’s
License
55
Passport
250
Social Security
Number
1563
8.0%
30.1%
1.6%
7.2%
45.3%
3932
3631
2759
3398
3204
1891
99.7%
92.0%
69.9%
98.4%
92.8%
54.7%
3946
3946
3946
3453
3453
3453
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QVA. Figure 15 Urban/Rural: Matricula Consular Card/State ID/ITIN
Acceptable Forms of Identification Required to Open a Checking Account
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Matrícula
Consular
3101
State ID
410
78.6%
10.4%
Urban HQ
ITIN
2468
Matrícula
Consular
2306
State ID
243
62.6%
66.8%
7.0%
ITIN
2151
62.3%
845
3535
1477
1147
3210
1302
21.4%
89.6%
37.4%
33.2%
93.0%
37.7%
3946
3946
3946
3453
3453
3453
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
181
Account Opening Process
QVA. Figure 16 Urban/Rural: Military ID/Other
Acceptable Forms of Identification Required to Open a Checking Account
Rural HQ
Military ID
No
Count
419
3060
11.9%
88.4%
12.1%
88.6%
3477
452
3035
393
88.1%
11.6%
87.9%
11.4%
3946
3891
3453
3453
100.0%
100.0%
100.0%
100.0%
Count
Count
%
Other
3439
%
Total
Military ID
468
%
Yes
Urban HQ
Other
Question V B. Which, if any, of the following alternative sources of
information does the bank accept to verify a prospective deposit customer’s
identity?
Utility bills/payments
Housing lease
Employer letters/pay stub
Other: ___
None
Utility bills are the most commonly accepted alternative form of ID for verifying a prospective
customer’s identity, with 58.3 percent of banks accepting them. Housing leases are the least
common, with 23.2 percent of banks accepting them as an alternative source of identification.
QVB. Figure 1 Utility Bills
Valid
No
QVB. Figure 3 Employer Letter/Pay Stub
Weighted
Weighted
Frequency Frequency
Percent
277
3010
41.7
Valid
Yes
390
4214
58.3
Yes
219
2447
33.9
Total
667
7224
100.0
Total
666
7221
100.0
18
215
19
219
685
7440
Missing System
Total
685
Missing System
Total
7440
QVB. Figure 2 Housing Lease
Valid
No
Yes
Total
Missing System
Total
No
Weighted
Weighted
Frequency Frequency
Percent
447
4774
66.1
QVB. Figure 4 Other
Weighted
Weighted
Frequency Frequency
Percent
505
5539
76.8
161
1672
666
7211
19
229
685
7440
Valid
No
Weighted
Weighted
Frequency Frequency
Percent
518
5775
79.9
23.2
Yes
149
1449
20.1
100.0
Total
667
7224
100.0
18
215
685
7440
Missing System
Total
182
Account Opening Process
Among the banks that report accepting “other” forms of identification, the five most frequently
cited alternative sources of information are: insurance, medicare/medicaid card (45), credit card (39),
student identification (37), voter registration (28), and birth certificate (26).
QVB. Figure 5 None
Valid
Missing
Frequency
456
Weighted
Frequency
4900
Yes
206
2246
31.4
Total
662
7146
100.0
No
System
Total
23
294
685
7440
Weighted
Percent
68.6
There are no differences among regions or tiers for alternative sources of information for verifying
deposit customers’ identities.
There is a difference between urban and rural banks for banks that accept employee letters/pay
stubs as alternative sources of information to verify a prospective customer’s identity. A larger
percentage of rural banks (39.9 percent) accept employee letters and pay stubs, compared with 27.0
percent of urban banks.
QVB. Figure 6 Urban/Rural
Acceptable Forms of Identification Required to Open a Checking Account
No
Count
%
Yes
Count
%
Total
Count
%
Utility bills
1433
37.3%
Rural HQ
Housing
Employer
lease
letter/pay stub
2944
2304
77.0%
60.1%
Utility bills
1578
46.6%
Urban HQ
Housing
Employer
lease
letter/pay stub
2595
2470
76.6%
73.0%
2404
879
1532
1810
793
915
62.7%
23.0%
39.9%
53.4%
23.4%
27.0%
3836
3823
3836
3388
3388
3385
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
183
Account Opening Process
New Account Screening and
Risk Management Policies
Nearly all (95.6 percent) banks use OFAC lists for new account screening and risk management.
The ChexSystem/Qualifile service is used by 77.2 percent of banks, while 33.5 percent of banks
refer to credit bureau reports. A large percentage of banks that use OFAC lists also use
ChexSystems/Qualifile. Less than 1 percent of banks do not use any account screening or risk
management tools.
QVB. Figure 6 Account Screening and Risk Management Tools
Percentage of
Banks
Account Screening and Risk Management Tools
OFAC Lists
95.6%
ChexSystems/Qualifile
77.2%
Credit Bureau Reports
33.5%
Other
14.1%
Early Warning Services (formerly Primary Payment Systems)
2.0%
None
0.6%
Question V C. What account screening an risk management tools are used for new
deposit accounts?
ChexSystems/Qualifile
Early Warning Services (formerly PPS)
OFAC Lists
Credit Bureau Reports
None
Other: ______
QVC. Figure 3 OFAC Lists
QVC. Figure 1 ChexSystems/Qualifile
Valid
No
Yes
Total
Missing System
Total
Weighted Weighted
Frequency Frequency Percent
133
1691
22.8
549
5718
682
7409
3
31
685
7440
Valid
No
Yes
652
7085
95.6
100.0
Total
683
7412
100.0
2
27
685
7440
Missing System
Total
Total
QVC Figure 4
Weighted Weighted
Frequency Frequency Percent
655
7265
98.0
Yes
28
147
2.0
Total
683
7412
100.0
2
27
685
7440
Missing System
No
77.2
QVC. Figure 2 Early Warning Services
Valid
Weighted
Weighted
Percent
Frequency Frequency
31
327
4.4
Valid
Credit Bureau Reports
No
Yes
219
2477
33.5
Total
682
7399
100.0
Missing System
Total
184
Weighted
Weighted
Percent
Frequency Frequency
463
4922
66.5
3
41
685
7440
Account Opening Process
QVC. Figure 5 None
Valid
QVC. Figure 6 Other
Weighted Weighted
Frequency Frequency Percent
679
7368
99.4
No
Yes
Total
Missing System
Total
3
41
.6
682
7409
100.0
3
31
685
7440
Valid
Weighted
Weighted
Frequency Frequency
Percent
573
6359
85.9
No
Yes
109
1040
14.1
Total
682
7399
100.0
Missing System
Total
3
41
685
7440
Among the 109 banks that report “other,” the most common responses are: eFunds (10), which
operates the CheckSystems/Qualifile; TeleCheck (10); Lexis-Nexis (9); Penley (9); and Patriot Act
Software (6).
There is a difference between regions for the account screening tools of ChexSystems/Qualifile and
Credit Bureau Reports. A smaller percentage of banks in the West North Central region (61.0
percent) use ChexSystems/Qualifile than banks in New England (95.9 percent).
A higher percentage of banks in the East South Central (47.6 percent) and West North Central (47.1
percent) regions use Credit Bureau Reports than banks in the New England (10.3 percent) and MidAtlantic regions (14.2 percent).
QVC. Figure 7 Region: ChexSystems/Qualifile
No
Count
%
Yes
Count
%
Total
Count
%
New
England
31
MidAtlantic
87
South
Atlantic
138
7.1%
14.9%
16.0%
ChexSystems/ Qualifile
East
West
East
South
South
North
Central
Central
Central
168
219
359
24.5%
18.6%
27.4%
West
North
Central
550
Mountain
62
Pacific
79
39.0%
12.5%
17.1%
401
494
722
515
958
953
860
432
383
92.9%
85.1%
84.0%
75.5%
81.4%
72.6%
61.0%
87.5%
82.9%
432
581
860
683
1177
1312
1410
494
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Credit Bureau
East
West
East
South
South
North
Central
Central
Central
358
821
843
West
North
Central
739
Mountain
347
Pacific
382
52.9%
70.2%
82.9%
QVC. Figure 8 Region: Credit Bureau
No
Count
%
Yes
Count
%
Total
Count
%
New
England
388
MidAtlantic
498
South
Atlantic
546
89.7%
85.8%
63.5%
52.4%
69.8%
64.1%
44
82
313
325
356
473
657
147
79
10.3%
14.2%
36.5%
47.6%
30.2%
35.9%
47.1%
29.8%
17.1%
432
581
860
683
1177
1316
1396
494
461
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
185
Account Opening Process
There are differences among tiers for ChexSystems/Qualifile, Early Warning Services, OFAC Lists
and other types of account screening tools. A higher percentage of Tier 2 banks (93.7 percent) use
ChexSystem than banks in Tier 3 (75.8 percent). For Early Warning Services, there is a difference
between Tier 1 (54.2 percent) and Tiers 2 (4.4 percent) and 3 (1.6 percent). For other screening
tools, there is a slight difference between Tier 1 (37.5 percent) and Tiers 2 (20.8 percent) and 3 (13.4
percent).
QVC. Figure 9 Tier: ChexSystems/ Early Warning Services
No
Count
%
Yes
Count
%
Total
Count
%
Tier 1
ChexSystems Early Warning
/Qualifile
Services
2
11
8.3%
Tier 2
ChexSystems/ Early Warning
Qualifile
Services
35
527
45.8%
6.3%
95.6%
Tier 3
ChexSystems/ Early Warning
Qualifile
Services
1654
6727
24.2%
98.4%
23
14
513
24
5182
109
91.7%
54.2%
93.7%
4.4%
75.8%
1.6%
25
25
548
551
6836
6836
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QVC. Figure 10 Tier: OFAC Lists/Other
Tier 1
OFAC Lists
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
2
Other
16
OFAC Lists
24
8.3%
62.5%
4.4%
Tier 3
Other
437
OFAC Lists
301
Other
5906
79.2%
4.4%
86.6%
23
9
527
114
6535
916
91.7%
37.5%
95.6%
20.8%
95.6%
13.4%
25
25
551
551
6836
6822
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences between urban and rural banks for screening tools for new deposit accounts,
including ChexSystems/Qualifile, Early Warning Systems, and Credit Bureau Reports. A larger
percentage of urban banks (87.5 percent) use ChexSystems/Qualifile than rural banks (68.1 percent).
A larger percentage of urban banks (3.0 percent) use Early Warning Systems than rural banks (1.1
percent). However, a larger percentage of rural banks (39.0 percent) use Credit Bureau Reports than
urban banks (27.2 percent).
QVC. Figure 11 Urban/Rural: Check Systems/Qualifile/Early Warning Services/OFAC Lists
No
Count
%
Yes
Count
%
Total
Count
%
ChexSystems/
Qualifile
1258
Rural HQ
Early Warning
Services
3901
31.9%
98.9%
OFAC Lists
178
ChexSystems/
Qualifile
433
Urban HQ
Early Warning
Services
3364
OFAC Lists
149
4.5%
12.5%
97.0%
4.3%
2688
44
3768
3030
103
3317
68.1%
1.1%
95.5%
87.5%
3.0%
95.7%
3946
3946
3946
3463
3467
3467
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
186
Account Opening Process
QVC. Figure 12 Urban/Rural: Credit Bureau Reports/None/Other
Rural HQ
No
Count
None
3905
61.0%
99.0%
%
Yes
Count
%
Total
Urban HQ
Credit Bureau
Reports
2397
Count
%
Other
3392
Credit Bureau
Reports
2525
None
3463
Other
2967
86.3%
72.8%
100.0%
85.6%
1535
41
540
942
0
500
39.0%
1.0%
13.7%
27.2%
.0%
14.4%
3932
3946
3932
3467
3463
3467
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Question V D. Can a new customer open a deposit account without the bank
screening the customer using ChexSystems or a similar third-party screen
being used by the bank?
Checking account:……………
Yes
No
Savings account:……………..
Yes
No
A large majority (87.1 percent) of banks require a third-party screen before permitting individuals to
open checking accounts. Slightly fewer banks (81.4 percent) require third-party screens to open
savings accounts.
QVD. Figure 1 Can a customer open a checking
account without a third-party
screen?
Valid
QVD. Figure 2 Can a customer open a savings
account without a third-party
screen?
Weighted
Weighted
Frequency Frequency
Percent
596
6391
87.1
No
Yes
81
Total
Missing System
Total
950
677
7341
8
99
685
7440
Valid
Weighted
Frequency Frequency
557
5973
No
Weighted
Percent
81.4
12.9
Yes
117
1368
18.6
100.0
Total
674
7340
100.0
11
99
685
7440
Missing System
Total
There are differences among regions for opening accounts without a third-party screen. There are
differences with regard to checking accounts in the West North Central region (24.7 percent)
compared with New England (0.0 percent) and the South Atlantic (4.9 percent) regions.
QVD. Figure 3 Region: Can a customer open a checking account without a third-party screen?
No
Count
%
Yes
Total
New
England
446
Can a customer open a checking account without a third-party screen?
East
West
East
West
MidSouth
South
South
North
North
Central
Central
Central
Central Mountain
Atlantic
Atlantic
454
818
604
1057
1106
1051
463
Pacific
393
100.0%
84.2%
95.1%
90.3%
89.8%
84.1%
75.3%
93.8%
88.4%
0
86
42
65
120
210
345
31
51
%
.0%
15.8%
4.9%
9.7%
10.2%
15.9%
24.7%
6.2%
11.6%
Count
446
540
860
669
1177
1316
1396
494
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
187
Account Opening Process
A greater percent of banks in the West North Central region (32.6 percent) do not require a
screening for savings accounts than banks in the New England (0.8 percent) or South Atlantic (10.6
percent) regions.
QVD. Figure 4 Region: Can a customer open a savings account without a third-party screen?
No
Count
New
England
442
%
Yes
Count
%
Total
Count
%
Can a customer open a savings account without a third-party screen?
East
West
East
West
MidSouth
South
South
North
North
Central
Central
Central
Central Mountain
Atlantic
Atlantic
475
756
560
1016
983
938
418
Pacific
385
99.2%
82.2%
89.4%
82.4%
86.6%
75.5%
67.4%
87.2%
3
103
90
120
157
319
455
62
86.6%
59
.8%
17.8%
10.6%
17.6%
13.4%
24.5%
32.6%
12.8%
13.4%
446
577
846
679
1174
1302
1393
480
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are no differences among tiers for opening accounts without a third-party screen.
There are differences between urban and rural banks for banks that allow customers to open deposit
accounts without a third-party screen. A larger percentage of rural banks (18.7 percent for checking,
25.1 percent for savings) allow customers to open accounts without a third-party screen than urban
banks (6.4 percent and 11.3 percent, respectively).
QVD. Figure 5 Urban/Rural
Can a customer open an account without a third-party screen?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Checking
3176
Savings
2923
Checking
3215
Savings
3049
81.3%
74.9%
93.6%
88.7%
728
978
221
390
18.7%
25.1%
6.4%
11.3%
3905
3901
3436
3439
100.0%
100.0%
100.0%
100.0%
About half (48.6 percent) of banks require branch managers to decide on overrides when an
applicant screening returns a negative hit. Over a quarter (25.2 percent) of banks will reject the
account application automatically if there is negative information in ChexSystem records.
QVD. Figure 6 Bank Policies on Opening/Overrides
Bank Policy on Openings/Overrides
% of Banks
Account opening decision is made at the discretion of the branch
manager
48.6%
Application is automatically rejected
25.2%
Other
Account opening decision is made at the discretion of the new account
representative
Application is submitted to a centralized back office for review
18.2%
188
13.3%
6.5%
Account Opening Process
Question V E. If an applicant screening process returns a negative hit, what
is the bank’s policy regarding account opening/overrides?
Application is automatically rejected
Account opening decision is made at the discretion of the new account representative
Account opening decision is made at the discretion of the branch manager
Application is submitted to a centralized back office for review
Other: ___
QVE. Figure 4. Submitted to a centralized office
for review
QVE. Figure 1. Automatically Rejected
Valid
No
Weighted
Weighted
Frequency Frequency
Percent
511
5431
74.8
Valid
Weighted
Percent
93.5
Yes
160
1828
25.2
Yes
46
469
6.5
Total
671
7259
100.0
Total
671
7259
100.0
14
181
14
181
685
7440
Missing System
Total
685
Missing System
Total
7440
QVE. Figure 2. Decision is made at the discretion
of the new account rep
Valid
No
Weighted
Frequency Frequency
625
6790
No
QVE. Figure 5. Other
Weighted
Weighted
Percent
Frequency Frequency
584
6296
86.7
Valid
No
Weighted
Frequency Frequency
534
5925
Weighted
Percent
81.8
Yes
87
963
13.3
Yes
136
1320
18.2
Total
671
7259
100.0
Total
670
7245
100.0
14
181
685
7440
Missing System
Total
Missing System
Total
15
195
685
7440
QVE. Figure 3. Decision is made at the discretion
of the branch manager
Valid
No
Yes
338
3526
48.6
Total
671
7259
100.0
14
181
685
7440
Missing System
Total
Weighted
Weighted
Frequency Frequency
Percent
333
3732
51.4
Among the banks reporting “other,” the most frequently mentioned responses include: may be
opened at discretion of upper management (63), offer a limited service account (23), action depends
on nature of hit and when it occurred (13), and account may be opened with proof of hit being
resolved (11).
189
Account Opening Process
There is a difference between regions for having branch managers decide when the screening
process returns a negative hit. A lower percentage of banks in the West North Central region (38.3
percent) have branch managers decide, compared with the South Atlantic (63.1 percent) and New
England (73.1 percent) regions.
QVE. Figure 6. Region
No
Count
%
Yes
56.9%
36.9%
54.0%
54.3%
56.5%
61.7%
45.3%
46.6%
326
244
543
307
537
554
514
270
232
73.1%
43.1%
63.1%
46.0%
45.7%
43.5%
38.3%
54.7%
53.4%
446
567
860
666
1177
1274
1341
494
434
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Pacific
202
26.9%
Count
%
Total
New
England
120
Decision is made at the discretion of the branch manager
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
323
317
359
640
721
828
223
There are differences between tiers for automatic rejections, branch manager decisions, and other
override decisions on opening accounts when the screening process returns a negative hit. A small
percentage (4.2 percent) of Tier 1 banks automatically reject candidates, compared with 21.5 percent
of Tier 2 banks and 25.6 percent of Tier 3 banks. Branch managers decide at 75.0 percent of Tier 1
banks, compared with 53.8 percent in Tier 2 and 48.1 percent in Tier 3. One-third (33.3 percent) of
Tier 1 banks note “other” policies, compared with 27.2 percent of Tier 2 banks and 17.4 percent of
Tier 3 banks.
QVE. Figure 7. Tier
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
Automatically
Rejected
24
Decision is
made at the
discretion of
the new
account rep
20
Automatically
Rejected
430
Decision is
made at the
discretion of
the new
account rep
492
95.8%
79.2%
78.5%
89.9%
Tier 3
Decision is
made at the
discretion of
Automatically
the new
account rep
Rejected
4977
5783
74.4%
86.5%
1
5
118
55
1709
902
4.2%
20.8%
21.5%
10.1%
25.6%
13.5%
25
25
548
548
6686
6686
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
190
Account Opening Process
QVE. Figure 8. Tier
No
Count
Tier 1
Tier 2
Tier 3
Decision is
made at
the
Submitted
Decision is Submitted
Decision is Submitted
discretion
to a
made at the
to a
made at the
to a
of the
centralized
discretion of centralized
discretion of centralized
branch
office for
the branch
office for
the branch
office for
manager
review
Other
manager
review
Other
manager
review
Other
6
22
17
253
506
399
3473
6262 5510
%
Yes
25.0%
Count
19
%
Total
87.5% 66.7%
75.0%
Count
%
3
46.2%
8
295
12.5% 33.3%
53.8%
25
25
100.0%
100.0%
25
100.0
%
548
100.0%
92.4% 72.8%
42
51.9%
149
3213
7.6% 27.2%
48.1%
548
548
100.0
100.0%
%
6686
100.0%
93.7% 82.6%
424
1162
6.3% 17.4%
6686
6672
100.0
100.0%
%
There is no difference between urban and rural banks for the bank’s policies regarding account
opening/overrides.
Question V F. Does the bank use credit report or bureau scores as part of its
screening process for new checking accounts?
Yes
No
Most banks (80.7 percent) do not use credit reports or bureau scores when performing background
screens on new customers who are seeking to open checking accounts at their bank.
QVF. Figure 1. Does the bank use credit reports or bureau scores as screening for new checking accounts?
Valid
Frequency
541
Weighted
Frequency
5918
Weighted
Percent
80.7
Yes
133
1412
19.3
Total
674
7330
100.0
11
110
685
7440
No
Missing
System
Total
A smaller percentage of banks in the Mountain (3.5 percent) and Pacific (3.4 percent) regions use
credit reports as a screening tool to open new checking accounts than banks in the South Atlantic
(29.9 percent) or East South Central (33.2 percent) region.
QVF. Figure 2. Region
Does the bank use credit reports or bureau scores as screening for new checking accounts?
East
West
East
West
New
Mid
South
South
South
North
North
Central
Central
Central
Central
Mountain Pacific
England
Atlantic
Atlantic
No
Count
%
Yes
Count
%
Total
Count
%
391
487
602
454
1020
1050
1022
473
419
90.5%
88.6%
70.1%
66.8%
87.7%
79.8%
72.7%
96.5%
96.6%
41
63
257
226
144
265
384
17
15
9.5%
11.4%
29.9%
33.2%
12.3%
20.2%
27.3%
3.5%
3.4%
432
550
860
679
1163
1316
1406
490
434
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
191
Account Opening Process
A higher percentage of Tier 1 banks (50.0 percent) use credit reports as a screening tool for opening
new checking accounts than Tier 2 (16.1 percent) and Tier 3 banks (19.4 percent).
QVF. Figure 3. Tier
Does the bank use credit reports or bureau scores
as screening for new checking accounts?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
13
Tier 2
451
Tier 3
5455
50.0%
83.9%
80.6%
13
87
1313
50.0%
16.1%
19.4%
25
538
6768
100.0%
100.0%
100.0%
There is little difference between urban and rural banks for banks that use credit reports as a
screening tool for opening new checking accounts.
Common Reasons for Declining New Account
Applications
Question VG. What are the top three most common reasons that a new
account application is declined? Please rank the three most common
reasons 1 to 3, where 1 = the most common reason, 2 = the second most
common reason, and 3 = the third most common reason.
___Insufficient identification information
___Negative account screening hit due to prior account closure or mismanagement
___Negative account screening hit due to potential fraud alert
___No credit score/Insufficient credit history
___Low credit score/ or poor credit record/credit history
___Insufficient initial deposit
___Other 1
___Other 2
192
Account Opening Process
Banks’ most common reason for declining new accounts is negative screening information about a
prior account (62.2 percent), followed by insufficient identification information (38.6 percent) and a
low credit score/rating (37.0 percent).
QVG. Figure 1. Reason for Declining Applications
Reason for Declining Applications
Ranked
#1
Ranked #1
or #2
Negative account screening hit due to prior account closure or
mismanagement
62.2%
90.5%
Insufficient identification information
38.6%
73.9%
Low credit score/ or poor credit record/credit history
37.0%
69.6%
Other
13.9%
50.4%
Negative account screening hit due to potential fraud alert
8.9%
46.7%
No credit score/Insufficient credit history
2.9%
37.1%
10.3%
32.6%
Insufficient initial deposit
QVG. Figure 2. Overall Calculated Rankings
Reason for Decline
Rank
Negative account screening hit due to prior account closure
or mismanagement
1
Insufficient identification information
2
Negative account screening hit due to potential fraud alert
3
Insufficient initial deposit
4
Low credit score/ or poor credit record/credit history
5
No credit score/Insufficient credit history
6
Other
7
*Choices were scored in reverse order, where 1 = 5 points, 2 = 4 points etc. Choices were then
ranked according to total points.
193
Account Opening Process
Rankings are identical for the top three choices across all three tiers. The rankings for the reasons by
region were also identical to overall rankings.
QVG. Figure 3. Calculated Rankings by Tier
Reason for Decline
Tier 1 Rank
Tier 2 Rank
Tier 3 Rank
Negative account screening hit due to
prior account closure or mismanagement
1
1
1
Insufficient identification information
2
2
2
Negative account screening hit due to
potential fraud alert
3
3
3
Low credit score/ or poor credit
record/credit history
4
4
5
Insufficient initial deposit
7
5
4
Other
6
6
6
No credit score/Insufficient credit history
5
7
7
QVG. Figure 4. Statistics
Weighted
N
Valid
Missing
Negative
account
Low credit
Negative account screening
No credit
score/ poor
screening due to
due to
score/
credit
Insufficient
Insufficient prior closure or
potential
insufficient
record or
initial
ID
mismanagement fraud alert credit history
history
deposit Other 1 Other 2
6725
6371
4220
581
1202
1889
443
58
714
1069
3219
6859
6237
5551
6996
7382
Mean
1.88
1.48
2.45
2.83
2.05
2.67
2.39
3.00
Median
2.00
1.00
3.00
3.00
2.00
3.00
2.00
3.00
Mode
1
1
3
3
1
3
3
3
Minimum
1
1
1
1
1
1
1
3
Maximum
4
4
4
6
6
6
4
3
194
Account Opening Process
QVG. Figure 8. No credit score/insufficient credit
history
QVG. Figure 5. Insufficient ID
Valid
1
2
3
4
Total
Missing
System
Total
Weighted Weighted
Frequency Frequency Percent
242
2593
38.6
219
157
2375
1744
Valid
1
35.3
2
16
198
34.1
25.9
3
25
284
48.8
1
14
.2
4
3
41
7.1
619
6725
100.0
5
2
27
4.7
6
1
14
2.4
100.0
66
685
714
Total
7440
Missing
System
Total
QVG. Figure 6. Negative account screening due
to prior closure or
mismanagement
Valid
1
7440
QVG. Figure 9. Low credit score/poor credit
record or history
Weighted Weighted
Frequency Frequency Percent
365
3961
62.2
Valid
1
Weighted Weighted
Frequency Frequency Percent
39
444
37.0
28.3
2
35
392
32.6
3
63
592
9.3
3
27
298
24.8
System
1
14
.2
4
1
14
1.1
596
6371
100.0
5
3
41
3.4
1069
6
1
14
1.1
7440
Total
106
1202
100.0
System
579
6237
685
7440
89
685
Missing
Total
QVG. Figure 7. Negative account screening due
to potential fraud alert
1
2
3
4
Total
Total
685
1805
Total
Missing
581
6859
167
Total
Valid
49
636
2
4
Missing
Weighted Weighted
Frequency Frequency Percent
2
17
2.9
System
QVG. Figure 10. Insufficient initial deposit
Weighted Weighted
Frequency Frequency Percent
35
377
8.9
159
216
3
413
1596
2217
31
4220
272
3219
685
7440
Valid
1
Weighted Weighted
Frequency Frequency Percent
15
195
10.3
37.8
2
33
421
22.3
52.5
3
101
1174
62.2
.7
4
5
58
3.1
100.0
6
3
41
2.2
Total
157
1889
100.0
System
528
5551
685
7440
Missing
Total
195
Account Opening Process
QVG. Figure 11. Other 1
Valid
Weighted Weighted
Frequency Frequency Percent
6
62
13.9
1
2
15
162
3
19
206
4
Total
Missing
QVG. Figure 12. Other 2
System
Total
Weighted Weighted
Frequency Frequency Percent
5
58
100.0
Valid
3
36.5
Missing
System
46.5
Total
1
14
3.1
41
443
100.0
644
6996
685
7440
680
7382
685
7440
Among banks reporting “other,” the most common reasons for declining accounts include: poor
account history (18), unable to verify identification or other information given (10), questionable or
insufficient initial deposit (7), and individual owes money to a bank (4).
There are differences among regions in rankings for negative account screening due to prior closure
or mismanagement. A larger percentage (73.0 percent) of New England banks followed by banks in
the East South Central (71.7 percent) and East North Central (71.0 percent) regions gave this
category a first-place ranking than other regions, while a lesser percentage of Mid-Atlantic banks
(40.1 percent) ranked it first.
QVG. Figure 13. Region
1
Count
%
2
Count
Total
40.1%
56.0%
71.7%
64.2%
71.0%
61.0%
56.0%
58.2%
68
249
282
121
301
178
335
155
117
50.2%
36.4%
20.7%
27.7%
17.0%
31.1%
32.5%
28.2%
44
48
44
44
89
125
86
55
56
10.6%
9.7%
5.8%
7.6%
8.2%
12.0%
7.9%
11.5%
13.5%
0
0
14
0
0
0
0
0
0
%
.0%
.0%
1.8%
.0%
.0%
.0%
.0%
.0%
.0%
Count
418
495
773
584
1088
1044
1078
476
413
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
4
73.0%
Pacific
241
16.3%
%
3
New
England
305
Negative Account Screening Due to Prior Closure or Mismanagement
East
West
East
West
South
South
North
North
MidSouth
Atlantic
Atlantic
Central
Central
Central
Central Mountain
199
433
418
698
741
658
267
Count
%
196
Account Opening Process
There is a difference between tiers for the ranking of a negative account screening due to prior
closure or mismanagement. There is a difference between Tier 1 (36.4 percent ranked first) and Tier
3 (62.3 percent ranked first).
QVG. Figure 14. Tier
Tier 1
Tier 2
Tier 3
Negative
Negative
Negative
Negative
Negative
account
account
account
screening
account
account
screening due screening
due to prior screening
screening due
to prior closure
due to
due to
to prior closure
closure or
Insufficient
or mispotential Insufficient
mispotential Insufficient
or mismanagement fraud alert
management fraud alert
management
ID
ID
ID
1
Count
%
2
Count
%
3
Count
%
4
Count
%
Total Count
%
Negative
account
screening
due to
potential
fraud alert
9
8
4
205
316
17
2379
3637
355
50.0%
36.4%
20.0%
39.9%
61.9%
4.3%
38.4%
62.3%
9.4%
7
8
7
180
128
166
2188
1668
1422
38.9%
36.4%
35.0%
35.1%
25.2%
41.7%
35.3%
28.6%
37.4%
2
6
9
128
66
212
1613
520
1996
11.1%
27.3%
45.0%
25.0%
12.9%
53.0%
26.0%
8.9%
52.5%
0
0
0
0
0
3
14
14
27
.0%
.0%
.0%
.0%
.0%
.9%
.2%
.2%
.7%
19
23
21
513
510
399
6193
5838
3801
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is no difference between urban and rural banks for the ranking of the common reasons for
declining accounts.
197
Account Opening Process
Options for Individuals Who Do Not Qualify for
Conventional Accounts
Question V H. If a new account applicant does not qualify for a conventional
checking account, does the bank offer any entry deposit accounts designed
for individuals not qualified for conventional accounts that can serve as a
“stepping stone” account (e.g., an account with debit card access but no
check writing)?
Yes
No
About a quarter (24.6 percent) of all banks have at least one entry deposit account designed for
individuals not qualified for conventional accounts. This percentage may be overstated as the
majority of account descriptions reported by banks in the subsequent open-ended question might
not be classified as entry-level accounts for otherwise unqualified individuals.
QVH. Figure 1. Does the bank offer “stepping stone” accounts?
Valid
Frequency
499
Weighted
Frequency
5518
Weighted
Percent
75.4
Yes
177
1799
24.6
Total
676
7317
100.0
9
123
685
7440
No
Missing
System
Total
There is little difference between regions for banks that offer stepping stone accounts.
There is a difference between tiers for banks that offer stepping stone accounts. A greater
percentage of Tier 1 banks (50.0 percent) offer the accounts, compared to 28.9 percent and 24.1
percent of Tier 2 and Tier 3 banks, respectively.
QVH. Figure 2. Tier
Does the bank offer “stepping stone'”
accounts?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
13
Tier 2
392
Tier 3
50.0%
71.1%
75.9%
13
160
1627
50.0%
28.9%
24.1%
25
551
6740
100.0%
100.0%
100.0%
5113
There is little difference between urban and rural banks for banks that offer stepping stone accounts.
198
Account Opening Process
Question V H-1. If yes, please describe the alternative account(s) offered.
Include information related to products, transaction restrictions, fees, etc.
If possible, please include a copy of the product description or marketing
brochure for any alternative accounts.
Account A:
Date Introduced:
Account B:
Date Introduced:
Account C:
Date Introduced:
Qualitative analysis shows that a common approach is to offer some form of savings account as an
entry-level account for unbanked and underbanked individuals.
These accounts are difficult to categorize and characterize along common dimensions due to a wide
variety of features, conditions, requirements, and restrictions placed on these accounts by banks.
Among the 180 bank that provide descriptions of alternative accounts that they offer, only about
one-third (62 of 180) of the reporting banks appear to offer a distinct entry-level account for
un/underbanked individuals.
The majority (117 of 180) of reporting banks describe accounts that would not be considered an
entry-level deposit account.
About half (89 of 180) of reporting banks describe some form of savings account, including
regular, passbook, and statement savings accounts.
Standard checking accounts, with no modifications or restrictions on what is offered to
mainstream customers, are reported by 16 of 180 banks.
Few (10 of 180) banks report offering electronic transfer accounts (ETAs) as an alternative account
offered to un/underbanked individuals.
199
Account Opening Process
200
Account Opening Process
Chapter
8
Deposit Products
This chapter examines the following topics:
Minimum Balance Required for Basic Accounts
Payment Options Available for Basic Accounts
NSF Fees and Options
These questions address aspects of the Congressional Question 4: transaction costs that may prevent un/underbanked
individuals from establishing accounts.
Summary
Most banks offer low-cost accounts with low minimum balance requirements. The survey
shows that the majority of banks (an estimated 62 percent) do not require a minimum balance for
their most basic checking accounts, and that an additional 8 percent of banks waive minimum
balance requirements with direct deposit.
Most banks include free check writing and debit card use in their most basic checking
accounts. Most banks (90 percent) include free check writing, and 84 percent include free debit
card transactions. Online bill payment is included at no additional cost at 64.8 percent of banks.
Nearly all (99 percent) banks charge NSF fees on their most basic transaction accounts,
with a mean fee of $25.89. Over half of the banks surveyed offer programs to cover or waive the
NSF items and alerts to notify customers of low balances or NSF transactions.
Banks policies for closing accounts are inconsistent. Many banks will automatically close the
account once a threshold number of NSF items are reached or if a persistent negative balance
remains for a bank-determined time period, which can range from 10 to 180 days.
201
Deposit Products
Minimum Balance Requirement for Bank Accounts
Question VI A. Does the bank’s most basic or entry-level checking account
have a minimum balance requirement?
Yes
No, but only with direct deposit
No
A majority (61.6 percent) of banks do not require a minimum balance for their basic checking
account product. An additional 8.1 percent of banks waive the minimum balance requirement if
customers use direct deposit.
QVIA. Figure 1. Does the most entry level checking account have a minimum balance?
Valid
No
Yes
Frequency
434
Weighted
Frequency
4523
Weighted
Percent
61.6
186
2222
30.3
56
593
8.1
676
7337
100.0
9
103
685
7440
No, but only with
direct deposit
Total
Missing
System
Total
There are no differences among regions for banks with minimum balance requirements.
There is a difference between tiers for banks that have minimum balance requirements. A smaller
percentage of banks require a minimum balance in Tier 2 (18.5 percent) than in Tier 3 (31.3
percent). Tier 1 and Tier 2 have a higher percent of banks that do not require a minimum balance
(75.0 percent and 73.9 percent, respectively), compared with 60.6 percent of Tier 3.
QVIA. Figure 2. Tier
Does the most entry level checking account have a
minimum balance?
Tier 1
No
Count
%
Yes
Count
%
No, but only with
direct deposit
Count
%
Total
Count
%
19
Tier 2
402
Tier 3
4102
75.0%
73.9%
60.6%
2
101
2119
8.3%
18.5%
31.3%
4
42
547
16.7%
7.6%
8.1%
25
544
6768
100.0%
100.0%
100.0%
There is little difference between urban and rural banks for banks with minimum balance
requirements.
202
Deposit Products
Question VI A-1. If minimum balance is required, what is the minimum
balance?
$___ with direct deposit / $___ without direct deposit
Question VI A-2. If minimum balance is not required, what other fees
apply?
$___ with direct deposit / $___ without direct deposit
The estimated mean minimum balance requirements and fees for checking accounts without direct
deposit are slightly higher than for those with direct deposit ($185.80 vs. $161.93).
However, both the median and mode minimum balance for accounts with or without direct deposit
are $100.00. Without direct deposit or a minimum balance, monthly fees range from $0.00 to
$250.00.
QVIA-1. Figure 1. Statistics
Weighted
N
Valid
Missing
Minimum
balance with
direct deposit
1773
Minimum
balance without
direct deposit
2179
Fees with
direct deposit
1002
Fees without
direct deposit
1125
5667
5261
6438
6315
Mean
$161.92
$185.80
$10.38
$11.16
Median
$100.00
$100.00
$.00
$.00
Mode
$100.00
$100.00
$.00
$.00
Minimum
$.00
$.00
$.00
$.00
Maximum
$1,500.00
$1,500.00
$250.00
$250.00
There are no differences among tiers or regions for minimum balance amounts with direct deposit.
There is no difference between urban and rural banks for minimum balance amounts with direct
deposit.
There is no difference between tiers for minimum balance amounts without direct deposit.
There is no difference between urban and rural banks for minimum balance amounts without direct
deposit.
203
Deposit Products
There are differences among regions for minimum balance amounts for accounts without direct
deposit. The minimum balance for the Pacific region is higher than that of all other regions, with a
median of $300.00, compared with a median of $100.00 in all regions except New England ($10.00)
and the South Atlantic ($75.00).
QVIA-1. Figure 2. Minimum Balance (if required) Without Direct Deposit on an Entry-Level Checking
Account
Region
Median Minimum
Balance without
Direct Deposit
Sample
Size
New England
$10.00
5
Mid Atlantic
$100.00
15
South Atlantic
$75.00
16
East South Central
$100.00
18
West South Central
$100.00
43
East North Central
$100.00
26
West North Central
$100.00
29
Mountain
$100.00
10
Pacific
$300.00
19
There is no difference among tiers or regions for fees on basic checking accounts without a
minimum balance requirement.
There is no difference between urban and rural banks for fees on basic checking accounts without a
minimum balance requirement.
204
Deposit Products
Payment Options Available for Basic Accounts
Question VI B. For the most basic transaction deposit account, what
payment options are included/available?
Included
at No Cost
Product
Available
for a Fee
Not
Offered
Monthly Fee
(if applicable)
Per-Transaction
Fee
(if applicable)
Check writing
90.0%
9.5%
0.4%
$5.43
$0.29
ATM card (PIN-only)
80.6%
10.2%
9.2%
$1.08
$0.75
Debit card signature
(Visa/MasterCard)
84.2%
11.0%
4.8%
$1.48
$0.36
Online bill payment
64.8%
21.5%
13.7%
$5.50
$0.27
Ninety-percent (90 percent) of banks include free check writing in their most basic transaction
account product.
Online bill payment is the most common fee-based product offered (21.5 percent), but the majority
of banks still provide this feature at no cost (64.8 percent). If there is a fee associated with online bill
payment, it is typically about $5.50 per month or $0.27 per transaction. Online bill payment is also
the most common product not offered by banks (13.7 percent).
QVIB. Figure 1. Is check writing available for the most basic transaction account?
Valid
Not offered
Included at no cost
Available for a fee
Total
Missing
System
Total
Frequency
4
Weighted
Frequency
32
595
6413
Weighted
Percent
.4
90.0
59
677
9.5
658
7122
100.0
27
318
685
7440
There are no differences among between regions or tiers in check writing availability.
The median monthly fee for check writing, if banks charge a fee, is $3.00. In addition, the median
per transaction fee for writing a check is $0.20.
QVIB. Figure 2 Statistics
Weighted
N
Valid
Missing
Check Writing
Monthly Fee
357
Check Writing
Transaction
Fee
464
320
213
Mean
$5.43
$.29
Median
$3.00
$.20
Mode
$5.00
$.25
Minimum
$.00
$.00
Maximum
$50.15
$2.00
205
Deposit Products
There are no differences among tiers or regions in monthly or per-item check writing fees.
Most (80.6 percent) banks include ATM cards at no cost with their most basic accounts, and 10.2
percent offer an ATM card with a fee.
QVIB. Figure 3. Is an ATM card available for the most basic transaction account?
Valid
Frequency
51
Weighted
Frequency
634
Weighted
Percent
9.2
Included at no cost
525
5553
80.6
Available for a fee
61
699
10.2
637
6886
100.0
Not offered
Total
Missing
System
Total
48
554
685
7440
There is a difference between regions in ATM card availability. A larger percentage of West North
Central banks (19.4 percent) offer ATM cards for a fee, than in the Pacific (0 percent).
QVIB. Figure 4. Is an ATM card available for the most basic transaction account?
New
England
Not
offered
Count
%
Included
at no
cost
27
41
76
14
99
137
96
68
75
6.3%
8.2%
9.6%
2.2%
9.3%
10.9%
7.1%
15.3%
18.4%
374
427
677
580
811
1007
996
347
335
86.5%
85.6%
85.6%
92.4%
76.0%
80.1%
73.5%
77.7%
81.6%
31
31
38
34
157
114
263
31
0
7.1%
6.2%
4.8%
5.5%
14.7%
9.1%
19.4%
6.9%
.0%
Count
%
Total
Pacific
Count
%
Available
for a fee
Is an ATM card available for the most basic transaction account?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central Central Mountain
Count
%
432
498
791
628
1068
1257
1355
446
410
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is no difference between tiers in ATM card availability.
Of the banks that offer an ATM card for a fee, the mean monthly fee is $1.08, and the mean
transaction fee is $0.75.
QVIB. Figure 5. Statistics
Weighted
N
Valid
Missing
ATM Monthly
Fee
422
ATM
Transaction Fee
195
277
504
Mean
$1.08
$.75
Median
$1.00
$1.00
Mode
$1.00
$1.00
Minimum
$.00
$.00
Maximum
$2.00
$2.00
206
Deposit Products
There are no differences among tiers or regions for ATM fees.
Almost all banks (95.2 percent) offer a debit card with their most basic transaction account; 84.2
percent banks offer it for free, and 11.0 percent of banks offer it for a fee.
QVIB. Figure 6. Is a debit card available for the most basic transaction account?
Valid
Not offered
Frequency
27
Weighted
Frequency
339
Weighted
Percent
4.8
562
5911
84.2
Included at no cost
Available for a fee
Total
Missing
System
Total
60
769
11.0
649
7019
100.0
36
421
685
7440
There are differences among regions in debit card availability and the incidence of fees. There is a
difference between the Pacific region and the West North Central region. Only 3.1 percent of banks
in the Pacific charge a fee for a debit card, compared with 20.5 percent of West North Central
banks. However, a greater percentage of banks in the West North Central offer a debit card (96.8
percent) than in the Pacific (86.9 percent).
QVIB. Figure 7. Region
Is a debit card available for the most basic transaction account?
Not
offered
Total
East
North
Central
West
North
Central
South
Atlantic
14
14
41
17
58
68
41
27
58
3.3%
2.6%
4.9%
2.6%
5.1%
5.5%
3.2%
5.8%
13.1%
401
481
743
625
866
1093
969
360
372
95.9%
92.1%
88.6%
95.3%
75.3%
87.7%
76.3%
76.1%
83.8%
3
27
55
14
226
86
260
86
14
%
.8%
5.2%
6.5%
2.1%
19.6%
6.9%
20.5%
18.1%
3.1%
Count
418
522
839
655
1150
1247
1270
473
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
Mountain
Pacific
Count
%
Available
for a fee
West
South
Central
MidAtlantic
%
Included
at no
cost
East
South
Central
New
England
Count
%
There is little difference between tiers for debit card availability.
207
Deposit Products
The median monthly fee for banks charging a fee for debit cards is $1.00, while the median per-item
transaction fee is $0.12. Less than 2 percent of banks report having per item fees for debit card
usage.
QVIB. Figure 8.
Weighted
N
Statistics
Valid
Debit Card
Transaction
Fee
113
Debit Card
Monthly Fee
520
Missing
250
656
Mean
$1.48
$.36
Median
$1.00
$.12
Mode
$1.00
$.00
Minimum
$.00
$.00
Maximum
$5.00
$1.25
There are few differences among tiers or regions for debit card fees.
Online bill payment is not offered by 13.7 percent banks, but it is available at no additional cost at
64.8 percent of banks.
QVIB. Figure 9. Is online bill pay available for the most basic transaction account?
Valid
Missing
Frequency
71
Weighted
Frequency
950
Weighted
Percent
13.7
Included at no cost
445
4502
64.8
Available for a fee
130
1495
21.5
Total
646
6947
100.0
Not offered
System
Total
39
492
685
7440
There are no differences among regions or tiers for bill pay availability.
Among banks that charge a fee, the median monthly fee for bill payment services is $5.00, and the
median per-item transaction fee is $0.35. These are the highest and most commonly charged fees
among the payment options listed in the survey.
QVIB. Figure 10.
Weighted
N
Statistics
Valid
Missing
Bill pay
Monthly Fee
1093
Bill pay
Transaction
Fee
154
401
1341
Mean
$5.50
$.27
Median
$5.00
$.35
Mode
$5.95
$.00
Minimum
$.00
$.00
Maximum
$10.00
$.55
208
Deposit Products
There is a difference between tiers in monthly fees charged for bill payment, but not in pertransaction fees, among banks that charge a fee for online bill payment services. Fees for Tier 1
(mean: $6.95) are higher than for Tier 2 (mean: $4.86). The Tier 3 mean ($5.54) and median ($5.00)
monthly fees fall between those for Tiers 1 and 2.
QVIB. Figure 11.
N
Tier 1
Valid
Missing
Bill Pay
Monthly Fee
2
$6.95
Median
$6.95
Mode
$6.95
Minimum
$6.95
3
$6.95
QVIB. Figure 12.
N
0
1
Mean
Maximum
Bill Pay
Transaction
Fee
Tier 2
Valid
Missing
Bill pay
Monthly Fee
66
Bill pay
Transaction
Fee
17
17
66
Mean
$4.86
$.36
Median
$4.95
$.40
Mode
$4.95
$.00(a)
$.00
$.00
Minimum
Maximum
$6.95
Multiple modes exist. The smallest value is shown.
QVIB. Figure 13.
N
$.55
Tier 3
Valid
Missing
Bill pay
Monthly Fee
1025
Bill pay
Transaction
Fee
137
383
1271
Mean
$5.54
$.26
Median
$5.00
$.25
Mode
$5.95
$.00
Minimum
$.55
$.00
Maximum
$10.00
$.55
There are no differences among regions in bill payment fees for banks that charge fees.
209
Deposit Products
There are differences between urban and rural banks for the availability of ATM cards, debit cards,
and online bill payment. A larger percentage of rural banks (14.2 percent) charge fees for ATM card
access than urban banks (5.6 percent). Fourteen-percent (14.1 percent) of rural banks charge fees for
debit card access, compared with 7.4 percent of urban banks; and 20.0 percent of rural banks do not
offer online bill payment, compared with 6.8 percent of urban banks.
QVIB. Figure 14.
Urban and Rural
Availability of Payment Options in Most Basic Transaction Account
Check
Writing
Not offered
Co
unt
%
Included at
no cost
Co
unt
%
Available
for a fee
Co
unt
%
Total
Co
unt
%
Rural HQ
ATM
Debit
Card
Card
Urban HQ
Online
Bill Pay
Check
Writing
ATM Card
Debit Card
Online Bill
Pay
27
342
154
725
5
292
185
226
.7%
9.4%
4.1%
20.0%
.1%
9.0%
5.6%
6.8%
3323
2770
3033
2120
3089
2783
2878
2382
87.6%
76.3%
81.8%
58.4%
92.8%
85.4%
87.0%
71.8%
441
516
523
786
236
183
246
708
11.6%
14.2%
14.1%
21.7%
7.1%
5.6%
7.4%
21.4%
3792
3628
3710
3631
3330
3258
3309
3316
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
NSF Fees and Options
Question VI C. Does the bank charge a per-item NSF fee on its most basic
(lowest cost) transaction account?
Yes
No
Nearly all (99.2 percent) banks charge NSF fees on their most basic account, and less than 1 percent
of banks do not charge an NSF fee.
QVIC. Figure 1. Does the bank charge a NSF fee on its most basic account?
Valid
Missing
Total
Frequency
5
Weighted
Frequency
58
Yes
667
7234
99.2
Total
672
7293
100.0
13
147
685
7440
No
System
Weighted
Percent
.8
There are minimal differences among regions or tiers in the share of banks that charge NSF fees.
There is no difference between urban and rural banks for banks that charge NSF fees.
210
Deposit Products
Question VI C-1. If yes, what is the standard or typical NSF fee for this
account?
NSF fees range from $8.00 to $38.00, with a median of $25.00 and a mean of mean of $25.89.
QVIC-1. Figure 1. Standard NSF Fee
N
Valid
Missing
7206
28
Mean
$25.89
Median
$25.00
Mode
$25
Minimum
$8
Maximum
$38
There are differences among regions for NSF fee amounts. Banks in the West North Central (mean
of $23.05) and Pacific ($24.37) regions charge lower fees than those in the East North Central
($25.82), which charge lower fees than in the Mid Atlantic ($29.74) and South Atlantic ($30.64)
regions.
QVIC-1. Figure 2. New England:
Standard NSF Fee
N
Valid
Missing
Mean
Median
Mode
Minimum
Maximum
QVIC-1. Figure 5. East South Central:
Standard NSF Fee
N
405
Valid
Missing
669
0
$25.81
Mean
$27.82
$25.00
Median
$28.00
$25
Mode
$25
$16
Minimum
$20
$30
Maximum
$36
QVIC-1. Figure 3. Mid Atlantic:
Standard NSF Fee
N
Valid
Missing
14
QVIC-1. Figure 6. West South Central:
Standard NSF Fee
N
560
Valid
Missing
0
1136
14
Mean
$29.74
Mean
$24.16
Median
$30.00
Median
$25.00
Mode
$30
Mode
$25
Minimum
$15
Minimum
$10
Maximum
$38
Maximum
$35
QVIC-1. Figure 4. South Atlantic:
Standard NSF Fee
N
Valid
Missing
QVIC-1. Figure 7. East North Central:
Standard NSF Fee
N
860
Valid
Missing
0
1273
1
Mean
$30.64
Mean
$25.82
Median
$30.00
Median
$25.00
Mode
Minimum
Maximum
$30
Mode
$25
$20
Minimum
$10
$37
Maximum
$38
211
Deposit Products
QVIC-1. Figure 8. West North Central:
Standard NSF Fee
N
Valid
QVIC-1. Figure 10. Pacific:
Standard NSF Fee
N
1383
Missing
Valid
Missing
0
444
0
Mean
$23.05
Mean
$24.37
Median
$25.00
Median
$25.00
Mode
Mode
$25
$8
Minimum
$15
$35
Maximum
$30
$25
Minimum
Maximum
QVIC-1. Figure 9. Mountain:
Standard NSF Fee
N
Valid
476
Missing
0
Mean
$24.95
Median
$25.00
Mode
$25
Minimum
$18
Maximum
$34
There are differences among tiers in NSF fee amounts. Fees for Tier 3 (mean of $25.61) are lower
than for Tier 2 ($29.10) and Tier 1 ($30.55).
QVIC-1. Figure 11. Tiers: Standard NSF Fee
Tier 1
N
Valid
Missing
$30.55
Median
$31.50
Mode
$35
Minimum
$18
$38
N
Valid
Missing
538
0
Mean
$29.10
Median
$30.00
Mode
$30
Minimum
$15
Maximum
Tier 3
1
Mean
Maximum
Tier 2
24
N
$38
Valid
Missing
6645
27
Mean
$25.61
Median
$25.00
Mode
$25
Minimum
$8
Maximum
$37
212
Deposit Products
There is a difference between urban and rural banks in NSF fees charged. This may correlate with
differences associated with asset size, since more banks in Tier 3 tend to be rural banks and all Tier 1
banks are urban banks. The median for rural banks is $25.00, and the median for urban banks is
$28.00.
QVIC-1. Figure 12. Rural: Standard NSF Fee
N
Valid
Median
N
3864
Missing
Mean
QVIC-1. Figure 13. Urban: Standard NSF Fee
Valid
Missing
96
3390
90
$24.92
Mean
$27.48
$25.00
Median
$28.00
Mode
$25
Mode
$25
$15
$38
Minimum
$8
Minimum
Maximum
$37
Maximum
Question VI C-2. Does the bank offer any programs to cover or waive NSF
items on this account?
Yes
No
Over half (59.4 percent) of banks that charge NSF fees offer some type of program that will cover
or waive the fee.
QVIC-2. Figure 1. Does the bank offer programs to waive the NSF fee?
Valid
Frequency
243
Weighted
Frequency
2882
Weighted
Percent
40.6
Yes
412
4209
59.4
Total
655
7091
100.0
12
144
667
7234
No
Missing
System
Total
There are minimal differences between regions in the share of banks that had programs to cover or
waive NSF fees.
There is a difference between tiers for programs to cover or waive NSF fees. A higher percentage of
banks in Tier 2 offer programs to cover or waive NSF fees (75.8 percent) than banks in Tier 3 (57.9
percent).
QVIC-2. Figure 2. Tier
Does the bank offer programs to cover or
waive the NSF fee?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
5
Tier 2
128
Tier 3
2748
20.8%
24.2%
42.1%
20
402
3787
79.2%
75.8%
57.9%
25
531
6535
100.0%
100.0%
100.0%
213
Deposit Products
There is a difference between urban and rural banks for banks that offer programs to cover or waive
NSF fees. About two-thirds (62.8 percent) of urban banks offer programs to cover or waive the
fees, compared with 56.4 percent of rural banks.
QVIC-2. Figure 3. Urban/Rural
Does the bank offer
programs to cover or waive
the NSF fee?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
1672
Urban HQ
1210
43.6%
37.2%
2164
2045
56.4%
62.8%
3836
3255
100.0%
100.0%
Question VI C-2. a) If yes, please describe:
Of the surveyed banks, 410 described their programs to waive NSF fees.
Respondents reported two main ways to cover or waive NSF items: a line of credit or an automatic
transfer from one account to another to cover NSF items. Banks typically offer automatic transfers
at a lower fee than a line of credit, but this option may not be available for un/underbanked
individuals who do not have either an additional account or sufficient money in other accounts to
cover the NSF item(s). In this case, banks may offer customers a line of credit requiring them to pay
off the balance and interest within a 30 to 90 day period.
A majority (313) of respondents indicated that they offer Overdraft Protection (ODP), ODP
Lines of Credit, or Bounce Protection.
A total of 184 respondents reported offering an automatic sweep transfer from a separate
account to cover NSF items. Of these 184 banks, 19 describe a transfer fee, which can range
from $1.00 to $10.00, in order to move money from another account into the overdrawn
account. Three banks offer free transfer sweeps.
Seventy-two banks indicated that fees are charged with their NSF programs. Four banks offer a
line of credit with no initial fees attached, aside from the interest to be paid on the loan.
Nineteen banks reported either waving the first NSF fee completely or giving officers authority
to waive some or all of the fees.
Sixty-three respondents described an overdraft limit up to which they will cover NSF items.
These limits range from $100 to $50,000, which was cited by one bank. The mean overdraft
limit, excluding two extreme instances of $25,000 and $50,000, is $551.
214
Deposit Products
Question VIC-3. Does the bank offer “alerts” to notify customers with these
accounts of low balances or NSF transactions on this account?
Yes
No
Over half (54.4 percent) of banks that charge NSF fees offer alerts to notify customers of low
balances or NSF transactions.
QVIC-3. Figure 1. Does the bank offer alerts to notify customers of low balances or NSF fees?
Valid
Missing
Frequency
296
Weighted
Frequency
3280
Yes
365
3913
54.4
Total
661
7193
100.0
6
41
667
7234
No
System
Total
Weighted
Percent
45.6
There are no differences among regions or tiers in the provision of alerts to notify customers of
NSF fees.
There is little difference between urban and rural banks regarding alerts that notify customers of
NSF fees.
Question VI C-4. Will the bank automatically close this account if a
threshold number of NSF items are reached or there is a persistent negative
balance?
Yes
No
Over half (56.7 percent) of banks that charge NSF fees will automatically close an account after a
customer has reached a certain number of NSF items or a certain period of time with a negative
balance.
QVIC-4. Figure 1. Will the bank automatically close the account due to NSF fees or a negative balance?
Valid
Missing
Total
Frequency
280
Weighted
Frequency
3087
Yes
378
4045
56.7
Total
658
7132
100.0
No
System
9
103
667
7234
Weighted
Percent
43.3
215
Deposit Products
There are differences among regions for banks that will automatically close an account due to NSF
fees or a negative balance. There are differences between the New England region (85.3 percent)
and the Pacific (42.8 percent), East North Central (53.3 percent), West North Central (53.3 percent),
Mid-Atlantic (53.0 percent), and South Atlantic (51.5 percent) regions.
QVIC-4. Figure 2. Region
Will the bank automatically close the account due to NSF fees or a negative balance?
No
Count
%
Yes
Count
%
Total
Count
%
New
England
62
MidAtlantic
257
South
Atlantic
417
East
South
Central
238
West
South
Central
434
East
North
Central
575
West
North
Central
646
Mountain
205
Pacific
252
14.7%
47.0%
48.5%
36.3%
38.7%
46.7%
46.7%
43.1%
57.2%
357
290
442
417
688
655
736
271
189
85.3%
53.0%
51.5%
63.7%
61.3%
53.3%
53.3%
56.9%
42.8%
418
546
860
655
1122
1230
1383
476
441
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are no differences among tiers for banks that automatically close an account due to NSF fees
or negative balances.
There is no difference between urban and rural banks for banks that automatically close an account
due to NSF fees or negative balances.
Question VI C-4. a) If yes, what is the monthly threshold?
Responses vary for the 277 responding banks. Eighty-three banks report that they will close
accounts based on a number of NSF items per month, ranging from one to 500, and 156 other
banks report that they will close accounts based on a consistent negative balance over the course of
a specified amount of time, ranging from 10 days to 180 days. Thirty-eight banks report that they
will review accounts on an individual basis or that their policies vary for each situation.
One bank that closes accounts with a consistent negative balance said that they will offer their
“Fresh Start” program to individuals after 25 days in the red. This program charges no fees and
allows individuals to keep their existing accounts.
216
Deposit Products
Chapter
9
Savings Accounts
This chapter examines the following topics:
Basic Savings Accounts
Individual Development Accounts
IRS VITA Program
Money Market Accounts
Specialized Savings Clubs
Workplace and School-Based Savings Accounts
Interest Rates
These questions address aspects of the Congressional Question 4: barriers which may prevent un/underbanked
individuals from establishing a savings account.
Summary
Most banks offer basic savings and money market deposit accounts for balances of $500 or
less. While basic savings accounts are nearly universal and are offered by an estimated 97 percent of
banks, money market deposit accounts are offered by fewer than three-quarters (70 percent) of
banks. Half (50 percent) of banks offer specialized savings clubs.
A minority of banks offer workplace-based programs, individual deposit accounts (IDAs),
and IRS VITA programs. Only 7 percent of banks offer existing savings accounts through
workplace-based programs, 8 percent offer IDAs, and 3 percent offer IRS VITA site programs that
facilitate savings. These accounts and programs are important for outreach into the community to
attract un/underbanked individuals into the conventional banking system through savings products.
Interest rates are typically very low for savings accounts. The mean rate is about 1 percent or
less for all savings accounts except for individual development accounts, which is 1.2 percent.
Less than a quarter (22 percent) of the banks work with organizations to promote any kind
of savings products. Banks partner with schools to attract youth and partner with local business to
increase comfort with the banking system for the un/underbanked.
217
Savings Accounts
Basic Savings Accounts
Question VII A. For savings accounts with balances of $500 or less, which,
if any, of the following accounts are offered and what are the interest rates
paid on the accounts?
QVIIA. Figure 1. Savings Accounts and Programs
Product/Service
Offer for Customer?
Interest Rate Offered (as of
Dec. 31, 2007)
Basic Savings (non-transactional)
96.9%
0.80%
Money Market Deposit Accounts
69.5%
1.07%
Specialized Savings Clubs
49.9%
0.93%
Other (please describe):
19.5%
1.69%
Individual Development Accounts
7.6%
1.20%
Workplace-based Programs
7.4%
0.90%
IRS VITA Program (direct deposit or
split refund)
3.2%
0.49%
The majority of banks offer basic savings accounts (96.9 percent) and money market deposit
accounts (69.5 percent). A much smaller percentage of banks offer workplace-based programs (7.4
percent) and individual development accounts (7.6 percent). The average interest rate for a basic
savings account is 0.80 percent, compared with 1.07 percent for money market accounts.
QVIIA. Figure 2. Does the bank offer basic savings accounts?
Valid
Missing
Total
Frequency
20
Weighted
Frequency
222
Yes
648
7016
96.9
Total
668
7238
100.0
No
System
17
202
685
7440
Weighted
Percent
3.1
218
Savings Accounts
There are minimal differences among regions or tiers for banks that offer a basic savings account.
QVIIA. Figure 3. Basic Savings Interest Rate
N
Valid
6507
Missing
933
Mean
.7993
Median
.7000
Mode
.50
Minimum
.00
Maximum
4.51
There is a difference between tiers for basic savings account interest rates. Tier 1 banks offer the
lowest median interest rate of 0.25 percent, compared with 0.50 percent for Tier 2 and 0.75 percent
for Tier 3.
QVIIA. Figure 4. Tier: Basic Savings Interest Rate
Tier 1
N
Valid
Missing
Tier 2
2
Mean
.3136
Median
.2500
Mode
.10(a)
Minimum
.05
Maximum
1.00
N
Valid
Missing
468
83
Mean
.6622
Median
.5000
Mode
Tier 3
23
.50
Minimum
.05
Maximum
4.51
N
Valid
Missing
6016
848
Mean
.8118
Median
.7500
Mode
.50
Minimum
.00
Maximum
3.25
Multiple modes exist. The smallest value is shown.
219
Savings Accounts
There are differences among regions for interest rates offered on basic savings accounts. The
median rate in the New England, Mid-Atlantic, Pacific, and East North Central regions (0.50
percent) are lower than rates offered by banks in the South Atlantic (0.85 percent) and Mountain
(0.95 percent) regions.
QVIIA. Figure 5. New England:
Basic Savings Interest Rate
N
Valid
405
Missing
41
Mean
.6889
Median
.5000
Mode
.50
Minimum
.10
Maximum
2.00
QVIIA. Figure 9. West South Central:
Basic Savings Interest Rate
N
Valid
1047
Missing
130
Mean
.8681
Median
.7500
Mode
.50
Minimum
.00
Maximum
2.50
QVIIA. Figure 6. Mid-Atlantic:
Basic Savings Interest Rate
N
Valid
512
Missing
69
Mean
.7609
Median
.5000
Mode
.50
Minimum
.00
Maximum
3.20
QVIIA. Figure 10.
N
Mean
Median
Mode
Minimum
Maximum
East North Central:
Basic Savings Interest Rate
Valid
1196
Missing
120
.6899
.5000
.50
.00
3.25
QVIIA. Figure 11.
QVIIA. Figure 7. South Atlantic:
Basic Savings Interest Rate
N
Valid
702
Missing
157
Mean
.9633
Median
.8500
Mode
.50
Minimum
.05
Maximum
4.51
N
West North Central:
Basic Savings Interest Rate
Valid
1221
Missing
Mean
.7545
Median
.6800
Mode
QVIIA. Figure 8. East South Central:
Basic Savings Interest Rate
N
Valid
577
Missing
106
Mean
.7732
Median
.7500
Mode
1.00
Minimum
.10
Maximum
3.93
189
.50
Minimum
.00
Maximum
2.50
QVIIA. Figure 12.
N
Mean
Median
Mode
Minimum
Maximum
Mountain:
Basic Savings Interest Rate
Valid
463
Missing
44
.9625
.9500
.50
.00
2.75
QVIIA. Figure 13.
N
Mean
Median
Mode
Minimum
Maximum
220
Pacific:
Basic Savings Interest Rate
Valid
385
Missing
76
.8047
.5000
.25
.10
2.25
Savings Accounts
Individual Development Accounts
Overall, 7.6 percent of the banks offer IDAs.
QVIIA. Figure 14.
Valid
Does the bank offer Individual Development Accounts?
Frequency
517
No
Missing
Weighted
Frequency
5876
Weighted
Percent
92.4
Yes
68
482
7.6
Total
585
6358
100.0
System
100
1081
685
7440
Total
There are minimal differences among regions for banks that offer Individual Development
Accounts.
There is a difference among tiers for banks that offer IDAs. Each tier is different from the others,
with the highest percentage of banks offering IDAs in Tier 1 (50.0 percent), followed by Tier 2 (22.1
percent) and Tier 3 (6.3 percent).
QVIIA. Figure 15.
Rate by Tier
Does the bank offer Individual Development
Accounts?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
13
Tier 2
354
Tier 3
5510
50.0%
77.9%
93.7%
13
101
369
50.0%
22.1%
6.3%
25
454
5879
100.0%
100.0%
100.0%
Overall, the median interest rate for IDAs is 0.75 percent, and the mean is 1.20 percent.
QVIIA. Figure 16.
N
Individual Development Account Interest Rate
Valid
Missing
Mean
Median
416
7024
1.1960
.7500
Mode
.50
Minimum
.00
Maximum
4.75
221
Savings Accounts
There is a difference between tiers for IDA interest rates. Smaller banks tend to offer a higher
interest rate; Tier 3 banks have a median of 1.0 percent, compared with 0.40 percent in Tier 2 and
0.20 percent in Tier 1.
QVIIA. Figure 17.
N
Tier 1:
Individual Development
Account Interest Rate
Valid
Missing
QVIIA. Figure 19.
N
8
Tier 3:
Individual Development
Account Interest Rate
Valid
Missing
17
328
6535
Mean
.2306
Mean
1.3617
Median
.2000
Median
1.0000
Mode
.20
Mode
Minimum
.01
Minimum
.00
Maximum
.55
Maximum
4.75
1.00
a Multiple modes exist. The smallest value is shown
QVIIA. Figure 18.
N
Tier 2:
Individual Development
Account Interest Rate
Valid
Missing
80
472
Mean
.6153
Median
.4000
Mode
.50
Minimum
.00
Maximum
4.25
There are no differences among regions for individual development account interest rates.
222
Savings Accounts
IRS VITA Programs
Very few banks (3.2 percent) participate in IRS VITA programs. These programs help banks offer
existing savings accounts to VITA customers.
QVIIA. Figure 20.
Valid
Does the bank offer IRS VITA programs?
Frequency
537
Weighted
Frequency
5921
Weighted
Percent
96.8
Yes
26
195
3.2
Total
563
6116
100.0
System
122
1324
685
7440
No
Missing
Total
There are no differences among regions for banks that participate in IRS VITA programs.
There is a difference between tiers for banks that participate in IRS VITA programs. A higher
percentage of Tier 1 banks (14.3 percent) participate in IRS VITA programs than Tier 3 banks (2.7
percent).
QVIIA. Figure 21.
Tier
Does the bank offer IRS VITA programs?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
19
Tier 2
406
Tier 3
5496
85.7%
90.7%
97.3%
3
42
150
14.3%
9.3%
2.7%
22
447
5647
100.0%
100.0%
100.0%
The overall median interest rate for IRS VITA programs is 0.25 percent, and the mean is 0.49
percent.
QVIIA. Figure 22.
N
Weighted Statistics: IRS VITA Interest Rate
Valid
Missing
167
7273
Mean
.4905
Median
.2500
Mode
.50
Minimum
.00
Maximum
4.50
There are minimal differences between tiers or regions in IRS VITA program interest rates.
223
Savings Accounts
Money Market Accounts
Over two-thirds (69.5 percent) of banks offer Money Market Accounts (MMA).
QVIIA. Figure 23.
Valid
Missing
Does the bank offer Money Market accounts?
Frequency
189
Weighted
Frequency
2085
Yes
440
4755
69.5
Total
629
6840
100.0
No
System
Total
56
600
685
7440
Weighted
Percent
30.5
There are minimal differences among regions and tiers in the percent of banks that offer Money
Market Accounts.
The overall median interest rate for an MMA is 1.00 percent, and the mean is 1.07 percent.
QVIIA. Figure 24.
N
Weighted Statistics: MMA Interest Rate
Valid
3922
Missing
3518
Mean
1.0678
Median
1.0000
Mode
1.00
Minimum
.00
Maximum
4.25
There are no differences among tiers or regions for MMA interest rates.
Specialized Savings Accounts
About half (49.9 percent) of banks offer specialized savings clubs.
QVIIA. Figure 25.
Valid
Missing
Total
Does the bank offer specialized savings clubs?
Frequency
303
Weighted
Percent
3305
Weighted
Percent
50.1
Yes
301
3298
49.9
Total
604
6602
100.0
81
837
685
7440
No
System
224
Savings Accounts
A smaller percentage of Mountain (22.4 percent), Pacific (25.1 percent), and West South Central
(27.4 percent) banks offer specialized savings clubs than New England (80.6 percent), Mid-Atlantic
(78.7 percent), and East North Central (76.3 percent) banks.
QVIIA. Figure 26.
No
Count
New
England
80
MidAtlantic
115
19.4%
21.3%
%
Yes
Count
64.3%
43.3%
72.6%
23.7%
Mountain
332
Pacific
299
77.6%
74.9%
56.5%
332
424
271
325
277
914
557
96
100
78.7%
35.7%
56.7%
27.4%
76.3%
43.5%
22.4%
25.1%
411
539
760
573
1013
1198
1280
428
400
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Does the bank offer specialized savings clubs?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
489
248
736
284
723
80.6%
%
Total
Region
There are no differences among tiers for banks that offer specialized savings clubs.
Overall, the median interest rate for specialized savings accounts is 0.70 percent, and the mean is
0.93 percent.
QVIIA. Figure 27.
N
Weighted Statistics: Specialized Savings Interest Rate
Valid
2797
Missing
4643
Mean
.9292
Median
.7000
Mode
.50
Minimum
.00
Maximum
5.25
There are no differences among tiers or regions for specialized savings club interest rates.
Workplace-Based Savings Accounts
Few (7.4 percent) banks offer workplace-based savings accounts.
QVIIA. Figure 28.
Valid
Missing
Total
No
Does the bank offer workplace-based savings programs?
Frequency
501
Weighted
Frequency
5734
Weighted
Percent
92.6
Yes
71
460
7.4
Total
572
6193
100.0
System
113
1247
685
7440
225
Savings Accounts
There are differences among regions for banks that offer workplace-based savings accounts. A
smaller percentage of banks in the West South Central region (1.8 percent) offer workplace-based
savings accounts than banks in the New England region (21.4 percent).
QVIIA. Figure 29.
No
Count
New
England
302
%
Yes
78.6%
Count
86.6%
92.9%
95.4%
98.2%
88.1%
95.6%
94.9%
Pacific
370
95.3%
82
59
50
25
17
133
52
22
18
13.4%
7.1%
4.6%
1.8%
11.9%
4.4%
5.1%
4.7%
384
444
706
543
982
1120
1198
429
388
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
Does the bank offer workplace-based savings programs?
East
West
East
West
MidSouth
South
South
North
North
Atlantic
Atlantic
Central
Central
Central
Central Mountain
384
655
518
965
987
1145
407
21.4%
%
Total
Region
There are differences among tiers for banks that offer workplace-based savings accounts. About half
(56.5 percent) of Tier 1, 26.0 percent of Tier 2, and 5.7 percent of Tier 3 banks offer workplacebased savings accounts.
QVIIA. Figure 30.
Tier
Does the bank offer workplace-based savings
programs?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
10
336
Tier 3
5387
43.5%
74.0%
94.3%
14
118
328
56.5%
26.0%
5.7%
24
454
5715
100.0%
100.0%
100.0%
Overall, the median interest rate for workplace-based accounts is 0.50 percent, and the mean is 0.90
percent.
QVIIA. Figure 31.
N
Workplace Interest Rate
Valid
Missing
353
7086
Mean
.8976
Median
.5000
Mode
.00
Minimum
.00
Maximum
7.50
There are no differences among tiers or regions for workplace-based savings account interest rates.
226
Savings Accounts
Sixty-five banks offer other savings products. Respondent comments most frequently mention:
accounts for minors (13), Christmas/holiday clubs (7), health savings (6), individual retirement
accounts (IRAs) (5), and certificates of deposit (CDs) (4).
QVIIA. Figure 32.
Valid
Does the bank offer other savings accounts?
Frequency
195
Weighted
Frequency
2269
Weighted
Percent
80.5
Yes
65
551
19.5
Total
260
2819
100.0
System
425
4621
685
7440
No
Missing
Total
There are differences among regions for banks that offer other types of savings accounts. No banks
in the Mountain region offer other accounts, compared with 32.4 percent of banks in the East
North Central region.
QVIIA. Figure 33.
No
Count
New
England
114
MidAtlantic
183
73.5%
78.9%
%
Yes
Count
%
Total
Region
Count
%
Does the bank offer other savings accounts?
East
West
East
West
South
South
South
North
North
Central
Central
Central
Central
Atlantic
311
237
315
386
390
81.3%
81.3%
86.0%
67.6%
85.1%
Mountain
168
Pacific
164
100.0%
85.2%
41
49
72
55
51
186
68
29
26.5%
21.1%
18.7%
18.7%
14.0%
32.4%
14.9%
14.8%
155
233
383
292
366
572
458
168
193
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There are differences among tiers for banks that offer other types of savings accounts. Over twothirds (69.2 percent) of Tier 1 banks and 39.3 percent of Tier 2 banks offer other savings accounts,
compared with 17.8 percent of Tier 3 banks.
QVIIA. Figure 34.
Tier
Does the bank offer other savings accounts?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
4
Tier 2
118
Tier 3
2147
30.8%
60.7%
82.2%
9
76
465
69.2%
39.3%
17.8%
14
194
2611
100.0%
100.0%
100.0%
227
Savings Accounts
The overall median interest rate for other types of savings accounts is 1.29 percent, and the mean is
1.69 percent.
QVIIA. Figure 35.
N
Other Account Interest Rate
Valid
Missing
497
6943
Mean
1.6905
Median
1.2900
Mode
.50
Minimum
.00
5.00
The differences among tiers or regions for other types of savings account interest rates are minimal.
There are differences between urban and rural banks for certain types of savings accounts offered,
including IDAs, workplace-based, and other types of savings accounts. Overall, a larger percentage
of urban banks offer these savings programs than rural banks.
QVIIA. Figure 36.
Rural
Types of Savings Accounts Offered
No
Yes
Individual
Development
Accounts
3128
IRS VITA
Program
3193
%
2.6%
94.1%
97.7%
32.1%
Count
3744
195
75
2493
97.4%
5.9%
2.3%
67.9%
Count
%
Total
Rural HQ
Money
Specialized
Market
Savings
Accounts
Clubs
1176
1703
Basic
Savings
Accounts
99
Count
%
WorkplaceBased Savings
Programs
3132
Other Savings
Accounts
1231
48.5%
95.0%
85.9%
1809
164
202
51.5%
5.0%
14.1%
3843
3323
3269
3669
3511
3296
1432
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
WorkplaceBased Savings
Programs
2602
Other Savings
Accounts
1038
74.9%
QVIIA. Figure 37.
Urban
Types of Savings Accounts Offered
No
Yes
Individual
Development
Accounts
2748
IRS VITA
Program
2727
%
3.6%
90.5%
95.8%
28.6%
51.8%
89.8%
Count
3272
287
120
2263
1489
295
349
96.4%
9.5%
4.2%
71.4%
48.2%
10.2%
25.1%
Count
%
Total
Urban HQ
Money
Specialized
Market
Savings
Accounts
Clubs
908
1602
Basic
Savings
Accounts
123
Count
%
3395
3035
2847
3171
3091
2897
1387
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
228
Savings Accounts
There is also a difference between urban and rural banks in the interest rates banks offer for IDAs
and workplace-based accounts. The median interest rate for rural bank IDAs is 1.25 percent, and the
median for urban IDAs is 0.53 percent. The median for rural workplace accounts is 1.10 percent,
and the median for urban workplace accounts is 0.40 percent.
QVIIA. Figure 38.
N
Rural
Valid
Missing
Basic
Savings
Interest
Rate
3511
Individual
Development
Interest Rate
133
IRS VITA
Interest
Rate
34
MMA
Interest
Rate
2110
Specialized
Savings
Interest
Rate
1521
Workplace
Interest
Rate
103
Other
Account
Interest
Rate
198
448
3826
3925
1850
2438
3857
3761
Mean
.8132
1.7933
.4839
1.0982
1.0007
2.0004
1.8469
Median
.7500
1.2500
.1500
1.0000
.7500
1.1000
1.6450
.50
.15
.15
1.00
.50
1.00
.50
Mode
Minimum
.00
.15
.10
.00
.00
.00
.00
Maximum
3.00
4.75
1.00
4.25
5.00
7.50
5.00
Individual
Development
Interest Rate
283
IRS VITA
Interest
Rate
132
MMA
Interest
Rate
1812
Specialized
Savings
Interest
Rate
1275
Workplace
Interest
Rate
251
Other
Account
Interest
Rate
299
QVIIA. Figure 39.
N
Valid
Missing
Urban
Basic
Savings
Interest
Rate
2996
485
3198
3348
1668
2205
3230
3182
Mean
.7830
.9141
.4922
1.0323
.8438
.4462
1.5866
Median
.6000
.5271
.3750
.8646
.6000
.4000
1.0000
Mode
.50
.50
.50
.50
.25
.50
.00
Minimum
.00
.00
.00
.00
.00
.00
.00
Maximum
4.51
4.25
4.50
3.93
5.25
3.00
4.34
229
Savings Accounts
Workplace and School-Based Savings Programs
Question VII B. Does the bank partner with organizations (e.g., by
operating a high school branch or employer location) to promote savings
products?
Yes
No
Less than a quarter (22.1 percent) of banks partner with other organizations to promote savings
products.
QVIIB. Figure 1. Does the bank partner with organizations to promote savings products?
Valid
Frequency
480
Weighted
Frequency
5703
Weighted
Percent
77.9
Yes
194
1616
22.1
Total
674
7320
100.0
11
120
685
7440
No
Missing
System
Total
A smaller percentage of banks in the West North Central region (12.8 percent) partner with
organizations to promote savings products compared with banks in the East North Central (27.0
percent), East South Central (27.2 percent), and New England (43.0 percent) regions.
QVIIB. Figure 2. Region
Does the bank partner with organizations to promote savings products?
No
Count
%
Yes
Count
%
Total
Count
%
New
England
254
MidAtlantic
463
South
Atlantic
685
East
South
Central
497
West
South
Central
876
East
North
Central
928
West
North
Central
1217
Mountain
424
Pacific
360
57.0%
82.2%
79.7%
72.8%
76.2%
73.0%
87.2%
83.6%
81.0%
192
100
175
186
274
343
179
83
85
43.0%
17.8%
20.3%
27.2%
23.8%
27.0%
12.8%
16.4%
19.0%
446
563
860
683
1150
1271
1396
507
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is a difference between tiers for banks that partner with organizations to promote savings
products. Over three-quarters (79.2 percent) of Tier 1 banks, 50.0 percent of Tier 2 banks, and 19.6
percent of Tier 3 banks partner with other organizations.
230
Savings Accounts
QVIIB. Figure 3. Tier
Does the bank partner with organizations to
promote savings products?
Tier 1
No
%
Yes
271
20.8%
50.0%
80.4%
Count
%
Total
5
Tier 3
5428
Count
20
271
1326
79.2%
50.0%
19.6%
25
541
6754
100.0%
100.0%
100.0%
Count
%
Tier 2
There is a difference between urban and rural banks for banks that partner with organizations to
promote savings products. About a fifth (18.9 percent) of rural banks partner, compared with 25.8
percent of urban banks.
QVIIB. Figure 4. Urban/Rural
Does the bank partner with organizations to
promote savings products?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
3176
2528
81.1%
74.2%
739
878
18.9%
25.8%
3915
3405
100.0%
100.0%
Question VII B-1.If yes, please describe.
Of the 194 respondents that reported partnering with organizations to promote savings products,
176 described the organizations with which they partner.
Respondents reported viewing partnering as an opportunity to develop relationships with local
employers and their employees and to gain exposure with youth in the community through school
partnerships. Comments indicated attempts to reach out to minors at a young age and show them
the benefits offered by banks. Banks also view partnering with local businesses and giving
presentations to employees as a means of attracting more business. Partnering with a trusted source,
such as an employer, is viewed by respondents as a way of gaining credibility and building trust with
unbanked and underbanked employees.
About two-thirds (118 of 176) of responding banks partner with educational institutions from
elementary schools through colleges. They use the ABA Teach Children to Save Day, Junior
Achievement, Saving Makes Cents, FDIC Money Smart, and Bank-at-School programs.
The second most common type of organization with which banks partner is local employers. A
third (57 of 176) of respondents either offer Bank-at-Work programs or visit workplaces to
provide informational sessions.
A fifth (37 of 176) of banks reported working with community or non-profit organizations to
promote savings products. IDAs are one of the most frequently identified products offered to
organizations’ unbanked and underbanked clientele.
231
Savings Accounts
232
Savings Accounts
Chapter
10
Payments Products
This chapter examines the following topics:
Availability of Funds for Established Customers
Advance Loans
These questions address aspects of the Congressional Question 4: barriers which may prevent un/underbanked
individuals from cashing checks.
Summary
On-us checks drawn on the bank receive the fastest funds availability for established
customers when cashing checks (beyond the $100 specified by Reg. CC). The majority of banks
provide customers presenting on-us checks current day funds availability, with universal funds
availability by the second business day. On-us business checks receive current business day
availability at an estimated 63 percent of banks and next business day availability at 36 percent of
banks. Customers presenting on-us personal checks receive current business day funds availability at
64 percent of banks and next business day availability at 36 percent of banks. Funds from
government checks are available on the same day that the check is deposited at 50 percent of banks,
and double-endorsed checks have the slowest funds availability, with 24 percent of banks providing
same business day availability and 35 percent with next business day availability.
Banks provide relatively slow funds availability when cashing payroll checks, which can
limit the attractiveness of maintaining an account for some individuals relative to using a
nonbank check cashing service. A majority of banks will not provide same day availability for
local payroll checks not drawn on the bank for established customers. Fifty percent make funds
available the next day, and 17 percent will make funds available on the second business day.
Only about 6 percent of banks provide an advance loan on funds that are due to arrive from
a deposited check or a regularly scheduled direct deposit. Typically, banks that provide an
advance loan only provide it on regularly scheduled direct deposit funds and government checks.
Availability of Funds for Established Customers
Banks’ funds availability policies are most favorable for on-us checks, where over 62 percent of
banks provide same day availability. Checks drawn on other banks are more likely to have next
business day availability than same day availability. For example, about half (49.6 percent) of banks
have next day availability for local payroll checks, compared with 32 percent that have current
business day availability.
233
Payments Products
Question VIII A. How soon (in terms of number of business days), beyond
the $100 specified by Reg. CC, are funds ordinarily available for an
established customer who presents the following items?
QVIIIA. Figure 1.
Funds Availability
Check value is $2,500 or less
Business check drawn on your bank (On-us)
Personal check drawn on your bank (On-us)
Payroll check not drawn on your bank (Local)
Business check not drawn on your bank (Local)
Personal check not drawn on your bank (Local)
Government check
Double endorsed check from a third-party
QVIIIA. Figure 2.
Valid
Next
Business
Day
36.4%
35.5%
49.6%
48.0%
47.0%
48.0%
35.2%
Second
Business
Day
0.8%
0.6%
16.5%
21.0%
21.2%
0.6%
8.4%
Three or
More
Business
Days
0%
0%
1.8%
3.2%
5.2%
1.0%
32.6%
How soon are funds available for a business check drawn on your bank?
Current day
Next day
Frequency
392
Weighted
Frequency
4560
Weighted
Percent
62.9
273
2637
36.4
4
55
.8
669
7252
100.0
16
188
685
7440
Second day
Total
Missing
Current
Business
Day
62.9%
64.0%
32.1%
27.8%
26.6%
50.4%
23.7%
System
Total
There are differences among regions in terms of how soon funds are available for on-us business
checks. Banks in the New England region make funds available sooner (85.2 percent available same
day) than banks in the Mid-Atlantic (46.4 percent same day) and Mountain (47.5 percent same day)
regions.
QVIIIA. Figure 3.
Region
How soon are funds available for a business check drawn on your bank?
New
England
Current
day
Count
%
Next
day
Count
%
Second
day
%
East
South
Central
West
South
Central
East
North
Central
West
North
Central
Mountain
Pacific
249
525
359
595
894
1008
220
329
85.2%
46.4%
61.1%
54.8%
51.1%
69.4%
72.2%
47.5%
74.0%
66
274
307
296
568
380
388
243
115
14.8%
51.1%
35.7%
45.2%
48.9%
29.5%
27.8%
52.5%
26.0%
14
27
Count
Count
South
Atlantic
380
%
Total
MidAtlantic
14
2.6%
3.2%
446
536
860
655
1163
1.1%
1288
1396
463
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
234
Payments Products
There is a difference between tiers in terms of how soon funds are made available for a business
check cashed on the bank. Tier 3 banks make funds available more quickly (64.6 percent with same
day availability) than banks in Tier 2 (42.3 percent with same day availability) or Tier 1 (41.7 percent
with same day availability).
QVIIIA. Figure 4. Tier
How soon are funds available for a business check
drawn on your bank?
New Tier
Current
day
Tier 1
Count
%
Next day
Count
%
Second
day
Tier 2
Tier 3
10
229
4320
41.7%
42.3%
64.6%
15
312
2311
58.3%
57.7%
34.6%
Count
55
%
Total
Count
%
.8%
25
541
6686
100.0%
100.0%
100.0%
There is no difference between urban and rural banks in how soon funds are available for a business
check cashed on the bank.
QVIIIA. Figure 4. How soon are funds available for a personal check drawn on your bank?
Valid
Current day
Next day
Second day
Total
Missing
Total
System
Frequency
401
Weighted
Frequency
4642
Weighted
Percent
64.0
266
2572
35.5
3
41
.6
670
7255
100.0
15
185
685
7440
There are differences among regions in funds availability for on-us personal checks. New England
banks make funds availability sooner than banks in West South Central and Mid Atlantic, which is
similar to funds availability for on-us business checks. In this case, 85.2 percent of banks in New
England offer same day funds availability for on-us personal checks, compared with 48.0 percent of
Mid Atlantic and 48.3 percent of Mountain banks.
235
Payments Products
QVIIIA. Figure 5.
Region
How soon are funds available for a personal check drawn on your bank?
New
England
Current
day
Count
%
Next
day
East
North
Central
West
North
Central
Mountain
Pacific
512
376
609
912
1036
223
329
85.2%
48.0%
60.5%
57.4%
52.3%
70.8%
74.2%
48.3%
74.0%
66
274
320
279
555
363
360
239
115
14.8%
49.5%
37.9%
42.6%
47.7%
28.2%
25.8%
51.7%
26.0%
14
14
Count
14
2.5%
1.6%
446
553
846
655
1163
1288
1396
463
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
West
South
Central
266
%
Total
East
South
Central
South
Atlantic
380
Count
%
Second
day
Mid
Atlantic
1.1%
There is a difference between tiers in funds availability of on-us personal checks. Funds are made
available sooner by Tier 3 banks (65.6 percent same day) than for either Tier 1 (41.7 percent same
day) or Tier 2 (44.6 percent same day), which mirrors on-us business checks.
QVIIIA. Figure 6.
Tier
How soon are funds available for a personal check
drawn on your bank?
New Tier
Current
day
Tier 1
Count
%
Next day
Second
day
Tier 3
10
243
4389
41.7%
44.6%
65.6%
15
302
2256
58.3%
55.4%
33.7%
Count
%
Tier 2
Count
41
%
Total
.6%
Count
%
25
544
6686
100.0%
100.0%
100.0%
There is not a difference between urban and rural banks for funds availability of on-us personal
checks.
QVIIIA. Figure 7.
Valid
How soon are funds available for a payroll check not drawn on your bank?
Frequency
194
Weighted
Frequency
2323
Weighted
Percent
32.1
Next day
345
3594
49.6
Second day
119
1194
16.5
11
130
1.8
669
7241
100.0
16
198
685
7440
Current day
Three or more days
Total
Missing
Total
System
236
Payments Products
There are differences among regions in funds availability for local payroll checks. Banks in West
North Central (41.4 percent same day) and East North Central (40.9 percent same day) regions
make funds available more quickly for local payroll checks than banks in the Mid-Atlantic region
(18.7 percent same day).
QVIIIA. Figure 8.
Region
How soon are funds available for a payroll check not drawn on your bank?
New
England
Current
day
Count
%
Second
day
East
North
Central
West
North
Central
Mountain
Pacific
236
314
521
578
130
100
30.7%
18.7%
23.5%
36.8%
27.0%
40.9%
41.4%
28.1%
23.1%
261
246
434
286
715
480
682
270
219
58.6%
43.5%
50.5%
44.6%
61.5%
37.6%
48.8%
58.4%
50.9%
48
201
210
120
120
243
109
63
81
10.8%
35.4%
24.4%
18.7%
10.3%
19.1%
7.8%
13.5%
18.8%
14
14
14
31
27
31
2.4%
1.6%
1.2%
2.4%
2.0%
446
567
860
642
1163
1274
1396
463
431
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
%
West
South
Central
202
Three or Count
more
days
%
Total
East
South
Central
106
Count
%
South
Atlantic
137
Next day Count
%
MidAtlantic
7.2%
There are differences among tiers in funds availability for local payroll checks. Funds are made
available sooner by Tier 3 banks (33.2 percent same day) than by Tier 2 banks (19.7 percent same
day).
QVIIIA. Figure 9.
Tier
How soon are funds available for a payroll check
not drawn on your bank?
New Tier
Current day
Tier 1
Count
%
Next day
Count
%
Second day
Count
%
Three or more
days
Tier 2
1
108
Tier 3
2215
4.2%
19.7%
33.2%
18
309
3268
70.8%
56.7%
49.0%
6
121
1066
25.0%
22.3%
16.0%
7
123
1.3%
1.8%
Count
%
Total
Count
%
25
544
6672
100.0%
100.0%
100.0%
237
Payments Products
There is no difference between urban and rural banks in funds availability for local payroll checks.
QVIIIA. Figure 10. How soon are funds available for a local business check not drawn on your bank?
Valid
Frequency
168
Weighted
Frequency
2009
Weighted
Percent
27.8
Next day
335
3478
48.0
Second day
146
1522
21.0
Current day
Three or more days
Total
Missing
System
Total
19
229
3.2
668
7238
100.0
17
202
685
7440
There are differences among regions for funds availability for local business checks not drawn on
the bank. West North Central banks (40.4 percent same day) make funds available sooner than New
England (15.3 percent same day) and Mid-Atlantic (11.1 percent same day) banks.
QVIIIA. Figure 11. Region
How soon are funds available for a business check not drawn on your bank?
New
England
Current
day
Count
Total
West
South
Central
East
North
Central
West
North
Central
Mountain
Pacific
147
209
287
456
564
116
100
15.3%
11.1%
17.1%
31.2%
24.8%
35.8%
40.4%
25.9%
23.1%
254
250
455
272
667
490
641
229
219
57.0%
45.2%
52.9%
40.7%
57.5%
38.5%
45.9%
51.0%
50.9%
120
228
230
174
151
284
164
90
81
26.9%
41.2%
26.8%
26.1%
13.0%
22.3%
11.8%
20.0%
18.8%
3
14
27
14
55
44
27
14
31
%
.8%
2.5%
3.2%
2.0%
4.7%
3.5%
2.0%
3.0%
7.2%
Count
446
553
860
669
1160
1274
1396
449
431
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Count
Count
%
Three
or
more
days
East
South
Central
62
%
Second
day
South
Atlantic
68
%
Next
day
Mid
Atlantic
Count
%
There are minimal differences between tiers in funds availability of local business checks not drawn
on the bank.
238
Payments Products
There is little difference between urban and rural banks in funds availability of local business checks
that were not drawn on the bank.
QVIIIA. Figure 12. How soon are funds available for a personal check not drawn on your bank?
Valid
Frequency
161
Weighted
Frequency
1913
Weighted
Percent
26.6
Next day
326
3383
47.0
Second day
147
1528
21.2
31
373
5.2
665
7197
100.0
20
243
685
7440
Current day
Three or more days
Total
Missing
System
Total
There are differences among regions in funds availability for local personal checks that are not
drawn on the bank. West North Central banks (40.4 percent same day) make funds available sooner
than New England (15.3 percent same day) and Mid Atlantic (11.1 percent same day) banks.
QVIIIA. Figure 13. Region
How soon are funds available for a personal check not drawn on your bank?
New
England
Current
day
Count
%
Next
day
Count
%
Second
day
Count
%
Three
or
more
days
South
Atlantic
East
South
Central
West
South
Central
East
North
Central
West
North
Central
Mountain
Pacific
68
62
147
209
273
388
564
103
100
15.3%
11.1%
17.4%
31.2%
23.6%
30.7%
40.4%
22.9%
23.9%
213
251
424
259
661
476
641
243
216
47.8%
45.3%
50.1%
38.6%
56.9%
37.8%
45.9%
54.1%
51.8%
147
224
244
147
171
284
137
104
71
33.0%
40.4%
28.9%
22.0%
14.8%
22.5%
9.8%
23.1%
16.9%
17
17
31
55
55
113
55
31
3.8%
3.1%
3.6%
8.2%
4.7%
9.0%
3.9%
7.4%
Count
%
Total
MidAtlantic
Count
%
446
553
846
669
1160
1261
1396
449
417
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is little difference between tiers in funds availability for local personal checks not drawn on
the bank.
239
Payments Products
There is little difference between urban and rural banks in funds availability for local personal checks
not drawn on the bank.
QVIIIA. Figure 14.
Valid
How soon are funds available for a government check?
Current day
Frequency
305
Weighted
Frequency
3640
Weighted
Percent
50.4
48.0
Next day
351
3465
Second day
4
44
.6
Three or more days
7
75
1.0
667
7224
100.0
18
215
685
7440
Total
Missing
System
Total
A greater percentage of West North Central (65.1 percent same day) and New England (57.2
percent same day) banks provide faster funds availability for government checks than Mid-Atlantic
banks (27.2 percent same day).
QVIIIA. Figure 15. Region
New
England
Current
day
Count
%
Next
day
Count
%
Second
day
MidAtlantic
151
320
315
605
719
909
169
199
57.2%
27.2%
39.1%
47.1%
52.0%
56.4%
65.1%
36.5%
44.7%
189
403
471
354
555
511
487
267
228
42.8%
72.8%
57.5%
52.9%
47.7%
40.1%
34.9%
57.6%
51.4%
Count
27
3
14
3.3%
.3%
3.0%
3
41
14
17
.3%
3.2%
3.0%
3.9%
Count
%
Total
Pacific
253
%
Three
or
more
days
How soon are funds available for a government check?
East
West
East
West
South
South
South
North
North
Atlantic Central Central
Central
Central
Mountain
Count
%
442
553
819
669
1163
1274
1396
463
444
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
240
Payments Products
There are differences among tiers in funds availability for government checks. Government check
funds are made available sooner by Tier 3 banks (52.2 percent same day) than by both Tier 1 (16.7
percent same day) and Tier 2 banks (30.1 percent same day).
QVIIIA. Figure 16. Tier
How soon are funds available for a government check?
New Tier
Current day
Tier 1
Count
%
Next day
Count
%
Second day
Tier 2
163
3473
16.7%
30.1%
52.2%
21
368
3076
83.3%
67.9%
46.2%
Count
%
Three or more
days
Count
%
Total
Count
%
Tier 3
4
3
41
.6%
.6%
7
68
1.3%
1.0%
25
541
6658
100.0%
100.0%
100.0%
There is no difference between urban and rural banks in funds availability for government checks.
Over half (58.9 percent) of banks make funds available for double endorsed checks by the next day,
with 23.7 percent providing current day availability and 35.2 percent providing next day availability.
QVIIIA. Figure 17. How soon are funds available for a double endorsed check?
Valid
Current day
Next day
Second day
Missing
Total
Frequency
127
Weighted
Frequency
1560
Weighted
Percent
23.7
219
2317
35.2
54
552
8.4
Three or more days
193
2145
32.6
Total
593
6574
100.0
92
866
685
7440
System
241
Payments Products
There are differences among regions in funds availability for double endorsed checks. West North
Central banks (39.4 percent same day) offer faster availability than Mid-Atlantic banks (6.6 percent
same day).
QVIIIA. Figure 18. Region
How soon are funds available for a double endorsed check?
New
England
Current
day
Count
%
Next day Count
%
Second Count
day
%
Three or Count
more
days
%
Total
Count
%
MidAtlantic
South
Atlantic
East
South
Central
West
South
Central
East North
Central
West
North
Central
Mountain
Pacific
68
31
120
174
232
261
523
82
69
17.6%
6.6%
16.6%
28.8%
21.7%
22.9%
39.4%
17.7%
17.4%
69
166
296
174
455
320
425
232
178
17.9%
35.6%
41.1%
28.8%
42.5%
28.1%
32.0%
50.2%
45.1%
113
59
38
21
65
96
99
27
34
29.1%
12.7%
5.2%
3.4%
6.1%
8.4%
7.5%
5.9%
8.7%
137
210
267
237
318
461
280
121
114
35.3%
45.1%
37.0%
39.1%
29.7%
40.5%
21.1%
26.1%
28.9%
388
465
721
606
1071
1138
1328
463
395
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
There is little difference between tiers in funds availability for double endorsed checks.
There is little difference between urban and rural banks in funds availability for double endorsed
checks.
242
Payments Products
Advance Loans
Few (5.5 percent) banks provide an advance on funds that are due to arrive. Advances are more
often available on direct deposits than on checks.
Question VIII B. Can a customer get an “advance loan” on the funds from a
deposited check or a regularly scheduled direct deposit (excluding all
programs to cover overdrafts and NSF transactions)?
Yes, accelerated availability of deposited check
Yes, advance for a scheduled direct deposit
No
QVIIIB. Figure 1.
Valid
Can a customer get an advance loan on the funds from a deposited check or direct
deposit?
Frequency
626
Weighted
Frequency
6786
Weighted
Percent
94.5
Yes, accelerated
availability of check
18
172
2.4
Yes, advanced
direct deposit
20
225
3.1
664
7183
100.0
21
257
685
7440
No
Total
Missing
System
Total
There is little difference between regions in the offering of advance loans on funds due to arrive.
A greater percentage of Tier 1 banks (16.7 percent) offer advance loans on funds due to arrive than
Tier 2 (4.4 percent) and Tier 3 (5.6 percent) banks.
QVIIIB. Figure 2.
Tier
Can a customer get an advance loan on the
funds from a deposited check or direct deposit?
New Tier
No
Tier 1
Count
%
Yes, accelerated
availability of check
Count
%
Yes, advanced
direct deposit
Count
%
Total
Count
%
21
Tier 2
517
Tier 3
6248
83.3%
95.5%
94.4%
1
21
150
4.2%
3.8%
2.3%
3
3
219
12.5%
.6%
3.3%
25
541
6617
100.0%
100.0%
100.0%
There is no difference between urban and rural banks in the proportion of banks offering advance
loans on funds due to arrive.
243
Payments Products
Question VIII B-1. Up to what dollar or percentage amount will the bank
typically advance? $___ or ___%
Question VIII B-2. What fee is charged for the advance? $___ flat advance
fee or %___ of the amount advanced.
Customers can get an advance of up to $5,000.00 or 100 percent of funds that are due to arrive and
are charged $0.00 to $40.00 or 0.0 percent to 18.0 percent in fees.
QVIIIB-2. Figure 1. Statistics
Weighted
N
Valid
Missing
Advance $
91
Advance %
219
Fee $
247
Fee %
75
307
179
150
323
Mean
$547.24
89.83
$13.87
9.36
Median
$500.00
100.00
$10.00
10.00
Mode
$500.00
100.00
$.00
.00
Minimum
$.00
50.00
$.00
.00
Maximum
$5,000.00
100.00
$40.00
18.00
There is little difference between tiers in advance loan amounts and fees.
There are differences among regions for advance loan amounts, but there are too few responses to
develop any conclusions.
There is little difference between urban and rural banks for advance loan amounts and fees.
244
Payments Products
Question VIII B-3. What types of checks/deposits qualify for advances?
All checks
Business checks, but not personal checks
Government checks
Payroll checks only
Regularly scheduled direct
deposits
Other: ___
Based on the survey responses, fewer than half (40.7 percent) of the banks that offer advance loans
on funds from a deposited check or a regularly scheduled deposit will provide an advance for all
types of checks. Nearly one-third (30.8 percent) of such banks will provide an advance for a
government check. About 8 percent (7.7 percent) will make an advance loan for payroll checks.
However, nearly half (49.2 percent) will offer an advance loan on a regularly scheduled direct
deposit.
QVIIIB-3. Figure 1. All Checks
Valid
No
QVIIIB-3. Figure 4. Payroll Checks Only
Weighted Weighted
Frequency Frequency Percent
22
220
59.3
14
151
40.7
Yes
3
28
7.7
Total
36
370
100.0
Total
36
370
100.0
2
27
38
398
Total
Missing System
Total
QVIIIB-3. Figure 2. Business Checks, but Not
Personal Checks
No
Yes
Total
Missing System
Total
Weighted Weighted
Frequency Frequency Percent
35
369
99.7
1
36
1
370
2
27
38
398
No
27
398
Valid
.3
100.0
No
Regularly
Weighted
Weighted
Percent
Frequency Frequency
21
188
50.8
Yes
15
182
49.2
Total
36
370
100.0
2
27
38
398
Missing System
Total
QVIIIB-3. Figure 6.
Weighted Weighted
Frequency Frequency Percent
26
256
69.2
Valid
No
Other
Weighted
Weighted
Percent
Frequency Frequency
34
356
96.0
Yes
10
114
30.8
Yes
2
15
4.0
Total
36
370
100.0
Total
36
370
100.0
2
27
2
27
38
398
Missing System
Total
2
38
QVIIIB-3. Figure 5.
Scheduled Direct Deposits
QVIIIB-3. Figure 3. Government Checks
Valid
No
Yes
Missing System
Valid
Valid
Weighted
Weighted
Frequency Frequency
Percent
33
342
92.3
38
Missing System
Total
398
245
Payments Products
Banks that indicate “other” state the following:
ACH deposits qualify for advances ($500 or 50 percent of monthly ACH payments can be
accessed, whichever is less).
Deposit accounts must be in good standing to qualify for an advance loan.
“We are a ‘Pay All Bank’ that will also permit ATM and debit card ODs for satisfactory
accounts opened over 60 days.”
There are minimal differences among regions or tiers for types of checks that qualify for advance
loans.
There is little difference between urban and rural banks in the types of checks that qualify for
advance loans.
246
Payments Products
Chapter
11
Credit Products
This chapter examines the following topics:
Closed-End Unsecured Loans
Small Dollar Loans
Tax Refund Anticipation Loans
Consumer Credit Cards
These questions address aspects of the Congressional Question 4: transaction costs and policies for credit accounts for
the un/underbanked.
Summary
The most commonly offered credit product is an unsecured closed-end personal loan of up
to $5,000. Other credit products are offered by fewer than half of the banks. The majority (an
estimated 69 percent) of banks offer closed-end personal loans, 36 percent offer consumer credit
cards, and 11 percent offer tax refund anticipation loans. When assessing eligibility for a closed-end
personal loan, 94 percent of banks require a review of an individual’s credit history, 76 percent of
banks look at proof of income, and 50 percent have a minimum credit score requirement. The
median minimum loan size for an unsecured closed-end loan is $1,000, and the median maximum
term is 36 months. Eighty percent of banks are able to originate these loans in less than 24 hours.
To qualify for a credit card, an estimated 78 percent of banks require a social security
number, 77 percent require a review of an individual’s credit history, 52 percent set a
minimum credit score requirement, and 48 percent require a proof of income. Of the banks
that offer credit cards, 42 percent indicate that having a deposit relationship with the bank improves
an individual’s ability to obtain a credit card, typically through a review of a the individual’s account
history to asses their ability to repay. Of the banks that offer credit cards, one-fourth offer secured
cards, and of these, 96 percent allow customers to graduate from the secured card to a traditional
card once customers establish an acceptable credit history after 12 to 24 months.
247
Credit Products
Closed-End Unsecured Loans
Question IX A. Does the bank typically offer unsecured closed-end personal
loans up to $5,000?
Yes
No
Over two-thirds (69.3 percent) of banks offer closed-end unsecured personal loans for amounts up
to $5,000.00. Fewer than half of the banks offer small dollar loans of less than $1,000.00 with at least
a 90-day repayment term and low fees (43.5 percent) or credit cards (35.7 percent). One in ten banks
offer tax refund anticipation loans (10.6 percent).
QIXA. Figure 1. Percent of Banks Offering Credit Cards and Loans
Percent of
Banks Offering
Type of Loan
Closed-end Unsecured Loans
69.3%
Small Dollar Loans
43.5%
Consumer Credit Cards
35.7%
Secured Credit Cards (if offer credit cards)
25.3%
Tax Refund Anticipation Loans
10.6%
QIXA. Figure 2. Does the bank offer unsecured loans up to $5000?
Valid
Missing
Total
Frequency
196
Weighted
Frequency
2256
Yes
478
5094
69.3
Total
674
7351
100.0
No
System
11
89
685
7440
Weighted
Percent
30.7
There are differences among regions for banks that offer unsecured consumer loans of up to $5,000.
The Pacific and Mountain regions (53.2 percent and 56.9 percent, respectively) have lower shares of
banks that make these unsecured loans than banks in other regions, specifically East South Central
and New England (83.1 percent and 87.7 percent, respectively).
248
Credit Products
QIXA. Figure 3. Region
No
Count
%
Yes
Count
%
Total
Count
%
Does the bank offer unsecured loans up to $5000?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
265
113
308
376
503
New
England
55
MidAtlantic
206
12.3%
35.5%
30.9%
16.9%
27.1%
28.8%
391
374
591
556
828
929
87.7%
64.5%
69.1%
83.1%
72.9%
446
581
856
669
1136
100.0%
100.0%
100.0%
100.0%
100.0%
Mountain
215
Pacific
216
36.0%
43.1%
46.8%
894
285
246
71.2%
64.0%
56.9%
53.2%
1305
1396
500
461
100.0%
100.0%
100.0%
100.0%
A higher percentage of Tier 1 banks (91.7 percent) offer unsecured loans of up to $5,000 than Tier 3
(68.8 percent) banks. A greater percentage of Tier 2 banks (74.5 percent) offer unsecured loans than
Tier 3 banks.
QIXA. Figure 4. Tier
New Tier
No
Does the bank offer unsecured loans up to $5000
Tier 1
Tier 2
Count
%
Yes
Count
%
Total
Count
%
Tier 3
2
135
2119
8.3%
25.5%
31.2%
23
395
4676
91.7%
74.5%
68.8%
25
531
6795
100.0%
100.0%
100.0%
There is a difference between urban and rural banks that offer unsecured loans of up to $5,000.00. A
smaller percentage of urban banks (64.2 percent) offer these loans than rural banks (73.8 percent).
QIXA. Figure 5. Urban/Rural
Does the bank offer unsecured loans up to $5000?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
1032
1224
26.2%
35.8%
2903
2191
73.8%
64.2%
3935
3415
100.0%
100.0%
249
Credit Products
Question IX A-1. If yes, what are the eligibility requirements?
Deposit relationship with the bank
Direct deposit
Proof of income
Minimum credit score
Review credit history
Other
Nearly all (93.6 percent) banks require a review of an individual’s credit history when determining
eligibility for an unsecured loan. Proof of income is required by 75.7 percent of banks. An
unspecified minimum credit score requirement is set by 50.0 percent of banks, 40.5 percent require a
deposit relationship, but only 3.4 percent require direct deposit.
QIXA-1. Figure 1. Eligibility Requirements for Obtaining an Unsecured Closed-End Personal Loan
Percentage of
Banks Requiring
Eligibility Requirements
Review Credit History
93.6%
Proof of Income
75.7%
Minimum Credit Score
50.0%
Deposit Relationship
40.5%
Other
16.3%
Direct Deposit
3.4%
QIXA-1. Figure 2.
Valid
No
Review of Credit History
QIXA-1. Figure 4. Minimum Credit Score
Weighted Weighted
Frequency Frequency Percent
28
322
6.4
Valid
Yes
447
4731
93.6
Yes
255
2524
50.0
Total
475
5053
100.0
Total
475
5053
100.0
3
41
478
5094
Missing System
Total
Missing System
Total
QIXA-1. Figure 3. Proof of Income
Valid
No
QIXA-1. Figure 5
Weighted Weighted
Frequency Frequency Percent
123
1226
24.3
Valid
No
3
41
478
5094
Deposit Relationship
Weighted Weighted
Frequency Frequency Percent
305
3007
59.5
Yes
352
3827
75.7
Yes
170
2046
40.5
Total
475
5053
100.0
Total
475
5053
100.0
3
41
478
5094
Missing System
Total
No
Weighted Weighted
Frequency Frequency Percent
220
2529
50.0
Missing System
Total
250
3
41
478
5094
Credit Products
QIXA-1. Figure 6. Direct Deposit
Valid
QIXA-1. Figure 7. Other
Weighted Weighted
Frequency Frequency Percent
460
4868
96.6
No
Yes
14
171
3.4
Total
474
5039
100.0
4
55
Missing System
Total
478
Valid
Weighted Weighted
Frequency Frequency Percent
385
4205
83.7
No
Yes
88
821
16.3
Total
473
5026
100.0
5
68
478
5094
Missing System
Total
5094
For closed-end personal loans of up to $5,000.00, other eligibility requirements reported by
respondents include: sufficient debt-to-income ratio (22), source of income and ability to repay (19),
and a previous relationship with the bank (10).
There are differences among regions for banks that require a deposit relationship and proof of
income to obtain an unsecured personal loan. Smaller percentages of New England (21.0 percent),
Mid-Atlantic (21.0 percent), and Pacific (26.6 percent) banks require a deposit relationship than
banks in the West North Central (54.4 percent) and West South Central (54.6 percent) regions.
QIXA-1. Figure 8. Region
No
Count
%
Yes
Count
%
Total
Count
%
New
England
309
MidAtlantic
296
South
Atlantic
393
79.0%
79.0%
66.5%
Deposit Relationship
East
West
East
South
South
North
Central
Central
Central
344
370
583
63.4%
45.4%
62.8%
West
North
Central
407
Mountain
134
Pacific
170
45.6%
47.2%
73.4%
82
79
198
198
445
345
486
150
62
21.0%
21.0%
33.5%
36.6%
54.6%
37.2%
54.4%
52.8%
26.6%
391
374
591
543
815
929
894
285
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
A smaller percentage of East South Central (62.6 percent) and West South Central (66.0 percent)
banks require proof of income than Mid-Atlantic (89.6 percent), New England (98.8 percent), and
Mountain (98.8 percent) banks.
QIXA-1. Figure 9. Region
No
Count
%
Yes
Count
%
Total
Count
%
Proof of Income
East
West
East
South
South
North
Central
Central
Central
203
277
280
New
England
5
MidAtlantic
39
South
Atlantic
79
1.2%
10.4%
13.3%
37.4%
34.0%
386
336
513
340
537
98.8%
89.6%
86.7%
62.6%
66.0%
West
North
Central
280
Mountain
3
Pacific
59
30.2%
31.4%
1.2%
25.6%
648
613
281
172
69.8%
68.6%
98.8%
74.4%
391
374
591
543
815
929
894
285
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
251
Credit Products
There are differences between tiers for banks that require a deposit relationship, set a minimum
credit score, and have other requirements to obtain an unsecured personal loan. Banks in Tier 1 (4.5
percent) are less likely to require a deposit relationship than banks in Tier 2 (22.8 percent) and Tier 3
(42.2 percent).
QIXA-1. Figure 10. Tier
Deposit Relationship
Tier 1
No
Count
%
Yes
2680
95.5%
77.2%
57.8%
1
90
1955
4.5%
22.8%
42.2%
23
395
4635
100.0%
100.0%
100.0%
Count
Count
%
Tier 3
305
%
Total
Tier 2
22
Tier 1 (81.8 percent) banks have minimum credit score requirements more often than Tier 2 (63.2
percent) and Tier 3 (48.7 percent) banks.
QIXA-1. Figure 11. Tier
Minimum Credit Score
Tier 1
No
%
Yes
Count
%
Total
4
Tier 2
146
Tier 3
2379
18.2%
36.8%
51.3%
19
250
2256
81.8%
63.2%
48.7%
23
395
4635
100.0%
100.0%
100.0%
Count
Count
%
QIXA-1. Figure 12.
Tier
Other
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
17
Tier 2
291
Tier 3
3897
72.7%
73.7%
84.6%
6
104
711
27.3%
26.3%
15.4%
23
395
4607
100.0%
100.0%
100.0%
252
Credit Products
There are differences between urban and rural banks for having a deposit relationship requirement
and proof of income requirement. A larger percentage of rural banks (43.1 percent) require a deposit
relationship than urban banks (37.0 percent). However, a smaller share of rural banks (68.9 percent)
requires proof of income, than urban banks (85.0 percent).
QIXA-1. Figure 13. Urban/Rural
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Deposit
Relationship
1652
Direct Deposit
2794
Deposit
Relationship
1355
Direct Deposit
2075
Proof of
Income
323
56.9%
96.2%
31.1%
63.0%
97.1%
15.0%
1251
109
2000
795
62
1827
43.1%
3.8%
68.9%
37.0%
2.9%
85.0%
2903
2903
2903
2150
2136
2150
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
QIXA-1. Figure 14.
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
Proof of
Income
903
Urban/Rural
Minimum
Credit Score
1508
Rural HQ
Review of
Credit History
232
51.9%
8.0%
Other
2356
Minimum
Credit Score
1021
Urban HQ
Review of
Credit History
89
Other
1849
81.9%
47.5%
4.1%
86.0%
1395
2671
520
1129
2061
301
48.1%
92.0%
18.1%
52.5%
95.9%
14.0%
2903
2903
2876
2150
2150
2150
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
253
Credit Products
Question IX A-2. If yes, please indicate the following:
Minimum
Loan Size
Maximum
Loan Size
Acct.
Origination Maintenance
Fee
Fee
Minimum
APR
Maximum
APR
Typical
APR
Maximum
Term
(Mos)
The average maximum size of close-end personal loans is $13,876. The median loan maximum size
is $5,000, and the median loan minimum size is $1,000. Although the question asked for loans up to
$5,000, some banks reported loans greater than $5,000. Most banks do not charge an account
maintenance fee. The median maximum term is 36 months. With regard to annual percentage rate
(APR), banks report their rates either as percentages or as “prime plus” a percentage.
QIXA-2. Figure 1. Statistics: Weighted
Weighted
N
Valid
Missing
Minimum
Loan Size
4003
Maximum
Loan Size
3094
Account
Maintenance Fee
2788
Maximum Term
(in months)
4272
1091
2000
2306
822
Mean
$1,043.75
$13,876.07
$1.83
34.90
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
36
Minimum
$.00
$.00
$.00
0
Maximum
$10,000.00
$2,500,000.00
$100.00
120
There is a difference between tiers for minimum sizes and maximum term unsecured personal loans.
The maximum term is longer for larger banks in Tier 1 (median of 60 months) than for banks in
Tier 3 (median of 36 months). Larger banks also require a larger minimum loan size (median of
$2,000) than Tier 3 banks (median of $1,000).
QIXA-2. Figure 2. Tier 1
Minimum
Loan Size
23
21
Account
Maintenance Fee
16
0
2
7
1
Mean
$1,943.18
$41,125.00
$.00
54.38
Median
$2,000.00
$25,000.00
$.00
60.00
Mode
N
Valid
Missing
Maximum
Loan Size
Maximum Term
(in months)
22
$2,000.00
$25,000.00
$.00
60
Minimum
$250.00
$.00
$.00
26
Maximum
$5,000.00
$200,000.00
$.00
84
254
Credit Products
QIXA-2. Figure 3.
Tier 2
Minimum
Loan Size
N
Valid
Missing
343
Maximum
Loan Size
243
Account
Maintenance Fee
257
Maximum Term
(in months)
354
52
153
139
42
Mean
$1,555.56
$58,478.57
$1.63
40.75
Median
$1,500.00
$10,000.00
$.00
36.00
Mode
36
$1,000.00
$5,000.00
$.00
Minimum
$.00
$.00
$.00
0
Maximum
$5,000.00
$2,500,000.00
$75.00
120
Minimum
Loan Size
3637
Maximum
Loan Size
2830
Account
Maintenance Fee
2516
Maximum Term
(in months)
3897
QIXA-2. Figure 4. Tier 3
N
Valid
Missing
1039
1846
2160
779
$989.76
$9,849.51
$1.86
34.26
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
36
Mean
Minimum
$.00
$.00
$.00
0
Maximum
$10,000.00
$250,000.00
$100.00
120
There are differences among regions for minimum loan sizes and maximum term limits of
unsecured personal loans. The Mid-Atlantic region has a maximum term of 60 months, which is
longer than the term for other regions. Minimum loan sizes in the West North Central, East South
Central, Mountain, and Pacific regions have a median of $500 which is less than the other regions
($1,000 median).
QIXA-2. Figure 5. New England
Minimum
Loan Size
N
Valid
Missing
364
Maximum
Loan Size
374
Account
Maintenance Fee
244
Maximum Term
(in months)
364
27
17
147
27
Mean
$1,012.68
$6,426.86
$.00
37.37
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
36
Minimum
$.00
$.00
$.00
0
Maximum
$2,500.00
$25,000.00
$.00
60
255
Credit Products
QIXA-2. Figure 6. Mid-Atlantic
Minimum
Loan Size
N
Valid
Missing
326
Maximum
Loan Size
319
Account
Maintenance Fee
265
Maximum Term
(in months)
370
48
55
110
5
Mean
$1,518.31
$21,374.65
$.00
49.33
Median
$1,000.00
$5,000.00
$.00
60.00
Mode
$1,000.00
$5,000.00
$.00
60
Minimum
$.00
$.00
$.00
24
Maximum
$5,000.00
$250,000.00
$.00
72
Maximum
Loan Size
303
Account
Maintenance Fee
321
Maximum Term
(in months)
523
QIXA-2. Figure 7. South Atlantic
Minimum
Loan Size
N
Valid
516
Missing
75
288
270
68
Mean
$1,520.31
$11,942.42
$4.34
35.08
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
36
Minimum
$.00
$.00
$.00
12
Maximum
$10,000.00
$50,000.00
$75.00
60
Account
Maintenance Fee
300
Maximum Term
(in months)
433
QIXA-2. Figure 8. East South Central
Minimum
Loan Size
N
Valid
420
Maximum
Loan Size
283
Missing
137
274
257
123
Mean
$1,105.05
$13,203.09
$4.56
33.55
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$500.00
$5,000.00
$.00
36
Minimum
$.00
$.00
$.00
3
Maximum
$3,500.00
$100,000.00
$75.00
72
a Multiple modes exist. The smallest value is shown
256
Credit Products
QIXA-2. Figure 9. West South Central
N
Valid
Minimum
Loan Size
633
Maximum
Loan Size
441
Account
Maintenance Fee
612
Maximum Term
(in months)
712
Missing
195
387
216
117
Mean
$889.23
$7,966.15
$2.68
29.98
Median
$500.00
$5,000.00
$.00
24.00
Mode
$1,000.00
$5,000.00
$.00
36
Minimum
$.00
$.00
$.00
3
Maximum
$5,000.00
$50,000.00
$100.00
60
Maximum
Loan Size
606
Account
Maintenance Fee
448
Maximum Term
(in months)
751
QIXA-2. Figure 10. East North Central
Minimum
Loan Size
N
Valid
659
Missing
270
323
481
178
$956.88
$24,497.29
$.35
40.33
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
60
Mean
Minimum
$.00
$.00
$.00
0
Maximum
$5,000.00
$2,500,000.00
$32.00
120
Maximum
Loan Size
452
Account
Maintenance Fee
388
Maximum Term
(in months)
702
QIXA-2. Figure 11. West North Central
Minimum
Loan Size
N
Valid
658
Missing
236
441
506
191
Mean
$678.49
$6,109.14
$.35
26.75
Median
$500.00
$5,000.00
$.00
24.00
Mode
$1,000.00
$5,000.00
$.00
12
Minimum
$.00
$.00
$.00
12
Maximum
$3,500.00
$100,000.00
$10.00
60
Maximum
Loan Size
158
Account
Maintenance Fee
92
Maximum Term
(in months)
244
QIXA-2. Figure 12.
Mountain
Minimum
Loan Size
N
Valid
Missing
244
41
127
192
41
$1,003.88
$21,142.55
$.00
27.36
Median
$500.00
$5,000.00
$.00
24.00
Mode
$500.00
$5,000.00
$.00
36
Mean
Minimum
$.00
$.00
$.00
0
Maximum
$3,000.00
$100,000.00
$.00
60
257
Credit Products
QIXA-2. Figure 13. Pacific
Minimum
Loan Size
N
Valid
Missing
184
Maximum
Loan Size
156
Account
Maintenance Fee
118
Maximum Term
(in months)
174
62
89
128
72
Mean
$987.94
$11,950.76
$3.48
42.04
Median
$500.00
$10,000.00
$.00
36.00
Mode
$500.00
$.00
$.00
36
Minimum
$.00
$.00
$.00
15
Maximum
$3,000.00
$100,000.00
$30.00
60
There are differences between rural and urban banks for minimum loan size and maximum term of
unsecured closed-end personal loans. The median minimum loan size for rural banks is $500,
compared with $1,000 for urban banks. The median maximum term for urban and rural banks is 36
months and 24 months, respectively.
QIXA-2. Figure 14.
Urban
Minimum
Loan Size
1821
Maximum
Loan Size
1377
Account
Maintenance Fee
1355
Maximum Term
(in months)
1889
370
814
836
302
Mean
$1,274.45
$19,756.36
$.91
39.66
Median
$1,000.00
$5,000.00
$.00
36.00
Mode
$1,000.00
$5,000.00
$.00
36
$.00
$.00
$.00
0
N
Valid
Missing
Minimum
Maximum
Sum
$10,000.00
$2,500,000.00
$75.00
120
$2,321,307.90
$27,207,833.33
$1,238.21
74900
Minimum
Loan Size
2182
Maximum
Loan Size
1717
Account
Maintenance Fee
1433
Maximum Term
(in months)
2383
QIXA-2. Figure 15. Rural
N
Valid
Missing
721
1186
1470
520
Mean
$851.13
$9,158.34
$2.70
31.13
Median
$500.00
$5,000.00
$.00
24.00
Mode
36
$500.00
$5,000.00
$.00
Minimum
$.00
$.00
$.00
0
Maximum
$5,000.00
$100,000.00
$100.00
72
$1,856,819.07
$15,720,613.20
$3,869.18
74196
Sum
258
Credit Products
Question IX A-3. How long does it typically take to originate an unsecured
closed-end personal loan?
Less than 30 minutes
Less than 24 hours
Less than 48 hours
More than 48 hours
Nearly all (97.2 percent) banks report that they can originate an unsecured personal loan in less than
48 hours, and 80.3 percent of banks are able to originate an unsecured loan in less than 24 hours.
QIXA-3. Figure 1. How long does it take to originate an unsecured loan?
Valid
Frequency
102
Weighted
Frequency
1219
Weighted
Percent
24.4
Less than 24 hours
260
2793
55.9
Less than 48 hours
90
849
17.0
Less than 30 minutes
More than 48 hours
Total
Missing
System
Total
19
138
2.8
471
4998
100.0
7
96
478
5094
There are differences among regions for the time needed to originate an unsecured loan. A larger
share of banks in the West North Central (36 percent) and West South Central (36.5 percent)
regions are able to originate an unsecured loan in less than 30 minutes compared with New England
(0 percent in less than 30 minutes) and Pacific (1.5 percent in less than 30 minutes) region banks.
QIXA-3. Figure 2. Region
New
England
Less
Count
than 30
minutes
%
Less
Count
than 24
hours
%
Less
Count
than 48
hours
%
More
Count
than 48
hours
%
Total
Count
%
MidAtlantic
How long does it take to originate an unsecured loan?
East
West
East
West
South
South
South
North
North
Atlantic
Central
Central
Central
Central
Mountain
Pacific
55
145
154
298
212
312
41
3
14.6%
25.0%
28.4%
36.5%
23.1%
36.0%
14.4%
1.5%
250
105
276
343
449
563
510
185
113
63.8%
28.1%
47.7%
63.3%
55.1%
61.6%
58.8%
64.8%
48.8%
138
156
157
46
51
137
44
55
64
35.3%
41.8%
27.2%
8.4%
6.3%
15.0%
5.1%
19.2%
27.6%
3
58
17
3
5
51
.9%
15.5%
2.1%
.3%
1.6%
22.2%
391
374
578
543
815
915
866
285
232
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
259
Credit Products
There is a difference between tiers for the time it takes to originate an unsecured loan; it takes less
time for banks in Tier 3 to originate a loan than banks in Tiers 1 and 2.
QIXA-3. Figure 3. Tier
How long does it take to originate an unsecured loan?
Tier 1
Less than 30
minutes
Count
%
Less than 24
hours
Less than 48
hours
1176
22.7%
9.6%
25.7%
7
229
2557
31.8%
57.9%
55.8%
6
104
738
27.3%
26.3%
16.1%
4
24
109
18.2%
6.1%
2.4%
23
395
4580
100.0%
100.0%
100.0%
Count
%
Total
38
Count
%
More than 48
hours
Count
%
Tier 3
5
Count
%
Tier 2
There is a difference between urban and rural banks for the amount of time needed to originate an
unsecured closed-end personal loan. A larger percentage of urban banks take more time than rural
banks.
QIXA-3. Figure 4. Urban/Rural
How long does it take to originate
an unsecured loan?
Rural HQ
Less than 30
minutes
Count
%
Less than 24
hours
Count
%
Less than 48
hours
Count
%
More than 48
hours
Count
%
Total
Count
%
Urban HQ
964
255
34.0%
11.8%
1614
1179
56.9%
54.5%
243
606
8.6%
28.0%
14
124
.5%
5.7%
2835
2164
100.0%
100.0%
260
Credit Products
Smaller Dollar Loans
Question IX B. Does the bank offer affordable small dollar loans (i.e., less
than $1,000/at least a 90-day repayment term/less than 36 percent
APR/no or low fees)?
Yes
No
Fewer than half (43.5 percent) of banks offer small-size unsecured personal loans. These banks
identify loans including overdraft lines of credit in their descriptions of small dollar loan products,
which was not the original intention of the question. Consequently, the percentages of banks that
offer affordable small dollar loans that meet the FDIC program guidelines will be lower than the
estimated percentages of the survey results.7
QIXB. Figure 1. Does the bank offer small dollar loans?
Valid
Frequency
396
Weighted
Frequency
4011
Yes
260
3094
43.5
Total
656
7105
100.0
No
Missing
System
Total
29
335
685
7440
Weighted
Percent
56.5
There is a difference among regions for banks that offer small dollar loans. A greater percentage of
West South Central (56.8 percent) and West North Central (56.3 percent) banks offer small dollar
loans than other regions, specifically New England (21.5 percent) and Mid-Atlantic (21.8 percent)
banks.
QIXB. Figure 2. Region
No
Count
%
Yes
Count
%
Total
Count
%
Does the bank offer small dollar loans?
East
West
East
West
South
South
North
North
South
Atlantic
Central
Central
Central
Central
517
354
473
674
585
New
England
350
MidAtlantic
444
78.5%
78.2%
63.5%
54.1%
43.2%
53.2%
96
123
298
301
622
594
21.5%
21.8%
36.5%
45.9%
56.8%
446
567
815
655
1095
100.0%
100.0%
100.0%
100.0%
100.0%
Mountain
304
Pacific
310
43.7%
62.1%
71.9%
753
186
121
46.8%
56.3%
37.9%
28.1%
1268
1338
490
431
100.0%
100.0%
100.0%
100.0%
Key features of the FDIC Small Dollar Loan Pilot Program may include: loan amounts up to $1,000, amortization periods longer than a single pay
cycle and up to 36 months for closed-end credit or minimum payments that reduce principle (that do not result in negative amortization) for open-end
credit, no prepayment penalties, origination and/or maintenance fees limited to the amount necessary to cover actual costs, and an automatic savings
component. (See: http://www.fdic.gov/smalldollarloans/index.html.)
7
261
Credit Products
There is a difference between tiers for banks that offer small dollar loans. Banks in Tier 3 (45.1
percent) are more likely to offer small dollar loans than banks in Tiers 1 (20.8 percent) and 2 (25.5
percent).
QIXB. Figure 3. Tier
Does the bank offer small dollar loans?
Tier 1
No
%
Yes
395
79.2%
74.5%
54.9%
Count
%
Total
20
Tier 3
3596
Count
5
135
2953
20.8%
25.5%
45.1%
25
531
6549
100.0%
100.0%
100.0%
Count
%
Tier 2
There is a difference between urban and rural banks for banks that offer small dollar loans. More
than half of rural banks (58.6 percent) offer small dollar loans, compared with 26.2 percent of urban
banks.
QIXB. Figure 4. Urban/Rural
Does the bank offer small dollar loans?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
Urban HQ
1573
2438
41.4%
73.8%
2229
865
58.6%
26.2%
3802
3302
100.0%
100.0%
Question IX B-1. Please describe any innovative products the bank has
developed to provide small dollar loans to customers (for example, applying
for a six-month loan at an ATM).
Of the surveyed banks, 260 reported that they offer small dollar loans. Of these banks, 80 described
their products. Only some of the products described were new and innovative. Also, the
descriptions often included overdraft programs with a line of credit. Among the programs and
products that banks described:
Three banks identified an innovative new product that included the ability to apply for a
personal loan online.
Forty-four banks reported offering loans of under $1,000. The five most commonly mentioned
situations in which banks offer these small dollar loans include: Holiday/Christmas loans, loans
for college students, early tax refund loans, credit development loans, and loans to military
personnel.
Thirty banks reported offering some form of credit line as a smaller dollar loan, including 19
banks that reported overdraft lines of credit.
262
Credit Products
Two banks described credit development loans. For example, a savings or CD secured loan
could help customers establish or re-establish credit history. The customer borrows money and
the proceeds are deposited to a savings or CD account.
263
Credit Products
Tax Refund Anticipation Loans
Question IX C. Does the bank offer tax refund anticipation loans?
Yes
No
Only an estimated 10.6 percent of banks offer tax refund anticipation loans.
QIXC. Figure 1. Does the bank offer tax refund anticipation loans?
Valid
Frequency
610
Weighted
Frequency
6521
Weighted
Percent
89.4
Yes
59
774
10.6
Total
669
7295
100.0
16
145
685
7440
No
Missing
System
Total
A greater percentage of banks in the West North Central region (22.8 percent) offer tax refund
anticipation loans than banks in any other region, specifically New England, Mid-Atlantic, and
Pacific (all 0.0 percent).
QIXC. Figure 2. Region
No
Yes
Count
New
England
446
MidAtlantic
581
%
100.0%
100.0%
Count
%
Total
Count
%
Does the bank offer tax refund anticipation loans?
East
West
East
West
South
South
South
North
North
Atlantic Central Central
Central
Central
760
652
1078
1033
1065
91.8%
97.4%
92.9%
79.8%
77.2%
Mountain
459
Pacific
448
93.7%
100.0%
68
17
82
261
314
31
8.2%
2.6%
7.1%
20.2%
22.8%
6.3%
446
581
829
669
1160
1294
1379
490
448
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
A greater percentage of Tier 3 banks (11.4 percent) offer tax refund loans than banks in Tier 2 (1.3
percent).
QIXC. Figure 3. Tier
Does the bank offer tax refund anticipation loans?
New Tier
No
1
Count
%
Yes
Count
%
Total
Count
%
2
3
23
524
5975
95.7%
98.7%
88.6%
1
7
766
4.3%
1.3%
11.4%
24
531
6740
100.0%
100.0%
100.0%
There is a difference between rural and urban banks for banks that offer tax refund anticipation
loans. A larger percentage (18.7 percent) of rural banks offer these loans, compared with 1.3 percent
of urban banks.
264
Credit Products
QIXC. Figure 4. Urban/Rural
Does the bank offer tax refund
anticipation loans?
No
Count
Rural HQ
3170
Urban HQ
3352
81.3%
98.7%
%
Yes
Count
728
46
18.7%
1.3%
3898
3397
100.0%
100.0%
%
Total
Count
%
Question IX C-1. If yes, please indicate the following:
Minimum
Loan Size
Maximum
Loan Size
Origination
Fee
Acct.
Maintenance
Fee
Minimum
APR
Maximum
APR
Typical
APR
Maximum
Term
(Mos)
Based on the survey results, the fees for tax refund loans vary from $0 to $129 and can be
outstanding from one to 60 months.
QIXC-1. Figure 1. Statistics
Weighted
N
Valid
Missing
Minimum
Size
456
Maximum
Size
346
Origination fee
524
Account
Maintenance
Fee
360
Maximum Term
(in months)
605
318
427
250
414
169
Mean
$414.93
$7,552.30
$29.73
$3.13
8.09
Median
$250.00
$5,000.00
$25.00
$.00
6.00
Mode
$500.00
$5,000.00
$.00
$.00
6
Minimum
$.00
$1,000.00
$.00
$.00
1
Maximum
$2,500.00
$50,000.00
$129.00
$50.00
60
Because only 59 banks in the sample reported offering tax refund loans, it is difficult to draw
meaningful inferences to the bank population. However, the sample data suggest that there may be
substantial differences among regions and tiers, and between urban and rural locations, for loan fees
and restrictions.
265
Credit Products
Consumer Credit Cards
Question IX D. Does the bank offer consumer credit cards (e.g., Visa,
MasterCard)?
Yes
No
Over a third (35.7 percent) of banks offer consumer credit cards, either issued by the bank or by a
third party.
QIXD. Figure 1. Does the bank offer consumer credit cards?
Valid
Frequency
405
Weighted
Frequency
4673
Weighted
Percent
64.3
Yes
262
2597
35.7
Total
667
7270
100.0
18
170
685
7440
No
Missing
System
Total
A smaller percentage of New England banks (13.3 percent) offer consumer credit cards than banks
in the East North Central region (45.8 percent) and the Pacific region (52.2 percent).
QIXD. Figure 2. Region
No
Count
%
Yes
Count
%
Total Count
%
New
England
386
MidAtlantic
409
86.7%
72.1%
Does the bank offer consumer credit cards?
East
West
East
West
South
South
North
North
South
Atlantic
Central
Central Central Central
Mountain
574
412
811
701
879
280
68.2%
62.8%
70.7%
54.2%
63.6%
59.0%
Pacific
220
47.8%
59
158
268
244
335
593
504
195
241
13.3%
27.9%
31.8%
37.2%
29.3%
45.8%
36.4%
41.0%
52.2%
446
567
842
655
1146
1294
1383
475
461
100.0%
100.0%
100.0%
100.0%
100.0% 100.0%
100.0%
100.0%
100.0%
266
Credit Products
A greater percentage of banks in Tier 1 (86.4 percent) offer consumer credit cards than smaller
banks in Tier 2 (47.4 percent) and Tier 3 (34.6 percent).
QIXD. Figure 3. Tier
Does the bank offer consumer credit cards?
Tier 1
No
%
Yes
281
Tier 3
4389
13.6%
52.6%
65.4%
Count
%
Total
3
Count
20
253
2324
86.4%
47.4%
34.6%
Count
%
Tier 2
23
534
6713
100.0%
100.0%
100.0%
There is a difference between urban and rural banks that offer consumer credit cards. About a third
(33.9 percent) of rural banks offer credit cards, compared with 37.8 percent of urban banks.
QIXD. Figure 4. Urban/Rural
Does the bank offer consumer
credit cards?
No
Count
%
Yes
Count
%
Total
Count
%
Rural HQ
2557
Urban HQ
2115
66.1%
62.2%
1313
1284
33.9%
37.8%
3870
3400
100.0%
100.0%
267
Credit Products
Question IX D-1. If yes, what is required for someone to qualify for a
traditional credit card? (Check all that apply)
Social Security number
Minimum credit score
Review of credit history
Proof of income
Other
The majority of banks require a Social Security number, credit history review and/or minimum
credit scores in order for individuals to qualify for a traditional credit card.
QIXD-1. Figure 1. Summary of Bank Requirements for Credit Cards
Percent of Banks
Requiring
Eligibility Requirements
Social Security Number
77.5%
Review of Credit History
77.4%
Minimum Credit Score
52.1%
Proof of Income
48.1%
Other
29.6%
QIXD-1. Figure 2. Social Security Number
Weighted Weighted
Frequency Frequency Percent
Valid
QIXD-1. Figure 5. Proof of Income
No
55
576
22.5
Yes
202
1983
77.5
Yes
123
1226
48.1
100.0
Total
257
2549
100.0
5
48
262
2597
Total
Missing System
Total
257
2559
5
38
262
2597
Valid
Missing System
Total
QIXD-1. Figure 3. Minimum Credit Score
Valid
No
Yes
Total
Missing System
Total
QIXD-1. Figure 6. Other
Weighted Weighted
Frequency Frequency Percent
114
1220
47.9
143
1329
257
2549
5
48
262
2597
No
Weighted Weighted
Frequency Frequency Percent
134
1323
51.9
Valid
No
Weighted Weighted
Frequency Frequency Percent
183
1777
70.4
52.1
Yes
72
745
29.6
100.0
Total
255
2522
100.0
7
75
262
2597
Missing System
Total
QIXD-1. Figure 4. Review of Credit History
Valid
No
Yes
202
1973
77.4
Total
257
2549
100.0
5
48
262
2597
Missing System
Total
Weighted Weighted
Frequency Frequency Percent
55
576
22.6
268
Credit Products
The most frequently mentioned categories under “other” are: credit card offered through a third
party (46), source of income and ability to repay (8), debt-to-income ratio (5), and proof of residency
(5).
There are few differences among regions or tiers for eligibility requirements to qualify for a
consumer credit card.
There are few differences between urban and rural banks for requirements to qualify for a consumer
credit card.
Question IX D-2. If yes, for your “basic” credit card, please indicate the
following:
Initiation
Fee
Annual
Fee
Acct.
Maintenance
Fee
Late
Payment
Fee
Over the
Limit Fee
Typical
Credit
Limit
Min.
APR
Max.
APR
Typical
APR
Maximum
Term
(Months)
For banks that offer credit cards, both the median and mode for initiation fees, annual fee, and
account maintenance fees are $0.00. Late payment and over-the-limit fees are much more common,
with a mean of $22.17 for late payment and $25.37 for over-the-limit (OTL) fees.
QIXD-2. Figure 1. Statistics
Weighted
N
Valid
Missing
Initiation Fee
1120
Annual Fee
1305
Account
Maintenance
Fee
1096
Late Payment
fee
1617
Over-thelimit Fee
1582
1477
1293
1501
980
1016
Mean
$.37
$8.42
$.04
$21.54
$23.45
Median
$.00
$.00
$.00
$20.00
$25.00
Mode
$.00
$.00
$.00
$25.00
$25.00
Minimum
$.00
$.00
$.00
$.00
$.00
Maximum
$30.00
$55.00
$6.00
$39.00
$50.00
269
Credit Products
There is a difference between tiers for OTL fees on credit cards. Larger banks have higher OTL
fees, with Tier 1 banks charging an average of $34.44, compared with $27.43 in Tier 2 and $22.74 in
Tier 3.
QIXD-2. Figure 2. Tier 1
N
Valid
Missing
Initiation Fee
14
Annual Fee
14
Account
Maintenance
Fee
14
Late Payment
Fee
15
Over-thelimit Fee
17
6
6
6
5
3
Mean
$.00
$1.15
$.00
$22.64
$34.44
Median
$.00
$.00
$.00
$24.00
$37.00
Mode
$.00
$.00
$.00
$19.00(a)
$39.00
Minimum
$.00
$.00
$.00
$.00
$15.00
Maximum
$.00
$15.00
$.00
$39.00
$39.00
Annual Fee
170
Account
Maintenance
Fee
166
Late Payment
Fee
194
Over-thelimit Fee
198
Multiple modes exist. The smallest value is shown.
QIXD-2. Figure 3. Tier 2
N
Valid
Missing
Initiation Fee
163
90
83
87
59
55
Mean
$.00
$6.57
$.15
$23.81
$27.43
Median
$.00
$.00
$.00
$23.50
$29.00
Mode
$.00
$.00
$.00
$15.00
$39.00
Minimum
$.00
$.00
$.00
$.00
$.00
Maximum
$.00
$45.00
$6.00
$39.00
$39.00
Initiation Fee
943
Annual Fee
1121
Account
Maintenance
Fee
916
Late Payment
Fee
1408
Over-thelimit Fee
1367
QIXD-2. Figure 4. Tier 3
N
Valid
Missing
1381
1203
1408
916
957
Mean
$.43
$8.79
$.03
$21.22
$22.74
Median
$.00
$.00
$.00
$20.00
$25.00
Mode
$.00
$.00
$.00
$25.00
$25.00
Minimum
$.00
$.00
$.00
$.00
$.00
Maximum
$30.00
$55.00
$1.75
$39.00
$50.00
270
Credit Products
There is a difference among regions for OTL fees on credit cards. The East North Central ($27.09)
and Mountain ($27.04) regions have higher OTL fees than the West South Central ($18.25), West
North Central ($20.58), and New England ($20.92) regions.
QIXD-2. Figure 5. New England
N
Valid
Initiation Fee
18
Missing
Annual Fee
32
Account
Maintenance
Fee
18
Late Payment
Fee
32
Over-thelimit Fee
32
41
27
41
27
27
Mean
$.00
$23.36
$.00
$14.48
$20.92
Median
$.00
$25.00
$.00
$10.00
$15.00
Mode
$.00
$18.00(a)
$.00
$29.00
$29.00
$.00
$.00
Maximum
$.00
$45.00
a Multiple modes exist. The smallest value is shown.
$.00
$.00
$.00
$29.00
$10.00
$29.00
Account
Maintenance
Fee
82
Late Payment
Fee
111
Over-thelimit Fee
112
Minimum
QIXD-2. Figure 6. Mid-Atlantic
N
Valid
Initiation Fee
82
Missing
Annual Fee
85
76
73
76
48
47
Mean
$.00
$14.85
$.00
$20.78
$21.57
Median
$.00
$20.00
$.00
$20.00
$20.00
Mode
$.00
$.00
$.00
$35.00
$35.00
Minimum
$.00
$.00
$.00
$.00
$.00
Maximum
$.00
$35.00
$.00
$35.00
$39.00
Annual Fee
137
Account
Maintenance
Fee
109
Late Payment
Fee
143
Over-thelimit Fee
116
QIXD-2. Figure 7. South Atlantic
N
Valid
Missing
Initiation Fee
109
159
131
159
125
152
Mean
$.00
$6.71
$.00
$19.44
$24.69
Median
$.00
$.00
$.00
$19.00
$29.00
Mode
$.00
$.00
$.00
$19.00
$29.00
Minimum
$.00
$.00
$.00
$.01
$.00
Maximum
$.00
$34.00
$.00
$39.00
$39.00
271
Credit Products
QIXD-2. Figure 8. East South Central
N
Valid
Missing
Initiation Fee
113
Annual Fee
116
Account
Maintenance
Fee
113
Late Payment
Fee
172
Over-thelimit Fee
158
131
128
131
72
86
Mean
$.00
$1.77
$.00
$24.81
$25.59
Median
$.00
$.00
$.00
$25.00
$29.00
Mode
$.00
$.00
$.00
$19.00
$29.00
Minimum
$.00
$.00
$.00
$10.00
$10.00
Maximum
$.00
$12.00
$.00
$39.00
$35.00
Account
Maintenance
Fee
164
Late Payment
Fee
202
Over-thelimit Fee
229
a Multiple modes exist. The smallest value is shown.
QIXD-2. Figure 9. West South Central
N
Valid
Missing
Initiation Fee
178
Annual Fee
202
157
133
171
133
106
Mean
$.00
$7.41
$.00
$19.14
$18.25
Median
$.00
$.20
$.00
$15.00
$15.00
Mode
$.00
$.00
$.00
$15.00
$10.00
Minimum
$.00
$.00
$.00
$.00
$.00
Maximum
$.00
$25.00
$.00
$39.00
$39.00
Initiation Fee
244
Annual Fee
299
Account
Maintenance
Fee
271
Late Payment
Fee
391
Over-thelimit Fee
394
QIXD-2. Figure 10. East North Central
N
Valid
Missing
349
294
321
202
198
Mean
$.00
$6.57
$.00
$23.19
$27.09
Median
$.00
$.00
$.00
$19.00
$29.00
Mode
$.00
$.00
$.00
$15.00
$39.00
Minimum
$.00
$.00
$.00
$.00
$5.00
Maximum
$.00
$55.00
$.00
$39.00
$39.00
272
Credit Products
QIXD-2. Figure 11. West North Central
N
Valid
Initiation Fee
189
Missing
Annual Fee
206
Account
Maintenance
Fee
148
Late Payment
Fee
329
Over-thelimit Fee
292
315
298
356
174
212
Mean
$.00
$7.48
$.00
$19.49
$20.58
Median
$.00
$.00
$.00
$20.00
$20.00
Mode
$.00
$.00
$.00
$10.00
$10.00
Minimum
$.00
$.00
$.00
$1.00
$.00
Maximum
$.00
$55.00
$.00
$39.00
$50.00
Initiation Fee
69
Annual Fee
82
Account
Maintenance
Fee
82
Late Payment
Fee
110
Over-thelimit Fee
110
QIXD-2. Figure 12. Mountain
N
Valid
Missing
127
113
113
86
86
Mean
$.00
$7.48
$.04
$27.96
$27.04
Median
$.00
$.00
$.00
$29.00
$29.00
Mode
$.00
$.00
$.00
$25.00
$25.00
Minimum
$.00
$.00
$.00
$10.00
$.00
$.00
$35.00
a Multiple modes exist. The smallest value is shown.
$1.00
$39.00
$39.00
Late payment
fee
128
Over the
limit fee
138
Maximum
QIXD-2. Figure 13. Pacific
N
Valid
Missing
Mean
Initiation fee
118
Annual Fee
145
Account
maintenance
fee
108
123
96
133
113
103
$3.48
$15.39
$.42
$20.49
$23.51
Median
$.00
$15.00
$.00
$19.00
$25.00
Mode
$.00
$.00
$.00
$10.00
$25.00
Minimum
$.00
$.00
$.00
$7.00
$10.00
Maximum
$30.00
$50.00
$6.00
$39.00
$39.00
There is no difference between urban and rural banks for over-the-limit fees on credit cards.
273
Credit Products
Question IX D-3. Does having a deposit account with the bank improve a
customer’s ability to receive a credit card?
Yes
No
Forty-two percent (42.0 percent) of banks that offer credit cards improve a customer’s ability to
receive a credit card if they have a deposit account with the bank.
QIXD-3. Figure 1. Does having a deposit account improve a customer's ability to receive a credit card?
Valid
Missing
Total
Frequency
138
Weighted
Frequency
1388
Yes
102
1003
42.0
Total
240
2391
100.0
No
System
22
207
262
2597
Weighted
Percent
58.0
There is no difference among regions or tiers for a customer’s ability to receive a credit card.
There is no difference between urban and rural banks for a customer’s ability to receive a credit
card.
Question IX D-3a. If yes, how?
Ninety banks explained how having a deposit account improves a customer’s ability to receive a
credit card.
The comments indicate that it is beneficial for customers who are looking to open a credit card
account to have a deposit account with the bank. Respondents reported that having a deposit
account improves a customer’s ability to obtain credit because it shows that the customer already has
a banking relationship and allows the bank to review account history. Through this account history,
banks can determine the customer’s “stability” and assess their ability to repay. Some sample banks
reported that they do not offer unsecured loans because their policies require a banking relationship
in order to receive a credit card. Therefore, non-customers will not be approved for credit cards at
these banks.
274
Credit Products
Question IX D-4. Does the bank offer secured credit cards for established
customers who do not qualify for a traditional credit card?
Yes
No
About a quarter (25.3 percent) of all banks that offer credit cards offer a secured credit card.
QIXD-4. Figure 1. Does the bank offer secured credit cards for customers who don't qualify for a traditional
one?
Valid
Frequency
173
No
Missing
Weighted
Frequency
1836
Weighted
Percent
74.7
Yes
75
623
25.3
Total
248
2459
100.0
System
Total
14
138
262
2597
There are differences among regions for banks that offer secured credit cards. No banks in New
England report offering secured credit cards, which is different than Pacific region banks (51.4
percent).
QIXD-4. Figure 2. Region
Does the bank offer secured credit cards for customers who don't qualify for a traditional one?
No
Count
%
Yes
New
MidEngland Atlantic
59
98
100.0%
Count
%
East
South
Central
169
85.7%
79.1%
West
South
East North
Central
Central
260
401
80.8%
68.1%
West
North
Central
Mountain
404
130
84.7%
66.6%
Pacific
104
48.6%
46
35
44
62
188
73
65
110
31.7%
14.3%
20.9%
19.2%
31.9%
15.3%
33.4%
51.4%
144
247
213
322
589
476
195
214
100.0% 100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
%
Total
68.3%
Count
South
Atlantic
212
59
A smaller percentage of banks in Tier 3 (12.6 percent) offer secured credit cards than banks in Tier 1
(30.0 percent).
QIXD-4. Figure 3. Tier
Does the bank offer secured credit cards for
customers who don't qualify for a traditional one?
Tier 1
No
Count
%
Yes
Count
%
Total
Count
%
Tier 2
15
264
Tier 3
3609
70.0%
69.7%
87.4%
6
114
520
30.0%
30.3%
12.6%
21
378
4129
100.0%
100.0%
100.0%
275
Credit Products
There is a difference between urban and rural banks for banks that offer secured credit cards. A
lower percentage (12.5 percent) of rural banks offer secured cards, compared with16.0 percent of
urban banks.
QIXD-4. Figure 4. Urban/Rural
Does the bank offer secured credit cards
for customers who don't qualify for a
traditional one?
Rural HQ
No
Count
%
Yes
Count
%
Total
Count
%
2110
Urban HQ
1778
87.5%
84.0%
301
339
12.5%
16.0%
2411
2117
100.0%
100.0%
Question IX D-4a. If yes, please indicate the following:
Minimum
Acct.
Late
Credit
Initiation Annual Maintenance Paymen Over the
Score
Fee
Fee
Fee
t Fee
Limit Fee
Typical
Credit
Limit
Min.
APR
Max. Typica
APR l APR
Most banks that offer secured credit cards charge annual fees and over-the-limit fees. The median
annual fee is $20, and the median over-the-limit fee is $29.
QIXD-4a. Figure 1. Statistics
Annual fee
367
Account
Maintenance
Fee
249
Over-thelimit Fee
377
338
257
374
246
263.90
$14.73
$20.14
$1.11
$25.45
.00
$.00
$20.00
$.00
$29.00
Mode
0
$.00
$.00
$.00
$39.00
Minimum
0
$.00
$.00
$.00
$.00
Maximum
700
$300.00
$65.00
$17.00
$39.99
Weighted
N
Valid
Missing
Mean
Median
Minimum
Credit Score
144
Initiation Fee
286
479
There are minimal differences among regions or tiers for secured credit card fees and requirements.
There are no differences between urban and rural banks for secured credit card fees and
requirements.
276
Credit Products
Question IX D-5. Can a cardholder “graduate” from a secured credit card to
a traditional credit card?
Yes
No
Of the banks that offer a secured credit card, 96.3 percent allow cardholders to “graduate” to a
traditional credit card.
QIXD-5. Figure 1. Can a cardholder 'graduate' from a secured card to a traditional credit card?
Valid
Missing
Total
Frequency
3
Weighted
Frequency
21
Weighted
Percent
3.7
Yes
66
531
96.3
Total
69
551
100.0
6
72
75
623
No
System
There are no differences among regions or tiers for customers being able to graduate from a secured
card.
There is no difference between urban and rural banks for customers being able to graduate from a
secured card.
Question IX D-5a. If yes, how?
Sixty-six banks respondents described how cardholders can graduate from a secured credit card to a
traditional credit card.
Banks explained that this transition is possible when customers establish an acceptable credit history.
Accounts must be in good standing, and customers need to make payments on time for a particular
period of time, depending on each bank’s policy. In doing so, individuals can improve their credit
score to satisfy the bank’s specific standards. Variations in the length of time required for assessment
by banks are as follows:
Thirteen banks reported that they permit individuals to apply for a traditional credit card after 12
months of good standing.
Four banks require 18 months of good standing.
Two banks require 22 months of good standing.
Four banks require 24 months of good standing
Three banks require between 6 and 24 months of good standing, depending on each customer’s
circumstances.
In addition, banks that only offer credit cards through a third party report having no control over
such situations because all decisions are made at the discretion of the third-party provider.
277
Credit Products
278
Credit Products
Chapter
12
Case Studies
In addition to administering and reporting results from the Survey of Banks’ Efforts to Serve the
Unbanked and Underbanked, Dove Consulting also developed 16 Case Studies. The purpose of the
case studies is to highlight a variety of successful strategies that banks have developed to bring
unbanked and underbanked individuals into the conventional banking system. These case studies
permit deeper analysis of the different business models used to serve these households and provide
insight into the experiences of a range of commercial banking and savings institutions that offer
innovative approaches to serving unbanked and underbanked individuals.
This chapter provides information about the process used to select case study banks, summary
tables to highlight basic characteristics of the banks, and three- to five-page descriptions which detail
each bank’s situation, target population, innovative approaches, and lessons learned. Although case
study banks employ a variety of approaches, they are categorized in this chapter by three primary
strategies:
Financial Education and Outreach
Obstacles and Access
Targeted Products and Services
These case studies are based on information gathered from survey responses, secondary research,
and most importantly, in-depth interviews with bank managers to more fully understand how these
banks have developed and implemented innovative and successful strategies to serve the unbanked
and underbanked population.
Case Study Methodology
In order to capture a broad range of innovative and successful bank strategies for serving the
unbanked and underbanked, Dove Consulting and the FDIC teams worked collaboratively to
compile a list of prospective case study candidates. Candidates were required to pass both “good
standing” criteria with compliance and provide a balance across geographic area and bank size.
Selection Process
A limited number of case studies were developed to provide information about specific strategies
that some financial institutions have implemented to expand their customer base and serve
underbanked consumers. Case study banks were selected on the basis of a variety of different types
of information, including industry research and bank survey questionnaire responses. The final
selection of banks reflects a variety of strategies to serve the unbanked as well as types of FDICinsured institutions.
279
Case Studies
The banks chosen for case studies were selected in a two-stage process. The first set of potential
case study banks were identified by the FDIC based on industry research prior to survey
administration. These banks were reviewed against certain good standing criteria which included
regulatory ratings of 1 or 2 for compliance, Community Reinvestment Act (CRA), and composite
safety and soundness.
The second set of potential case study banks was identified by Dove Consulting based on Dove’s
confidential review of banks’ survey responses. Banks that revealed innovative and successful
strategies to converting unbanked and underbanked individuals into the conventional banking
mainstream in their survey responses and that met the FDIC good standing criteria were added to
the potential case study bank list.
Selection Criteria
Approval of proposed case study candidates was based on fulfillment of two criteria.
Good Standing Criteria: Compliance screenings were conducted by the FDIC team. The
FDIC evaluated case study candidates based on good standing criteria, including Compliance
Rating, Composite CRA Rating, and Soundness Rating of either 1 or 2 as of Q1 2008.
Diversity of Example Criteria: Candidates proposed for the case study during the presurvey selection phase were screened on their innovative approaches and strategies applied to
serving the unbanked and underbanked. In addition, candidates selected on the basis of survey
responses were screened on the diversity of market served, geography, and size and type of
institution. The following tables detail each diversity factor considered and the distribution of
these factors across the 16 case study banks interviewed.
Invitation Process
Potential case study banks were invited to voluntarily participate by Dove Consulting. Dove
contacted each potential bank by mail, seeking to obtain agreement to participate from a senior
manager in each targeted organization. Banks that consented to be case study candidates were asked
to complete the survey questionnaire and were interviewed at least once by Dove Consulting. Draft
case studies were submitted to participating banks for their approval and consent.
Interview Process
Once a bank agreed to participate as a case study, Dove Consulting scheduled an interview with the
bank’s managers and subsequently conducted an interview. Dove Consulting conducted most
interviews via telephone and conducted two in person. The interviews were based on the bank’s
survey responses and gathered relevant background information about the bank’s strategy, including
target population, initiatives, and lessons learned. Development of case study drafts followed a
common template. After an internal review process, drafts were submitted to the participating banks
for their approval and consent.
280
Case Studies
Distribution of Case Study Banks
Collectively, case study banks cover a variety of strategies for serving the unbanked and
underbanked that reflect the unique needs of their markets. The table below highlights the variety of
initiatives described in each case study.
Strategy
Extended Hours
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
281
X
X
X
X
X
X
X
Asset-Building
Products
X
Credit Products
X
X
X
X
X
X
X
X
X
Location
X
Transaction Products
X
X
X
X
X
X
X
X
X
X
X
X
Identification
X
Technology
Bancorp South
Bangor Savings Bank
Carver State Bank
Central Bank of Kansas City
Citibank
Citizens Union Bank of Shelbyville
The Commerce Bank of Washington
Fort Morgan State Bank
International Bank of Commerce
KeyBank
Mitchell Bank
Monroe Bank and Trust
Ridgewood Savings Bank
Second Federal Savings of Chicago
Products
and Services
Obstacles and Access
Branch Configuration
X
X
Employer Partnership
X
X
School Partnership
Non-Profit/Community
Partnership
Amalgamated Bank
Artisans Bank
Government Agency
Partnership
Education Program
Education and Outreach
Bilingual Staff
CS. Figure 1.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Case Studies
Financial institutions selected for inclusion as case studies also demonstrate diversity in their target
market, asset size, and institution type. By highlighting variations in institutional characteristics, the
case studies demonstrate how different types of banks approach common challenges in serving the
unbanked and underbanked.
Institutional Characteristics
Amalgamated Bank
Artisans Bank
Bancorp South
Bangor Savings Bank
Carver State Bank
Central Bank of Kansas City
Citibank
Citizens Union Bank of Shelbyville
The Commerce Bank of Washington
Fort Morgan State Bank
International Bank of Commerce
KeyBank
Mitchell Bank
Monroe Bank and Trust
Ridgewood Savings Bank
Second Federal Savings of Chicago
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
282
Community
X
X
X
X
X
X
X
X
Regional
Institution Type
National
Tier 3
Tier 2
Asset Size
NonImmigrant
Immigrant/
Minority
Target
Market
Tier 1
CS. Figure 2.
X
X
X
X
Case Studies
Case study candidates were also evaluated on geographical diversity to ensure representation from
each regional division and to compile a complete perspective of banks’ challenges and approaches in
a variety of markets. The following table details the distribution of the 16 case study banks across
the country.
Amalgamated Bank
Artisans Bank
Bancorp South
Bangor Savings Bank
Carver State Bank
Central Bank of Kansas City
Citibank
Citizens Union Bank of Shelbyville
The Commerce Bank of Washington
Fort Morgan State Bank
International Bank of Commerce
KeyBank
Mitchell Bank
Monroe Bank and Trust
Ridgewood Savings Bank
Second Federal Savings of Chicago
Pacific
Mountain
West North
Central
East North
Central
West South
Central
East South
Central
Mid-Atlantic
South Atlantic
Geography
New England
CS. Figure 3.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
283
Case Studies
284
Case Studies
Banks’ Efforts with Education and Outreach
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
Retail Branch Information
•
•
•
Services Provided to NonCustomers
Account Opening &
Onboarding
285
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other lowcost accounts, products and
services used by the
un/underbanked.
Deposit Products
•
• Savings Accounts
• Payment Products
• Credit Products
Case Studies
Education and Outreach
The seven case studies featured in this section highlight a variety of effective approaches that
leverage partnerships with third-party organizations, such as employers, schools, nonprofit
organizations, and assistance agencies.
Institution
Target Population
Initiative
Amalgamated Bank
(New York, NY)
Union workers, primarily
immigrant and low income
Created educational curriculum specific to needs of target
market; partners with union and local government agencies
to deliver outreach and products
Citibank, NA
(New York, NY)
Low-income, urban individuals
in their area
Leverages United Way case management and outreach
expertise in area to market, educate, and open entry-level
accounts for clients
The Commerce Bank
of Washington
(Seattle, WA)
Homeless population, mentally
ill individuals
Automated check cashing processes and improved access
to banking services for “unbankable” individuals by
providing back-office systems and support to The
Compass Center, a nonprofit assistance agency
Fort Morgan State Bank
(Fort Morgan, CO)
Employees of food processing
company in Colorado
Established branch at plant facility, introduced services
during new employee orientation, and opened accounts to
encourage direct deposit of paychecks
International Bank
of Commerce
(Laredo, TX)
Elementary school students in
predominantly Mexican
immigrant communities in their
areas
Partners with elementary schools to create student-run
“micro-communities,” simulated societies in which
students earn wages in mock currency, conduct banking
transactions, and learn to manage finances
Mitchell Bank
(Milwaukee, WI)
High school students in large
Mexican and Central American
immigrant communities in their
areas
Partners with a local high school to establish full-service
branch on campus to open accounts for students, provide
financial literacy education, and build trust and awareness
in wider community
Monroe Bank and Trust
(Monroe, MI)
Low- to moderate-income
individuals in the bank’s county,
many of whom are affected by
rising unemployment
Established education program, an off-shoot of its existing
volunteer organization, to provide educational outreach in
its markets by bringing seminars and programs to faithbased organizations, service agencies, and high schools
Common Lessons Learned
Financial education is the primary vehicle for serving the unbanked and underbanked populations and is essential to
helping them make informed decisions.
Employers and community organizations can provide important insights to banks seeking to assess and understand the
needs of the unbanked market.
Partnerships with third-party organizations that leverage core competencies can supplement and complement bank
initiatives to provide outreach and serve the community.
Building strong relationships with trusted community organizations presents valuable opportunities for banks to
establish their presence and increase awareness in their service areas, which are particularly important when working
with unbanked populations.
Developing and executing a successful strategy requires innovative approaches that involve stakeholders both within
and outside of the bank.
286
Case Studies
Amalgamated Bank
Amalgamated Bank relies on strategic partnerships with community organizations and government
agencies to tailor and deliver educational outreach and banking services to different unbanked
populations in its service areas. In addition to creating a comprehensive financial literacy curriculum,
the bank also developed a specialized package of banking services for its union members, other
working class individuals, and recent immigrants. The bank continues to evolve its offerings and
approaches according to the needs of each community.
“From our perspective, serving the unbanked segment is a challenge that we take seriously, and we are still testing and refining
different approaches. Nevertheless, financial education is a strong component of the overall value we strive to deliver.”
Keith Pilkington, EVP and Chief Marketing Officer
Peter Mosbacher, CRA Officer, Head of Community Development and SVP
I. Target Population
As the nation’s only union-owned bank, Amalgamated Bank tailors and targets its products and
services to members of UNITE HERE (formed from the merger of the Union of Needletrades,
Industrial and Textile Employees and Hotel Employees and Restaurant Employees International
Union), other working class individuals, and recent immigrants. UNITE HERE represents more
than 450,000 active members and more than 400,000 retirees throughout North America. Its
membership is composed largely of immigrant workers and includes a high proportion of African
Americans, Hispanic Americans, and Asian Americans.
The bank primarily serves working class residents and small businesses in New York City, and many
low- and moderate-income families. Since early 2007, Amalgamated Bank has operated four
branches in neighborhoods identified as Banking Development Districts (BDD) by the New York
State Banking Department. These communities are typically underserved by the banking industry
and dominated by alternative service providers, such as check cashers. The bank has also begun
expanding outside of New York City to reach union members outside of its primary branch
footprint. As of September 2008, the bank operates three supermarket-based branches in Las Vegas
to serve the large population of culinary union members in that market area, as well as one branch in
each of the following markets: Pasadena, CA; Lyndhurst, NJ; and Washington, D.C.
II. Initiatives
Amalgamated Bank sees financial education as an integral part of its approach to serving unbanked
individuals. Education provides consumers with the necessary tools to understand how the banking
system works, and to manage accounts responsibly and comprehensively. In addition, it also helps
the bank ensure that it opens accounts for customers who have the requisite knowledge to handle
banking products and reduce the risk of loss due to mismanagement.
287
Case Studies
Money Sense
In the summer of 2006, the bank introduced Money Sense, an in-house branded financial education
program developed in partnership with LaGuardia Community College. The college not only
contributed to the creation of the Money Sense curriculum but also trains bank employees to
conduct sessions and effectively deliver information. Presented in four modules lasting 90 minutes
each, the Money Sense curriculum covers basic banking, credit, savings, and home ownership.
Upon successful completion of the program, the bank offers a small cash bonus toward a new nofee, no minimum balance checking account. While potential customers must still undergo the
normal account approval and opening process, the bank believes that the bonus provides additional
incentive for opening an account at Amalgamated Bank.
The bank typically offers the program in four concurrent sessions on Saturday from 9:30 a.m. to
3:30 p.m. and provides free lunches as an additional accommodation. Branches also have the option
of offering morning or evening sessions, depending on what branch personnel deem to be most
feasible and useful. All branches conduct Money Sense financial education, with an average of two
to three programs offered by each branch annually.
To optimize the impact and effectiveness of Money Sense, Amalgamated Bank advises its branch
employees to conduct education sessions only after establishing strong partnerships with third-party
community organizations. These partnerships can involve faith-based organizations, local
development corporations, and other nonprofit organizations. The bank often holds its education
sessions at the organization’s site to encourage participation in the program. Community partners
also help by sending marketing materials to its client base to raise awareness of upcoming Money
Sense seminars and other bank-related events. By leveraging community partnerships, the bank has
been able to attract between 30 and 50 individuals to each session.
For residents in the bank’s Las Vegas service area, educational sessions have been particularly
valuable. Led by a full-time community development officer, Amalgamated Bank launched a Home
Ownership and Empowerment Center in 2007 to assist the approximately 60,000 union members
and working class customers residing in the Las Vegas area. Financial education programs offer the
four Money Sense modules in addition to a session focused specifically on foreclosure prevention.
Clark County, in which Las Vegas is located, has faced some of the highest home foreclosure rates
in the country, deeply affecting union members and low-income families. In response to these major
issues and the immense need for education on foreclosures, the seminars provide individuals with an
overview of the situation, help them determine what stage of the process they are in—delinquency,
verge of delinquency, or beginning of foreclosure proceedings—and inform them of available
options for their situation. The bank also invites local credit counseling and housing agencies to
provide additional insight during the seminars. Given the impact of home foreclosures in the Las
Vegas area, the sessions have been well-attended by local residents seeking assistance and
information. In the past year, Amalgamated Bank has conducted eight foreclosure seminars,
attracting 50 to 75 attendees to each session.
Local Partnerships
The bank partners with a wide range of local community agencies and organizations to provide
additional financial education opportunities to unbanked populations.
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In collaboration with the East River Development Alliance (ERDA), Amalgamated Bank has
augmented the alliance’s existing Wealth Building Academy with financial education programs that
help unbanked individuals feel comfortable and welcome in bank branches. The objective is to
mitigate fears or misperceptions about banks as a first step to ease the unbanked into the financial
mainstream. Through this partnership, the bank also promotes the academy’s education program to
low-income residents in public housing projects and delivers Money Sense seminars through the
auspices of ERDA.
The bank currently participates in two pilot programs offered through the New York City
Department of Consumer Affairs’ Office of Financial Empowerment (OFE). In spring 2007, the
bank joined the Opportunity NYC program, the nation’s first conditional cash transfer program, in
an effort to encourage account opening and enable individuals and families on public assistance to
receive and safely access payments through direct deposit.8 Amalgamated Bank and seven other local
banks and credit unions offer Opportunity NYC savings accounts, an entry-level account with no
minimum opening balance, no monthly service fees, and a $50 bonus upon opening. In another joint
effort with the OFE, Amalgamated Bank offers the Save NYC Club Account for residents
receiving Earned Income Tax Credit (EITC). This interest-bearing account offers a 0.5 percent rate
and a city-funded 50 percent match of initial deposits up to $250 to help low- to moderate-income
families build savings. To qualify for the account and for the match, customers must save at least
$100 for up to one year. When the pilot program first began in the 2008 tax season, Amalgamated
Bank succeeded in opening 20 Save NYC Club Accounts. Based on this initial success, the bank
plans to expand the program during the 2009 tax season.
In October 2008, Amalgamated Bank will launch a pilot program for rent payments in partnership
with the New York City Housing Authority. Unbanked residents often pay their rent by cashing
checks at alternative service providers and incurring high fees to purchase money orders and make
payments. To reduce service fees and make the process more affordable for residents, Amalgamated
Bank and two other New York City-based financial institutions signed an agreement with New York
City Housing Authority to accept rent payments in cash for a smaller fee at branch locations,
process the payments for remote capture, and transfer the payments to New York City Housing
Authority. To facilitate the process, New York City Housing Authority has provided the bank with
two scanners. The bank will introduce the pilot program at its Long Island City BDD branch, and if
successful, the bank will expand the program to additional branches in 2009.
Conditional cash transfer (CCT) programs are designed to alleviate poverty in the short-term by providing additional income to poor families, and to
break the intergenerational cycle of poverty in the long-term by promoting greater investments in human capital.
8
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Union Outreach and Group Advantage Banking
In an effort to serve its core customer base, Amalgamated Bank provides specific banking services
that address the needs of union members. During outreach sessions, the bank combines education
with financial incentives for establishing customer relationships. Amalgamated Bank tailors
education classes to its audience of union members in a particular industry and delivers seminars at
the workplace to improve convenience and accessibility. In addition, outreach visits serve as an
opportunity to inform them about the Group Advantage Banking, a package of services specially
priced and specifically packaged for union members with direct deposit. Group Advantage Banking
offers benefits not available to the general public, including a free checking account with a $50
bonus for direct deposit, free savings account with a $25 bonus for establishing automatic savings
deductions from an Amalgamated checking account, unlimited check writing, free first order of 50
checks, higher relationship rates on qualified savings accounts, and preferred rates on loan products.
In its Las Vegas market area, Amalgamated Bank plans to launch a payroll card product in October
2008. As hotels, casinos, and other major employers begin moving toward mandatory direct deposit
of paychecks, UNITE HERE has expressed strong interest in the bank offering a payroll card
product because it will provide workers with an alternative to deposit accounts while meeting direct
deposit requirements. The bank developed the product in close communication with the union,
informing union leadership of associated fees and pricing structure and providing them with
opportunities to review and provide input for refining the product. In an effort to provide
competitive and favorable pricing for union members, the bank also deployed an ATM at the
UNITE HERE headquarters, where payroll card customers pay a reduced surcharge of 50 percent
below market rates to withdraw funds. This enables workers to avoid using alternative service
providers to cash paychecks without having to manage conventional deposit accounts. The product
will serve as an entry point for transitioning unbanked union members into deposit account
customers and the economic mainstream.
III. Lessons Learned
Banks cannot effectively reach out to unbanked individuals without the support of a
strategic nonprofit or government partner. Identifying, addressing, and serving this segment
poses a daunting task for banks that choose to work independently. Community partnerships
can provide critical assistance by helping banks navigate this complex and dynamic population.
Strong community partners are well-respected, fiscally sound, and have a solid
reputation in the community. They must also recognize and understand the bank’s business
needs and obligations. Community partnerships exhibiting these characteristics and founded on
mutual understanding provide a strong platform for developing and delivering joint efforts to
serve the unbanked and underbanked.
Providing education to unbanked individuals provides mutual benefit for consumers and
institutions. Financial literacy training and banking education equip unbanked individuals with
the knowledge to responsibly and comprehensively manage accounts and make informed
financial decisions. Banks benefit from improved financial management practices, as it reduces
risk and increases the number of customers and deposits.
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About Amalgamated Bank
Amalgamated Bank, headquartered in New York, New York, was established in 1923.
Originally chartered by the Amalgamated Clothing Workers of America Union (ACWA),
the bank’s mission was to provide affordable banking services to working men and women.
In 1995, the Amalgamated Clothing & Textile Workers Union and the International Ladies
Garment Workers Union merged in order to form the Union of Needletrades, Industrial
and Textile Employees (UNITE!). In 2004, UNITE! and the Hotel Employees and
Restaurant Employees International Union (HERE) merged. The Bank is now owned by
UNITE HERE.
Currently, Amalgamated Bank operates out of 19 branches in New York, NY. The bank also
maintains one branch in Lyndhurst, NJ; one branch in Pasadena, CA; one branch in Washington,
D.C.; and three supermarket branches in Las Vegas, NV. The bank offers a variety of consumer and
commercial credit and deposit products, as well as financial services. Available credit products
include home equity loans, auto loans, personal loans and lines of credit, commercial mortgages,
commercial loans and lines, as well as standby letters of credit. Examples of deposit account
offerings include regular savings accounts, club accounts, checking accounts, money market
accounts, CDs, and IRAs. Other provided services include direct deposit and safety deposit box
rental, as well as the sale of travelers and gift checks, money orders, and United States Savings
Bonds. The bank faces intense competition in its service areas from many large money-center
institutions, national and regional banks, savings and loan associations, and mortgage brokers.
Assets, $Th, as of September 30, 2008: $4,573,953
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Citibank, NA
Citibank’s citizenship work in the United States focuses broadly on community revitalization and
preservation, asset building, and financial education, particularly for unbanked and underbanked,
and low- to moderate-income (LMI) individuals. To achieve these objectives, Citibank relies on
partnerships with many local nonprofit and community organizations to deliver specialized services,
education, and bank products to the people in these groups. Citibank also invests in market research
to increase the banking industry’s understanding and awareness of unbanked and LMI populations
and to inform and refine its strategies for serving these segments of the population.
“Products and services do not make a difference if they’re not culturally relevant to the community you are serving.”
– Victor Ramirez, Citi Community Relations
I. Target Population
Citibank’s efforts through the Saving for the American Dream program focus on low-income,
EITC-eligible residents of the Greater Los Angeles area, many of whom are unbanked. IDA
participants can be EITC-eligible or earn less than 200 percent of the Federal Poverty guidelines,
delineated by the Department of Health and Human Services (DHHS). In Los Angeles, that
translates to approximately 60 percent to 80 percent of the area median income. Citibank makes
appropriate products available to people in this group and works to facilitate their access to these
products. For example, Citibank opens accounts at VITA sites, including community and
neighborhood centers, libraries, schools, shopping malls, and other convenient locations. (VITA is
the IRS’s Volunteer Income Tax Assistance Program for low-income, elderly, disabled, and limited
English-speaking individuals.)
As of August 30, 2008, Citibank had 463 IDA accounts in the Greater Los Angeles area that had
been opened through the Saving for the American Dream program, as well as 77 Ramp Up
Accounts. Citibank also offers the IDA program in other markets across the country. Nationally in
2007, Citibank maintained over 50 separate IDA programs with about 4,000 IDA accounts active in
its branches, exceeding $3 million.
II. Initiatives
One of Citibank’s primary partnerships in Los Angeles is with the United Way of Greater Los
Angeles (UWGLA) in its Saving for the American Dream asset-building program. Saving for the
American Dream promotes the Individual Development Account (IDA) to low-income working
families that include unbanked recipients of the Earned Income Tax Credit (EITC), the refundable
federal income tax credit for low-income working individuals and families. The IDA is a savings
account, incentivized with matching funds provided by a variety of government and private sector
sources, for “working poor” families who are building toward a specific asset goal, such as a home.
IDA account holders also are offered financial education through the Saving for the American
Dream program. This helps them understand the benefits of a mainstream savings account and
teaches skills for responsible money management.
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Initial Efforts
Citibank committed to participating in and raising awareness about the EITC and VITA programs in
Los Angeles. Citi employees participate through VITA volunteer tax assistance and encourage EITC
recipients to engage in mainstream banking by opening free checking accounts and direct-depositing
their tax refunds.
Initially, the bank’s strategy was to make its branch employees available to open accounts at VITA
sites and to offer a $20 to $25 incentive for new deposit customers. However, Citibank employees
faced difficulties in attracting interest and describe being hampered by the identification and due
diligence process required for account opening. In 2005, Citibank’s first year working with
EITC/VITA in Los Angeles, the bank opened only ten accounts. Further, these new customers
withdrew all funds from their accounts soon after opening, resulting in account closure due to lack
of use and insufficient deposit balance.
Consequently, Citibank developed an approach that would more effectively promote the saving of
EITC funds and the development of long-term banking relationships with recipients. This approach
would be based on partnerships with established, local nonprofit organizations.
Community Partnerships
Citibank tapped into the resources of its primary partner in Los Angeles, the UWGLA, and their
asset-building partnership collaborative. This partnership allows for a division of tasks that
capitalizes on each partner’s respective strengths. UWGLA’s partners have substantial experience in
case management and outreach work and, once trained about banking products, can comfortably
present information and provide guidance to clients. For its part, Citibank takes responsibility for
program management and provides educational materials and training to UWGLA staff and
partners.
Additionally, UWGLA—as a well-established and reputable community organization—can
independently raise matching funds for IDAs.
The benefits of Citibank’s partnership with UWGLA, and with third-party community organizations
in general, go beyond process efficiency. The diverse demographics of Los Angeles County allowed
the Los Angeles EITC Campaign Partnership to expand outreach to various ethnic communities
through their partners, including the Chinese, Hispanic, Filipino, Armenian, and Korean
communities. The local partner can help Citibank mitigate language and cultural barriers. Its staff
can translate banking information and can build trust with immigrant clients. This helps Citibank
establish a strong local community connection and deliver services and programs tailored to the
needs and preferences of the local market segments.
Citibank’s IDA-based asset-building initiative in the Greater Los Angeles area, which began in the
1990s, is county-wide. The large-scale program is delivered through 19 local nonprofit organizations,
with UWGLA serving as the lead coordinating agency of the program. UWGLA provides the
participating nonprofits with training, capacity building, data collection, and account management
for the program. Citibank offers financial support in the form of grants from Citi and the Citi
Foundation, technical assistance, and overall program management.
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Challenges of the IDA Program
In the past five years, Citibank identified new challenges facing program participants and the bank.
For instance, participants in this federally funded IDA program were permitted to use accrued funds
only toward the purchase of new homes, small businesses, and/or post-secondary education. While
many participants initially planned to use the IDA to fund a home purchase, currently there are few
affordable housing options in the Los Angeles area. After years of making regular deposits and
participating in financial education courses, participants finally reached their savings goals only to
find that the “qualified asset” they had in mind—a home—was unavailable to them due to a lack of
affordable housing on the one hand and insufficient capital or credit on the other. Beyond the
immediate setback this situation created, the concern to Citibank was that the clients’
discouragement would negatively affect their relationship with and perception of financial
institutions in the future.
Saving for the American Dream also incurred high administrative costs. Citibank reports that the
annual costs for case management, tracking and recording of participants’ savings, and conducting
education classes average $1,400 per account.
To mitigate participants’ frustration and the program’s high overhead, Citibank helped developed a
new kind of account, the Ramp Up Accelerated Savings Account.
Ramp Up Accelerated Savings Accounts
Ramp Up Accelerated Savings Accounts were introduced in the Greater Los Angeles area for the
first time in May 2007. The savings account offers both a subsidized annual interest rate of up to 21
percent on initial deposits and monthly contributions to the Ramp Up accounts as incentives for
LMI individuals to save money. The Ramp Up account has a 15-month period, at the conclusion of
which the account holders are encouraged to transfer their savings into an investment account,
typically an IDA. Ramp Up accounts, as compared with the IDA, permit a greater range of asset
types to be acquired from the accrued funds. In addition, the Ramp Up program, with average
overhead of $300 per account, is more cost-effective than the IDA program.
Case managers and tax preparers working under the auspices of Citibank’s nonprofit community
partners promote Ramp Up Accounts to unbanked, EITC-eligible individuals at VITA sites. These
workers can open accounts through Citi’s business banking online system using the CitiEscrow
product. The direct deposit account information is then immediately entered on the participant’s tax
forms so that, as a result of this streamlining and integration, the tax refunds can be sent directly to
the new account.
Ramp Up Accounts are a kind of “trustee account,” to be implemented in a nonprofit setting. The
case managers serve as agents of Citibank and collect all identification and other necessary
documentation (including representative payee forms and W9s), so the identification and verification
process for account opening is streamlined and expedited. In addition, since the product is not a
checking account, ChexSystems (a check verification service and consumer credit reporting agency
for deposit accounts) is not consulted and any negative history on the ChexSystems database is not
an impediment, as it was in earlier initiatives to open free checking accounts for unbanked
individuals.
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Through the 2007 and 2008 tax seasons, Citibank opened a total of 77 Ramp Up accounts in the
Los Angeles area. As of August 2008, the bank has 57 active Ramp Up Accounts in Greater Los
Angeles amounting to $64,350 in cumulative deposits. Since introducing Ramp Up Accounts,
Citibank has observed that participating account holders save more consistently and are less likely to
withdraw all of their money after receiving their tax refunds. During the summer of 2007, the bank
opened 42 accounts, with an average of $600 saved per account after the first 180 days and with 80
percent of participants making regular monthly deposits. Because most Ramp Up participants are
co-enrolled in an IDA program, they also receive that program’s financial literacy training.
Citibank plans to survey Ramp Up accountholders as well as IDA account holders to determine
asset-building and purchasing trends under the program. Anecdotally, bank employees and
community organization staff observe that many EITC recipients spend their refund, which averages
$4,000 to $5,000, on basic necessities such as food, clothing, and medical expenses.
Market Research
Citibank invests in market research to assess and refine its strategies for serving the unbanked and
underbanked. For instance, the bank supported the Center for Financial Services Innovation’s
(CFSI) Underbanked Consumer Study, which was the first comprehensive national segmentation
study of the underbanked market. With a cohort of 2,800 unbanked and underbanked adults, the
study revealed detailed behavior profiles that outline market size, current use of financial products
and services, interest in financial products, preferred marketing and communication approaches, and
desired financial experience.
Citibank also supported the development of a research tool that goes beyond Census data to
develop a picture of a community’s economic activity. This was accomplished through the services
and tools developed by Social Compact, a nonprofit organization. The tool measures economic
opportunity and investment incentive by looking at data from supermarkets and utility bills. This
study helps identify effective approaches to bringing unbanked individuals into the economic
mainstream.
Future Initiatives
Following their successful efforts on behalf of the unbanked and underbanked in the Los Angeles
area, Citibank and UWGLA are exploring other markets in which to establish similar programs.
Citibank also has begun working with other financial institutions nationwide, to share insights and
best practices related to serving the unbanked and underbanked.
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III. Lessons Learned
Banks can rely on partners to deliver connections to the community by virtue of their
local experience, subject matter expertise, staff resources, and fundraising capability.
Leveraging strategic long-term partnerships with strong community organizations has been
integral to the success of Citibank’s asset-building initiatives.
Honing the knowledge of regional and local markets guides the development and
implementation of products and services that meet the needs of each market area.
Offerings are only valuable if they address the specific needs of a target population.
Flexibility and a willingness to innovate help overcome the obstacles to serve
traditionally unbanked communities. Tailoring products and services to lower-income
communities ensures that their unique needs and preferences will be met. Identifying and
addressing these nuances play an important role in a bank’s success in serving people in this
population segment.
About Citibank, NA
Found in more than 100 countries, Citibank delivers a wide array of banking, lending and
investment services to individual consumers, as well as to small businesses with up to $10 million in
annual sales. Citibank also offers a full range of financial services products to serve the needs of
small and large corporations, governments, and institutional and individual investors. The Financial
Center Network is composed of local offices and complemented by electronic delivery systems,
including ATMs and the Internet.
Specific products and services include basic banking accounts, investment services through Citicorp
Investment Services, life insurance, telephone banking, and accounts which integrate banking,
borrowing, and investing services. Client Financial Analysts are available in branches and trained to
use Citibank’s financial needs analysis tools that enable bank staff to recommend tailored solutions
for every customer.
Assets, $Th, as of September 30, 2008: $1,207,007,000
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Case Studies
The Commerce Bank of Washington
The Commerce Bank of Washington transformed and modernized banking services offered by The
Compass Center (TCC), a nonprofit homeless service provider. The Commerce Bank of
Washington provides funding, technical assistance, and banking processing services for TCC for
homeless clientele and individuals with permanent disabilities in Seattle. Clients also benefit from
financial education and counseling resources, which can also help them move into the economic
mainstream.
“We thought outside-the-box and got everyone involved—from service providers to non-profit organizations to
regulators.” – Ron Lynch, Chief Operating Officer
I. Target Population
The Compass Center (TCC) is a multi-service agency that assists homeless individuals in Seattle,
with an estimated population of 8,000 individuals. Most TCC clients earn less than 30 percent of the
service area’s median income and need assistance in seeking or maintaining housing, as they do not
have a physical address or location to receive a check. In addition, some of TCC’s clients have been
deemed by the state as mentally ill or incapable of handling their own finances, however, they can
benefit from deposit accounts to receive government benefits. Because homeless individuals
primarily operate in a cash economy, TCC recognized that they were a financially vulnerable
population within a predatory environment. While most nonprofit organizations provide
representative-payee services, homeless clients, who are not only unbanked but often deemed
“unbankable,” use check cashing agencies that charge high fees for their services. TCC addresses
one of their critical financial needs by providing assistance in cashing disability, Social Security,
veterans’ benefits, and other assistance payment checks for clients without bank accounts.
II. Initiatives
The Commerce Bank of Washington began working with TCC in 1999 when a number of bank
employees expressed interest in volunteerism and organized a community service effort to repaint
and clean the TCC’s facility. During their visit, bank employees noticed that TCC provides “quasibanking services” to Seattle’s homeless community. These services were arranged by case managers
and social workers in response to clients’ needs. At the time, the U.S. Treasury Department
announced that recipients of federal government benefit checks would be paid electronically unless
they could submit documentation that explained why payments could not be received through
electronic methods. This presented challenges to homeless and other disadvantaged individuals who
did not qualify for bank accounts or did not feel comfortable with this payment method.
Recognizing the community’s need and TCC’s concerns about this federal mandate, The Commerce
Bank of Washington worked with local organizations and the Federal Reserve Board to develop a
solution. They devised an approach that would allow The Commerce Bank of Washington to act as
a conduit for TCC’s financial services. In establishing TCC Bank, The Commerce Bank of
Washington would enable it to receive electronic payments from the government on behalf of
homeless individuals and allow them to maintain accounts for their funds. TCC would have access
to the banking system and platform, the Federal Reserve, and knowledgeable personnel without
having to handle overhead costs and regulatory issues.
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The bank helped TCC set up their systems to allow customers to receive ACH9 payments through a
second ABA Routing Transit Number10 for The Commerce Bank of Washington and assigned
specifically to TCC, which would allow transactions to route through that number and post to
individual accounts in the institution. The bank also gave TCC access to the necessary hardware
platform and core banking software to enable it to efficiently manage accounts and provide banking
services. By partitioning part of its mainframe, creating a separate cable and firewalled data network
within the bank’s existing infrastructure, TCC could utilize The Commerce Bank of Washington’s
core demand deposit account (DDA)11 banking system. With support from a second bank, The
Commerce Bank of Washington equipped TCC with an automated cash dispensing unit purchased
at wholesale from the manufacturer and maintained by services donated by an armored car
company. Bank employees trained TCC staff to properly verify customers and checks, operate the
machine, and open individual accounts for clients.
While The Commerce Bank of Washington provides back-office systems and support, TCC staff
and case workers perform the front-office functions, such as opening accounts, verifying
identification, and cashing checks. New TCC clients must provide a form of identification when
seeking banking services for the first time, and a photograph of the individual is placed in a book
linking the individual to their account. Accounts offered to TCC clients are similar to passbook
savings accounts in that clients can verify their balance and withdraw cash but are prohibited from
writing checks. As part of its assistance services, TCC staff help clients determine account
restrictions, which typically allow one withdrawal per day for a predetermined amount. Since most
clients receive recurring government and benefit payments on a monthly basis, building parameters
enables clients to spend their money incrementally and prevent impulsive withdrawals, with
sufficient funds to subsist before receiving their next payment. While clients with extenuating
circumstances, such as mental illness-related issues, emergencies, and other case management-related
exceptions, are afforded flexibility at the discretion of TCC’s personnel, those who no longer wish to
abide by these conditions can dissolve their account relationship with TCC at any time. To date,
TCC has opened 1,600 accounts for its clients.
Clients who do not have accounts either have experienced account closure, typically due to inability
to maintain their account balance, or solely prefer to use check cashing services. Decisions on the
types of checks accepted for check cashing services are made at the discretion of TCC staff. In
general, government and payroll checks are commonly accepted and cashed for a fee of 2 percent
for checks over $300. Although the bank acknowledges the inherent risks involved in check cashing
operations, the bank cites that losses incurred from providing these services have been fewer than
expected.
From the bank’s perspective, partnering with TCC provided mutual benefits. TCC staff have deep
understanding and knowledge of its client base and a strong foundation in case management, which
creates a strong position from which TCC and the bank can jointly outreach and assist homeless
9
The Automated Clearing House (ACH) Network is a nationwide batch-oriented electronic funds transfer system. ACH payments include: direct
deposit of payroll, Social Security and other government benefits, and tax refunds; direct payment of consumer bills such as mortgages, loans, utility
bills and insurance premiums; business-to-business payments; e-checks; e-commerce payments; and federal, state and local tax payments.
The ABA Routing Transit Number (ABA/RTN) serves to identify the specific financial institution responsible for the payment of a negotiable
instrument. Originally designed to identify only check processing endpoints, the ABA Routing Number has evolved to designate participants in
automated clearinghouses, electronic funds transfer, and online banking.
10
11
An account from which a depositor may withdraw funds immediately without prior notice, commonly known as a checking account
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individuals. Employees note that new clients often hear about TCC by word-of-mouth, which also
reflects its impact on the community. On the other hand, The Commerce Bank of Washington’s
capabilities as a financial institution provide valuable services to TCC’s clients, in addition to
credibility and reputation for this community organization. The bank also cites its culture of
community involvement and investment as important drivers for this initiative. The Commerce
Bank of Washington and its employees dedicate time and effort to provide staff support, IT
support, accounting and reporting, bank processing, data processing, and mainframe updates for
TCC. In 2006, this amounted to $18,000 of hard cost to The Commerce Bank of Washington.
Other service providers have also contributed to TCC, including donations from vendors of teller
software, courier services, and armored car services.
The bank believes that its work with TCC has been successful from both a social assistance and a
community reinvestment perspective and continues to seek new and innovative ways to serve its
local community. Currently, the bank is exploring the possibility of establishing a similar relationship
with The Chief Seattle Club, which provides assistance for homeless and at-risk Native American
individuals, and extending its work with TCC to serving the needs of this population.
III. Lessons Learned
The bank’s partnership with TCC leveraged core competencies of each organization to
create a more valuable approach to serving the unbanked community. Using the bank’s
unutilized capacity core banking system and available software enabled the automation of TCC’s
manual check cashing process, improving access and efficiency for unbankable individuals.
Concurrently, TCC’s case workers support account opening and the identification and
verification process, facilitating compliance with Know Your Customer regulations.
Banks can address common needs for banking services among homeless populations in
every major city and market. The Commerce Bank of Washington met with a group of CRA
officers, all of whom identified similar problems facing homeless individuals, who are often
unable to open bank accounts and have no means for safe-keeping the funds they receive from
benefit payments. Providing services for these individuals has a significant impact in serving the
unbanked.
Developing and executing a successful strategy requires innovative approaches
involving stakeholders both within and outside of the bank. Support from other nonprofit
organizations and businesses enabled The Commerce Bank of Washington to equip TCC with a
broad range of capabilities, which helped to improve the agency’s effectiveness and efficiency.
Collaborating with regulators, such as the Federal Reserve Board, not only provided valuable
insight but also credibility when exploring approaches that diverge from conventional methods
of outreach and assistance to the unbanked and underbanked.
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About The Commerce Bank of Washington
The Commerce Bank is the Washington banking subsidiary of Zion’s Bancorporation. The bank is a
$900 million institution, operating out of a single office in downtown Seattle. Its single office
organization is enhanced by a courier service which in effect gives it a “messenger service branch”
wherever its customers have local offices, or needs. This concept was approved by the Office of the
Comptroller of the Currency (OCC) in 1993. Since its opening on July 1, 1988, The Commerce Bank
has maintained a primary market focus on locally owned businesses and their principals, in the
greater Seattle, Bellevue, Mercer Island, and Kirkland metropolitan areas (and to a lesser extent the
rest of King County). Primarily a commercial bank, relationship managers handle all sizes of
businesses, bringing their experience and skills to bear on the business with less than $1 million in
revenues as well as to one with $50 million. The bank’s relationship managers are senior
professionals with an average of 25+ years experience in commercial lending.
Assets, $Th, as of September 30, 2008: $846,491
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Fort Morgan State Bank
Fort Morgan State Bank opened a branch at the Cargill Meat Solutions facility to provide banking
services and education to its 2,000 employees, many of whom are unbanked and/or new
immigrants. The bank tailors its workplace branch operations to specific needs and behaviors of the
employees and provides a package of targeted products and services to serve this population and to
compete with alternative service providers.
“While we expected that challenges would arise, our approach to serving the unbanked was to remain flexible,
accommodate the process, and learn.” - John Sneed, President and CEO
I. Target Population
For its workplace branch, Fort Morgan State Bank targets Cargill employees, many of whom are
new immigrants lacking financial literacy and banking relationships. The bank reports that
approximately 60 percent of Cargill’s employees are immigrants with high turnover rates, and there
is a constant cycle of new employees of different nationalities and ethnicities, including
Guatemalans, Puerto Ricans, and Somalians. The remaining 40 percent is composed of long-term
employees, many of whom were customers of Fort Morgan State Bank prior to the opening of its
Cargill branch.
II. Initiatives
Market Research
In 2002, Fort Morgan State Bank began investigating ways to better serve unbanked individuals
through a variety of research initiatives. The bank researched other banks’ approaches, successes,
and failures by visiting a bank in Scotts Bluff, Nebraska that had opened a Hispanic-focused branch
in its service area and consulting with banks that had established workplace branches in packing
plants. In addition, the bank conducted a focus group to identify the needs of underbanked
individuals in its service area and met with Hispanic community leaders to gain their perspective on
what products and services banks should offer to the community.
Research participants emphasized the importance of utilizing bilingual branch employees to
encourage and assist unbanked immigrants in the bank’s service area by providing education about
bank products and services. In response, the bank hired three bilingual employees and notes that
this addition to its staff has resulted in a significant improvement in its ability to outreach and serve
unbanked, immigrant individuals. Fort Morgan State Bank reports that while its research did not
define a complete and clear strategy for effectively serving the unbanked and underbanked, it
provided helpful insight and ideas for further consideration.
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Workplace Branch
As the bank continued to evaluate potential strategies based on its informative research findings, the
large Cargill facility presented an opportunity to establish a workplace banking program for
unbanked and underbanked employees. In 2006, Cargill contacted Fort Morgan State Bank about
the possibility of opening a branch at the local facility and providing banking services to its
employees. Cargill observed that during the course of the workday, employees tend to damage paper
checks. This causes inconvenience to the employer’s payroll staff, which must then reissue paper
checks to replace damaged ones unfit for deposit or cashing. Cargill sought to reduce distribution of
paper checks by encouraging direct deposit and promoting the convenience and benefit of banking
relationships. The bank capitalized on the opportunity to reach a ready-made customer base of
unbanked employees through a partnership with Fort Morgan State Bank.
In 2007, the bank opened a two-station branch at the Cargill plant in a hallway that employees
frequent at the beginning of each shift. Unlike Fort Morgan State Bank’s main branch, the Cargill
branch operates 25 hours per week, with hours accommodating employees’ lunch and break periods
and the influx of payday transactions on Thursday afternoons and Fridays. Deposit customers can
access funds through teller services during operating hours or through the on-site ATM 24 hours a
day, seven days a week. Due to the size of Cargill’s facility, the bank plans to deploy another ATM at
the other end of the plant, improving accessibility and convenience for employees who usually walk
a long distance to the branch to conduct transactions during their lunch break. The bank also offers
fee-based check cashing for non-deposit customers, with an average of 200 checks cashed per
month.
Fort Morgan State Bank presents its services as part of Cargill’s orientation program for new
employees. Cargill allocates 20 to 30 minutes for the bank to explain the Cargill Banking Benefit
Plan. The package of banking services available to employees includes a free checking account, a
complementary first box of checks, free debit card transactions for the first year, an additional 0.5
percent interest rate bonus for savings accounts, and a prepaid debit card. At the conclusion of the
presentation, the bank gathers information from employees who would like to open deposit
accounts. Since employers verify customer identity, direct deposit is the only eligibility requirement
for account opening, regardless of the individual’s ChexSystems record. The bank activates new
accounts upon the direct deposit of employees’ first paychecks. The bank reports that high visibility
among Cargill employees, convenience of the branch, and trust built through its partnership with the
employer has been helpful in establishing customer relationships.
Among new employees, few have had prior relationships with financial institutions, and most are
not familiar with the banking system. To improve financial literacy and provide basic banking
education, the bank offers financial education classes for Cargill employees and is currently
developing a joint initiative with One Morgan County, a grant-funded assistance organization for
new immigrants, to provide a financial training program using the FDIC Money Smart curriculum.
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At its Cargill branch, Fort Morgan State Bank reports 400 active accounts as of August 2008,
representing about 20 percent of Cargill’s 2,000 total employees. While slower than expected, the
Cargill branch has steadily increased the number of accounts opened. The bank continues to
evaluate and develop approaches to make the Cargill operation a more profitable enterprise, but it is
satisfied that the branch has broken even in its first year of operation.
The bank attributes profitability challenges to a number of concurrent factors. The rapid turnover of
employees at Cargill results in a high number of closures within six months of account opening, as
employees end their relationship with the bank upon leaving the company. In addition, the majority
of accounts have low balances due to the prevalence of low-income workers living paycheck to
paycheck, and many employees still use a combination of financial service providers (such as check
cashers), depending on their immediate needs. These factors limit bank revenues from these new
accounts. Although account closures due to negative balances occur more frequently at the Cargill
branch than at the bank’s main location, the bank makes a concerted effort to collect charge-offs to
limit losses incurred.
Fort Morgan State Bank emphasizes that although these initiatives have not translated into profits in
the short term, serving this segment will have a significant, long-term effect on its bottom line
because providing banking services presents a clear value proposition to unbanked and underbanked
employees and will gradually build a strong customer base. By establishing a relationship with their
employer, the bank can also offer better flexibility and accommodation to customers by providing
quicker funds availability than from alternative financial providers. The bank prices its products and
services below that of alternative service providers as another competitive measure. In addition to
offering the same services available from check cashers, payday lenders, and other providers, the
bank also offers mechanisms for Cargill employees to enter the economic mainstream by providing
information and applications for its loan and credit products at the workplace branch. (Bank
employees can then transfer applications received at the workplace branch to the main branch for
approval and processing.) Fort Morgan State Bank observes that its partnership with Cargill has
increased traffic at the bank’s main branch, signifying that some of its Cargill customers have been
transitioning into more extensive banking relationships.
III. Lessons Learned
Offering banking services through their employers can be an effective approach to
serving unbanked individuals. Through employers, banks can access a pool of potential
customers with steady income and a specific set of financial needs, which allows banks to tailor
offerings accordingly. Banks can also leverage its relationship with an employer to build trust
with unbanked employees and improve its ability to establish customer relationships.
Building a customer base in the unbanked and underbanked population requires
patience and management of expectations. Profitability issues may challenge banks in the
short term, but raising financial awareness and developing customer relationships over time
eventually leads to long-term benefits to both banks and customers.
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Banks can more effectively compete with alternative service providers by becoming
knowledgeable about the unbanked segment and being willing to adapt and adjust in
accordance to their needs. Fort Morgan State Bank developed and refined its products,
pricing, and procedures as a conscious effort to challenge check cashing services and payday
lenders and to provide greater benefits and incentives to unbanked individuals. As a result, it has
gradually built a customer base both among unbanked Cargill employees and within the wider
community.
About Fort Morgan State Bank
Fort Morgan State Bank is a one-office institution located in the town of Fort Morgan in Morgan
County, Colorado. With $48.8 million in assets, the bank also operates six ATMs in its service area.
Fort Morgan State Bank focuses primarily on residential and commercial lending but has a welldiversified portfolio. Morgan Capital Corporation, a one-bank holding company, owns 100 percent
of the institution’s stock.
Assets, $Th, as of September 30, 2008: $50,994
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International Bank of Commerce
International Bank of Commerce (IBC) strives to improve access to banking services by providing
full-service, seven-day-a-week banking in grocery stores and shopping malls. IBC has reported
success with outreach efforts, particularly in the Hispanic community. The bank visits high schools,
vocational schools and colleges, workplaces, community-based organizations, and has two branch
locations that operate mock banking services as part of an educational program at elementary
schools.
“Each of the products we offer accomplishes a particular goal. Together, they help build awareness and trust in the
community.” - George E. Daves, First Vice President and Corporate Compliance Officer
I. Target Population
Serving the Mexican Community
International Bank of Commerce (IBC) serves a large and growing Mexican immigrant community.
In Laredo, Texas, where the bank’s main office and 17 of its branches are located, the local
community is bilingual and transacts business in English and Spanish. Communities in IBC’s other
markets share similar cultural and social characteristics to Laredo, and for this reason, many branch
employees of IBC are bilingual, and of Hispanic descent.
The cultural and demographic makeup of its service areas presents particular challenges for IBC.
First, the bank encounters mistrust of financial institutions within the Mexican immigrant
community. Branch employees use IBC’s community outreach efforts as opportunities to build trust
among the target population. Second, in some markets, such as Laredo and the Rio Grande Valley,
many members of the community operate primarily with cash due to the prevalence of lower wage
manual labor jobs. Workers often live paycheck to paycheck, so they need immediate access to
funds. On payday, workers proceed to their nearest check cashing business and are charged 1 to 3
percent of their check to obtain the funds to pay bills and buy groceries. IBC instead offers to cash
on-us checks free-of-charge for both customers and non-customers. Although non-customers
cannot cash checks not drawn on IBC, tellers encourage non-customers to open an account with
direct deposit so payroll can be accessed the morning of payday, rather than at the end of the day
when receiving paper checks. Free Check Card access is available at IBC’s ATMs, as well as pointof-sale locations.
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II. Initiatives
Free Banking Services
As part of its initiative to serve the unbanked and underbanked, in November of 1998 IBC’s
executive management decided to bundle a range of banking services and offer them free-of-charge,
making them accessible to individuals who have not had a banking relationship. IBC’s checking
account product, which is free for customers, includes access to free bill pay, online banking, ATM
use at all of its more than 400 ATMs, IBC Voice (a free 24/7 telephone banking service that allows
customers to check their account balance and the last ten deposits and checks written), and IBC
Mobile Banking. The program has been a successful strategy for serving the unbanked and
underbanked community.
Because IBC attracts individuals who come in to cash on-us checks, the bank has also trained and
mobilized its retail force to seek opportunities to establish banking relationships with noncustomers, promote the free services package, and to cross-sell other products to existing customers.
Micro-Community Program
In 1995, IBC partnered with an elementary school to provide resources and guidance for the
creation and operation of a student-run micro-community. This community’s economy operates on
a mock financial currency, “Cougar Cash.” Students elect public officials, apply for jobs, earn wages,
purchase goods, and pay taxes. The centerpiece of the micro-community is the on-campus IBC
bank, where students can open accounts, make deposits, write checks, balance checkbooks, and
withdraw their “Cougar Cash.” Trained by IBC employees, students run the micro-community’s
branch and determine the bank’s policies, operations, and procedures. At a young age, students gain
exposure to financial institutions and education on personal finance in addition to leadership skills
and responsibility. IBC’s strong relationship with the school has also provided opportunities for
outreach to parents, and branch employees have given financial education presentations to parents
at PTA meetings.
IBC has developed micro-communities in three other schools, with each establishing and following
its own curriculum. In the fall of 2008, IBC implemented a corporate-wide micro-community
initiative to expand the program to one micro-community in each of its 11 regions.
Education and Outreach
IBC offers a variety of education and outreach programs in its service areas.
Like its micro-community program, Money Buzz educates children about personal finance. The
bank conducts at least one free public seminar, which is based partly on FDIC Money Smart
modules, in every market at local branches and malls. During the Money Buzz seminar, branch
employees teach lessons on currency and the importance of savings. In addition, children learn
through hands-on exercises and receive beehive-shaped coin banks with which they can begin
saving. Money Buzz events attract good turnout and media attention that helps expose the
community to the financial institution and its services.
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In 2007, the bank conducted 30 FDIC Money Smart presentations. In addition, the bank sends
employees into the community and surrounding businesses to make personal contact, deliver
presentations to local employees about the benefits of banking services, and encourage account
opening. Customers must visit one of the bank’s branches to open an account. Branch employees
have found that these outreach programs have been successful in acquiring new customers. As of
July 2008, IBC has made 5,870 presentations to 28,492 local employees, many of whom were
unbanked or underbanked individuals.
Extended Hours and Convenient Branch Locations
In focus groups conducted by IBC every 12 to 18 months, participants commonly cite
“convenience” as the primary factor in determining which bank they select. To meet this need, in
1997, the bank launched seven-day banking in Laredo and McAllen, and customers responded
positively to the extended hours, citing the convenience of the branches being open longer and
more often. In markets where the bank has just recently expanded hours, branch employees have
noted that building awareness of the branch’s extended hours can be difficult. However, once
customers are accustomed to having banking services available seven days a week, use and retention
are very high.
Seven-day branches located in grocery stores, Wal-Mart stores, and shopping centers expand the
accessibility and convenience of IBC’s services. Customers who work late on weekdays can bank at
those store locations during the weekend. For unbanked and underbanked customers, these
locations also tend to be a more comfortable setting than the conventional brick-and-mortar
financial institution. Bank employees also help create a welcoming environment by informally
interacting and connecting with customers, walking the aisles of grocery stores, and offering to help
them bag groceries. Making these potential customers comfortable is a key to getting them to open
bank accounts.
Mobile ATMs
IBC operates four mobile ATMs that travel to different locations within its assessment areas,
including street festivals and county fairs. The service enables customers to withdraw cash free-ofcharge at the ATM van’s location. Some of the newer models have ATMs on both sides of the van
and are handicap accessible.
Mobile Banking
In June 2008, IBC introduced a free mobile banking service to help customers manage their finances
and prevent overdrafts. Customers register for the service online or by phone and receive alerts via
text message when their account balance falls below a specific amount determined by the customer.
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III. Lessons Learned
Employing bilingual staff who understand the challenges and complexities of a bicultural community improves the effectiveness and impact of the bank’s outreach to the
unbanked and underbanked. The bank uses education and outreach in a variety of forums,
such as schools and workplaces, to familiarize the community with the institution and the
benefits of developing a banking relationship.
Offering education and outreach along with a bundle of free banking services can
provide the unbanked with tools to enter and remain in the banking mainstream. When
equipped with available tools and timely account information provided by the bank, customers
can take full advantage of the bank’s products and services.
According to the bank’s research and experience, customers value the convenience of
extended hours and branch locations in grocery stores and malls. IBC accommodates the
needs of its customers by providing services when practical and where customers are most
comfortable. Once they become aware of and accustomed to these conveniences, the bank
reports success in achieving customer satisfaction and retention.
About IBC
IBC was founded in 1966 to meet the needs of the small businesses of Laredo, Texas. Since its
opening 40+ years ago, IBC has grown from less than $1 million in assets to $11.5 billion in assets.
IBC serves over 100 communities throughout Texas and Oklahoma with more than 260 branches
and over 400 ATMs. IBC is the largest minority-owned bank in the United States.
IBC's motto is “We Do More,” and it has opened full-service, seven-day-a-week banks in grocery
stores and shopping malls with the goal of improving customer access. IBC is a leader in delivering
post-North American Free Trade Agreement (NAFTA) banking services in Texas, with 30 percent
of the company's deposits coming from clients in northern Mexico. The bank strives to provide a
quality banking experience and environment for anyone who walks in the door, regardless of
whether they are a banked, unbanked, or underbanked individual.
Assets, $Th, as of September 30, 2008: $9,821,668
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Mitchell Bank
Mitchell Bank responded to changing demographics in its service area by establishing a branch,
branded as Cardinal Bank, in a high school located in a predominantly Latino neighborhood.
Cardinal Bank is a student-operated branch now open four days a week. Through this branch,
Mitchell Bank is able to successfully provide products and financial education to both students and
parents. Since it began, Cardinal Bank has opened more than 800 new accounts, of which 90 percent
are from unbanked households.
“In order for a product to be successful, you must remove the barriers that prevent the unbanked from becoming
customers.”- James P. Maloney, Chairman
I. Target Population
When an influx of immigrants from Mexico and Central America began moving into the bank’s
urban Milwaukee markets in the 1990s, Mitchell Bank decided to continue serving the area and
adapt by targeting its marketing and outreach efforts to the Latino community. The bank also
changed its focus to serve the unbanked and underbanked, the vast majority of whom were Latino.
This focus put the bank in direct competition with check cashers and payday lenders. According to
the 2000 Census, residents of Latino descent or origin comprise 75 percent of the population in
Mitchell Bank’s service area. The bank estimates that 50 percent to 60 percent of the population in
its service area is unbanked and 70 percent to 80 percent is underbanked, with alternative service
providers conducting the vast majority of financial transactions prior to Mitchell Bank’s involvement
in outreach.
The bank aims to position itself as the primary destination for all individuals seeking financial
services. With 50,000 residents within a two-square mile area surrounding the bank, the heavy
concentration of consumers and alternative service providers presents valuable opportunities for the
bank to understand and serve the market. Mitchell Bank identified the types of services offered by
alternative providers—such as check cashing, lending, and sale of bus passes and phones cards—and
tailored and augmented its services accordingly. By offering the services available from alternative
providers at lower cost, Mitchell Bank improved its ability to market and capture the business of the
unbanked and underbanked population. As of June 30, 2007 and for the past several years, the bank
has and maintains the largest deposit market share in its service area.
II. Initiatives
Outreach to Latino Community
Because the bank had little experience in working with the Latino community, bank management
and employees reached out to community groups and formed relationships with nonprofit
organizations, nongovernmental organizations, community organizations, politicians, and religious
leaders to determine what products and services community leaders believed the bank should offer
to best serve the Latino community. Community groups and representatives identified three primary
obstacles hindering the unbanked population’s relationship with financial institutions: 1) lack of
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trust, 2) identification and documentation issues, and 3) readily available access to alternative
financial service providers in a cash economy.
Based on this feedback, Mitchell Bank developed a targeted approach. The bank sought to create a
more inviting environment at its branches, both internally and externally. In addition to adorning
branches with Spanish-language banners promoting banking services, the bank also offered an open
invitation to the community, welcoming them to the bank, and displayed cultural symbols
important to many in the Latino community, including the bank's lobby shrine to the Virgen de
Guadalupe. The bank also hired a fully bilingual staff to remove language barriers.
The bank has found that once individuals recognize that the bank could offer the same services as
alternative financial service providers, and at a lower cost, they are generally more amenable to
exploring other banking products and services. Branch employees cross-sell products, provide faceto-face counseling, and explain how and why developing a banking relationship is a more beneficial,
cost-effective, and safer way to conduct financial transactions. For example, non-customers pay
higher fees for remittance services than customers, and after a non-customer uses the service once
or twice, bank staff will encourage them to open a small bank account, which allows them to pay
lower fees and eliminates restrictions on the amount of money they can send per transaction.
However, the bank understood that these initial changes alone were not enough to overcome the
community’s mistrust of financial institutions and held community meetings to determine other
ways to outreach and serve the needs of the Latino population.
Cardinal Bank
Introduced in 2000, Cardinal Bank is a full-service branch of Mitchell Bank located on the campus
of a local high school with a need for education in and exposure to personal finance and banking
services. The branch is operated by eight to ten students trained and supervised by Mitchell Bank
employees. Most of the school's students were earning money working in co-op programs with
employers or other part-time work. Many of the students used check cashers instead of banks to
cash their paychecks, so the school requested that Mitchell Bank open a branch at the school where
students could open deposit accounts. This allowed the bank to develop banking relationships with
students and staff at the school and also provided a point of entry to the rest of the community by
leveraging its partnership with the school. The community’s trust in the school and its
administration presented a valuable opportunity for the bank to build trust within the community.
Furthermore, Cardinal Bank’s physical location at the school created an atmosphere that was
viewed as less intimidating than that of traditional banks.
Through its presence at the school, Mitchell Bank teaches students about financial literacy and
reaches parents in a more amenable way than through conventional outreach methods. The bank is
in contact with the school’s administration on a regular basis to organize events and education
sessions for the community. The generational dynamics within immigrant families have also been an
important avenue for outreach to the unbanked, albeit indirectly. High school students from the
second generation tend to be more acclimated and acculturated than their first generation immigrant
parents and often become de facto financial advisors to their families. Equipped with education and
regular banking habits through their experience with Cardinal Bank, students encourage parents to
become part of the financial mainstream.
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During Cardinal Bank’s opening week, one student’s parent arrived at the branch with cash
wrapped in aluminum foil, which had been stored in the family’s freezer for safekeeping. Although
the parent wanted to open an account at Cardinal Bank, branch employees had to wait until the
money thawed before it could be deposited. This experience, and other similar observations,
exemplifies the need for banking services that can provide financial benefit and mitigate issues of
theft and safety for the Latino community.
In the eight years since Cardinal Bank’s inception, Mitchell Bank has opened more than 800
accounts for students and staff. Minors can open accounts without parental approval but are
restricted from debit card access. Once students graduate from high school, they can request an
upgrade to a regular checking product at Mitchell Bank’s office, which transfers the account to the
main bank rather than Cardinal Bank. The bank has not suffered any loss and is not aware of any
incidents of account misuse.
Identification and Documentation Assistance
In response to the obstacle of documentation requirements noted by community groups, Mitchell
Bank actively sought to assist individuals in the Latino community obtain forms of identification
that would allow them to open accounts and establish banking relationships. In 2003, the bank
began tackling this problem by providing Spanish-language brochures and conducting community
events to inform potential customers about ways to obtain identification. Potential customers who
did not have sufficient documentation for account opening were encouraged to obtain state-issued
identification since they were eligible for drivers’ licenses even without Social Security numbers
under state law.
Rather than turning away individuals who did not meet the bank’s identification requirements,
Mitchell Bank took initiative to help them obtain the identification they needed. The bank
communicated with the Department of Motor Vehicles (DMV) to confirm eligibility rules and
relayed information and provided relevant forms to customers. This program successfully addressed
a primary concern of the community and built awareness and trust in the institution. Mitchell Bank
continued the program until a new law was enacted in March 2007, which stipulated that Social
Security numbers were required in order to apply for state-issued identification.
Adapting to its market, Mitchell Bank also modified its own identification requirements for banking
services. The bank began accepting the Matrícula Consular card and sponsored the Mexican
Consulate to visit its Milwaukee location and issue Matrícula Consular cards. The event attracted
over 1,500 individuals to the branch, and many opened bank accounts during their visit. Mitchell
Bank was also one of the first financial institutions in the nation to become a certifying Individual
Tax Payer Identification Number (ITIN) acceptance agent. As an agent for IRS, the bank will
process an ITIN application, without charge, to allow individuals without a Social Security number
to open an interest-bearing account and pay their taxes. From 2003 through September 2008, the
bank processed over 3,200 ITIN applications, each representing a new account for a formerly
unbanked consumer. Offering these services to the community has been critical to bring unbanked
individuals into the banking system.
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Remittances
Mitchell Bank participates in Appleseed’s Fair Exchange program,12 and since 2005 the bank has
been and remains the largest volume user of Directo á Mexico,13 in the nation. The bank prides itself
on its transparency and disclosure practices, particularly due to the prevalence of hidden fees and
high rates among alternative service providers. On a daily basis, the bank posts foreign exchange
rates for all of its products and that of its competitors in branch lobbies, which informs customers
of how much money their family will receive upon transfer and allows them to comparison shop for
the most favorable product and provider. The bank’s transparency has been well-received, and the
community has appreciated that the bank provides information on fees, charges, and rates upfront.
Small Dollar Loan Program
Mitchell Bank participates in the FDIC’s Small Dollar Loan Program Pilot Program.14 Initially, the
bank limited its Small Dollar Loan product to customers with at least a six-month relationship with
Mitchell Bank due to concerns regarding the customer’s ability to repay and lack of collateral.
However, the institution recently decided to begin a pilot program that will offer small dollar loans
to ITIN borrowers and non-customers in order to increase volume and exposure in the market. To
mitigate its increased risk, the bank reduced the size of the loan to non-customers and ITIN
borrowers from $1000 to $500. This change has provided new marketing avenues and the bank has
experienced an increase in loan inquires and activity.
III. Lessons Learned
The bank employed an effective and informative strategy for determining how to best
serve the unbanked and underbanked by asking community members and organizations
for their insight on the types of products needed and how the bank should provide these
offerings. Mitchell Bank also gained immediate acceptance from the community because the
bank demonstrated a willingness to listen, modify their offerings, and execute successfully.
Once the bank gained the community’s trust, customers became more willing to open
depository accounts and develop deeper banking relationships. The bank is able to
leverage this trust as an opportunity to suggest other ways to conduct financial transactions that
are more affordable, safer, and effective. Employing a knowledgeable bilingual staff has helped
the bank become a source of information for banking products, guidance, identification
assistance, and financial management to the community.
In 2007, Appleseed, a national legacy advocacy organization, partnered with financial institutions to develop a “Fair Exchange” brand that designates
services that voluntarily disclose all fees, exchange rates, and other services that enable consumers to make informed decisions. Consumers can then
identify the most favorable remittance fees and exchange rates and participating institutions who present clear, up-front information on their
remittance products are rewarded for their transparency with greater market share.
12
“Directo a México” is a payment system established by the Federal Reserve and Banco de México that enables consumers to transfer funds from a
bank account in the United States to any bank account in Mexico.
13
Key features of the FDIC Small Dollar Loan Pilot Program may include: loan amounts up to $1,000, amortization periods longer than a single pay
cycle and up to 36 months for closed-end credit or minimum payments that reduce principle (that do not result in negative amortization) for openend credit, no prepayment penalties, origination and/or maintenance fees limited to the amount necessary to cover actual costs, and an automatic
savings component. (See: http://www.fdic.gov/smalldollarloans/index.html.)
14
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Continually evaluating and developing products and services enables the bank to meet
the changing needs of its market. Despite its success in outreach to the unbanked and
underbanked, Mitchell Bank seeks new and better ways to serve the community, learning
constantly from its past experiences and those of other institutions.
About Mitchell Bank
Founded in 1907, Mitchell Bank is an $81.8 million family-owned community bank that is wholly
owned by Mitchell Bank Holding Company, a one-bank holding company located in Milwaukee,
Wisconsin. The bank operates out of 11 banking offices in Milwaukee County and Waukesha
County. Mitchell Bank is at the forefront of the push to reach Latino communities and is a leader in
reaching unbanked individuals.
Assets, $Th, as of September 30, 2008: $78,750
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Monroe Bank & Trust
Monroe Bank & Trust has developed a strong community presence in its service area through its
extensive employee volunteer program, which assists over 100 nonprofit organizations in its local
market. By leveraging relationships with local agencies and community organizations, the bank is
currently expanding its education and outreach efforts to include financial education programs
delivered in neighborhoods with high unbanked populations and a “Learning Bank” to provide
financial literacy training for low-income individuals. In addition, the bank offers a transitional,
second chance deposit account, Opportunity Checking, for customers ineligible for standard
checking accounts.
“Being a publicly conscious organization has motivated us to expand and tailor our education and outreach efforts and
to offer a targeted product for the unbanked.” – H. Douglas Chaffin, President and CEO
I. Target Population
Monroe Bank & Trust’s primary service area is Monroe County, Michigan, where 20 of its branches
are located. The bank also has five additional branches in Wayne County. Some of these branches
serve low- to moderate-income Census tracts, where minorities represent a significant portion of the
population; in one specific zone known as Orchard East, African Americans represent 31 percent
and a growing Hispanic community represents 5.2 percent, according to 2000 Census tract data.
The bank cites local economic and employment issues as main drivers for population trends, and
long-time residents have begun leaving the area in response to rising unemployment and plant
closings in the automobile industry.
II. Initiatives
Volunteer Organization: ENLIST
To encourage bank employees to serve their local communities, Monroe Bank & Trust established
Employees Now Linked in Service Together (ENLIST), a unique bank-sponsored volunteer
organization that rewards employees with additional time-off for participation. For every 25 hours
employees volunteer for bank-approved projects in the community, they receive one vacation day up
to a maximum of five days per year. Currently, out of the bank’s 380 total employees, 300 participate
in ENLIST and volunteer their time assisting about 100 different nonprofit agencies for a total of
approximately 9,000 man hours annually.
Monroe Bank & Trust leverages its strong community relationships to develop, refine, and validate
its approaches. Community leaders have identified financial literacy as a primary need in low- to
moderate-income areas, and in response, the bank has made financial education a priority in its
efforts to serve the unbanked and underbanked. For many years, the bank has provided educational
sessions on basic banking, home ownership and mortgage products, and savings programs both at
the bank and through outreach programs at high schools, employer sites, public events, and
community organizations, either on a scheduled or ad hoc basis.
As an extension of ENLIST, Monroe Bank & Trust is currently developing MBTeach, a financial
literacy program that would provide similar incentives for bank employees to volunteer. Designed as
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a formalized approach to the bank’s existing educational outreach programs, bank employees
participating in MBTeach will deliver seminars based on the FDIC Money Smart curriculum in
market areas where such programs would be most valuable, such as faith-based organizations,
service agencies, and high schools in low- to moderate-income Census tracts. Topics will expand
upon those covered in previously offered seminars, such as basic banking, mortgages, and first-time
home purchases.
In addition, the bank is working with local agencies, city officials, community centers, and a
community college, to convert a former branch facility into a “Learning Bank,” which will offer
adult continuing education courses, including financial literacy training, for low-income residents.
The “Learning Bank” will also serve as a platform for marketing the bank’s entry-level checking
product, which is described in greater detail below. Monroe Bank & Trust reports receiving support
and positive feedback from the community throughout the developmental and planning stages, and
plans to launch the center in 2009.
Bank at Work
Branch managers leverage their close ties to commercial and business customers in the community
to deliver education and services to employees, at the employer’s request or via the bank’s initiative.
On occasion, Monroe Bank & Trust sends branch employees to facilitate Bank at Work programs
at employer sites where they conduct informational sessions, market relevant products to employees,
and open accounts on-site. Bank employees observe that Bank at Work programs have been
somewhat successful in initiating new customer relationships; however, statistics have not been
systematically tracked.
Opportunity Checking
After attending presentations on entry-level and second chance deposit accounts, Monroe Bank &
Trust decided to design their own formal checking product for unbanked and underbanked
customers seeking to enter the economic mainstream. The bank launched its Opportunity
Checking product in January 2008. At the discretion of branch managers, Opportunity Checking
may be offered to customers, who would otherwise have been automatically rejected based on
ChexSystems, as a stepping stone in transitioning to a more traditional checking account.
Restrictions placed on these accounts include no overdraft privileges, no deposit transactions
through ATM or debit cards, $10 monthly service fee, and $300 maximum ATM withdrawal. After
12 months, customers exhibiting proper account management can request an upgrade to the bank’s
standard checking product.
As of August 2008, the bank has 28 active Opportunity Checking accounts. While the bank does
not engage in advertising this second chance checking product, branch employees are expected to
determine customer needs and refer products, such as Opportunity Checking, when appropriate.
The bank also seeks to expand customer acquisition through its planned educational outreach efforts
in unbanked and underbanked communities.
III. Lessons Learned
Strong relationships with community leaders and organizations can help banks build
trust among unbanked populations and maximize the impact of their outreach efforts.
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In response to feedback from community leadership, the bank expanded and formalized its
financial education offerings and is developing a financial literacy training center specifically for
low-income residents. These educational efforts have been developed and will be delivered in
close partnership with community organizations, which the bank believes will improve their
effectiveness and reach among unbanked populations.
Banks must develop broad and varied strategies to reach out and deliver education and
services in the neighborhoods where unbanked and underserved consumers reside and
frequent. Banks cannot expect to successfully outreach these individuals by utilizing a single
approach or single location. Instead, a variety of outreach and educational approaches adapted to
the community can enable banks to deliver information and services relevant to specific
segments of unbanked populations and be more effective in encouraging them to establish
banking relationships. A product like Opportunity Checking in the bank’s product portfolio
can help unbanked individuals ease back into the banking system.
About Monroe Bank & Trust
Monroe Bank & Trust is a commercial bank headquartered in Monroe, Michigan. It is wholly owned
by MBT Financial Corporation, a one-bank holding company also located in Monroe, Michigan.
Monroe Bank & Trust opened a mortgage subsidiary, MBT Credit Company, Inc. on February 25,
2002. MBT Credit Company, Inc. is 100 percent owned by the bank. Monroe Bank & Trust operates
25 full-service offices and 41 ATMs.
Monroe Bank & Trust’s customer base consists primarily of consumer and residential borrowers and
area small- and medium-sized businesses. The bank’s primary business strategy is that of a
“community bank” with a primary business focus on residential real estate mortgages and small
business lending. All branches offer full lines of deposit products and loans, such as commercial
loans, mortgage and home improvement loans, lines of credit, and consumer installment loans. The
bank is also active in the secondary mortgage market through the sale of qualified residential real
estate mortgages with its mortgage subsidiary MBT Credit Company, Inc.
Assets, $Th, as of September 30, 2008: $1,504,721
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Banks’ Efforts to Address Obstacles and Access
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
•
•
Retail Branch Information
•
Account Opening &
Onboarding
Services Provided to NonCustomers
321
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other lowcost accounts, products and
services used by the
un/underbanked.
• Deposit Products
• Savings Accounts
• Payment Products
• Credit Products
Case Studies
Obstacles and Access
The four case study banks highlighted in this section utilize a variety of approaches to mitigate
barriers and overcome obstacles faced by unbanked and underbanked individuals in their service
areas.
Institution
Target Population
Initiative
Bangor Savings Bank
(Bangor, ME)
Low- to moderate-income
individuals in primarily rural
areas
Mitigates geographic barriers and improves accessibility of
banking services by offering extended service hours,
account access via Web and telephone, and full refunds on
surcharges incurred when using any bank’s ATM
Citizens Union Bank
of Shelbyville
(Shelbyville, KY)
Hispanic community in
Kentucky MSAs
Opened Hispanic-focused branch, Nuestro Banco, which
accommodates customers by employing bilingual staff,
operating during non-traditional hours, and adopting a
more casual and culturally-sensitive environment
Ridgewood Savings Bank
(Ridgewood, NY)
Diverse immigrant and retiree
populations in Queens and
Bronx boroughs of New York
City
Hires bilingual staff, publishes bilingual marketing
materials, and advertises in local ethnic newspapers
according to demographics of each branch’s market area;
provides full range of banking services in mobile branch
that regularly visits elderly communities and other
locations with limited access to branches
Second Federal Saving
(Chicago, IL)
Mexican immigrant and
Mexican-American population
in Chicago’s South Side
Helps undocumented individuals obtain identification
required to open accounts by sponsoring visits by the
Mexican Consulate to issue Matrícula Consular cards at the
bank and by becoming an Individual Taxpayer
Identification Number (ITIN) acceptance agent
Common Lessons Learned
Recognize changes in customer demographics, assess obstacles in your market, and address them accordingly.
Offering banking services in a less formal setting or more convenient location can help the unbanked and underbanked
feel more comfortable with financial institutions.
Providing greater and more varied means of access (e.g., extended hours, web/phone access) also encourages
unbanked and underbanked individuals to become customers.
Bank employees play an important role in welcoming unbanked customers and making them feel at ease by assuaging
misperceptions about banks, showing sensitivity to their needs, and communicating in their native languages.
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Bangor Savings Bank
Bangor Savings Bank has developed a business model that encourages inclusion, lowers barriers for
developing customer relationships, and provides opportunities to help unbanked and underbanked
individuals enter the mainstream banking system. In particular, the bank focuses on providing its
regular products with greater accessibility and improved service as part of a sustainable model for
outreach and inclusion.
“Overcoming the barriers of time, geography, and access and connecting customers to today’s economy are essential to
the prosperity of our communities and the sustainability and growth of our institution.”
- John Moore, Senior Vice President of Community Development Lending
I. Target Population
Bangor Savings Bank serves more than 125,000 households across Maine, representing about 20
percent of the state. The bank’s geographic service area incorporates the State of Maine including
three metropolitan statistical areas: Bangor, Lewiston- Auburn, and Portland. However, most of the
16 Maine counties represented are rural, characterized by economies based on natural resources and
modest household incomes. The bank notes that while the state reports low- to moderate-income
overall, rural communities typically exhibit incomes lower than the state average, with many
unbanked and underbanked residents within that demographic. Furthermore, rising energy costs and
an aging population have had a notable effect on the state’s economy and the financial situation of
its residents. Unbanked and underbanked individuals served by the bank include clients served by
social service programs, youth, Native Americans, and other low-income individuals.
II. Initiatives
Increased Accessibility
Given its rural customer base, Bangor Savings Bank has sought to mitigate geographic barriers and
other customer considerations, such as disabilities or nontraditional working hours, by offering
multiple methods of access to the bank and its services free-of-charge. Bangor Savings Bank
emphasizes that its customers need not visit one of its bank branches in order to access their funds.
Nevertheless, for customers who prefer face-to-face interaction, branches in certain markets have
extended hours up to 60 hours per week, open from 7:30 a.m. to 5:30 p.m. on weekdays and until
5:30 p.m. on Saturdays to accommodate commuters and full-time workers. The bank also offers the
option of free ATM banking and drive-up windows at most retail branch locations.
The bank has found that offering account access through electronic banking services is an important
tool for providing services to customers and for encouraging unbanked and underbanked individuals
to become customers. Bangor Savings Bank reports that electronic banking, specifically direct
deposit, promotes savings because customers can allocate and deposit a portion of their paycheck
into a savings account before they receive the money in a tangible form. This capability is
particularly important for individuals of low- to moderate-income who are less likely to save on a
regular basis, as it helps them easily create a personal savings plan that requires minimal effort.
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To further facilitate access, the bank offers free ATM access anywhere in the world. Not only does
Bangor Savings Bank not charge fees to customers who use other bank ATMs, it refunds surcharges
assessed by the other banks. Free ATM services are available to all customers, with no limitation on
type of account, frequency of use, or amount of ATM fees. Customers can use banking services
where it is most convenient for them without having to visit a Bangor Savings Bank branch or
ATM. The bank incurs costs of over $1 million per year to support this service.
The bank also regards its Web portal as an “electronic branch” where customers can obtain
information and access services. Online capabilities are available free-of-charge to all customers and
include bill payment, credit approval, and consumer and mortgage information. The bank has found
that retired customers, in particular, have benefited from online access, citing that it allows them to
stay connected while using contemporary banking services.
Automated phone services are available toll-free 24 hours a day and enable customers without access
to online banking to conduct basic banking transactions and inquiries, such as transferring funds and
checking balances. For customers in need of more personalized service, a voice-to-voice phone call
connects them directly to a customer service representative who can provide live assistance for their
banking needs six days a week. The bank has found that phone-accessible services are particularly
helpful for customers with disabilities or geographic limitations.
Reducing Overdrafts and Fees
The bank also emphasizes its efforts to lower barriers through its business practices and customer
service, rather than offering specialized products, as a way to respectfully and purposefully
encourage unbanked individuals to develop a customer relationship. For example, the bank
encourages direct deposit by offering a no-service-charge checking account. In total, Bangor Savings
Bank provides direct deposit and free online banking to 70,000 Social Security and SSI recipients.
Bangor Savings Bank offers products and services to help minimize overdrafts, which is a common
obstacle for unbanked and underbanked individuals. Overdraft protection programs include
StandBy Money Line of Credit, which offers up to $1,000 to cover overdrafts, and Savings
Account Link, which automatically transfers funds from savings accounts to cover the overdraft
amount. The Bank also offers No Return Benefit (NRB), a courtesy overdraft program that allows
customers to pay checks in excess of their balance up to a predetermined limit. The bank also
systematically identifies accounts with excessive overdrafts in order to provide personal coaching
and improve financial management. Customers can also enroll in a Fresh Start Program to repay
their overdraft balances, which allows them to maintain checking account privileges while receiving
coaching from a bank employee.
Observing that competing banks may process items in order of largest to smallest check amounts,
Bangor Savings Bank elects to pay checks sequentially, in the order in which they were written. The
bank believes that ordering checks paid by amount can create more overdraft situations and cause
overdraft fees to be incurred on more checks. By using a sequential order, the bank hopes to reduce
the number of bounced checks and respect the intent of the customer.
Benefit Checking
Benefit Checking is an entry-level account geared to students and customers who tend to maintain
lower balance or earn lower incomes. For this product, the bank lowered the opening deposit
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requirement from $100 to $25, and waived minimum balance restrictions, service charges, and
monthly fees. However, Benefit Checking customers still have access to all of the same services
and methods of access, including online banking and billpay, as other Bangor Savings Bank
customers. The bank cites this product as one way in which it lowers financial obstacles that prohibit
unbanked and underbanked individuals from opening an account.
Bangor Workplace Advantage
As part of its outreach efforts, the bank offers Bangor Workplace Advantage to employees of its
business customers, bringing information, education, and banking services to the workplace. For
employees who do not have an existing banking relationship with Bangor Savings Bank, the bank
offers to open a free Benefit Plus Checking (i.e., premium NOW account) account on-site and
provides the initial $25 required as an opening deposit. Customers benefit from direct deposit of
their paychecks. The bank reports that since the program’s inception, more than 175 workplace
outreach efforts have been conducted resulting in nearly 600 new accounts. Employees realize that
they qualify for an account and can becoming a banking customer.
Individual Development Accounts (IDA)
Bangor Savings Bank partners with other organizations in Maine that provide financial literacy and
career development training. Through relationships with local community groups, foundations, and
nonprofit organizations, the bank initiates, sponsors, and runs the IDA program. This provides
another opportunity for these organizations to assist their clients. In turn, the bank gains a foothold
in the community as a trusted partner and service provider for both the organization and for
unbanked individuals.
The bank’s IDA programs span a variety of target groups. The Maine Youth Opportunities initiative
focuses on adolescents in foster care and provides them with access to checking accounts, free
ATM, and online banking services. The Jobs for Maine Graduates organization incorporates Bangor
Savings Bank’s IDA into its financial literacy and career development program. Aspiring first-time
home owners can also participate in the IDA program through local community organizations.
Partnerships with Third-Party Organizations
Community outreach efforts are primarily delivered through third-party organizations that already
have relationships and connections with a particular population segment. The community groups
include Coastal Enterprises Inc., Women Work & Community, Four Directions Development
Corporation, and Jobs for Maine Graduates. As part of the bank’s relationships with these
organizations, bank employees support and participate in the community group’s educational
outreach programs. In turn, the organizations inform and encourage their clients to bank with
Bangor Savings Bank, which then becomes the face of the banking industry for these groups.
Bangor Savings Bank opens several hundred accounts annually as a result of community outreach
efforts through third-party partnerships.
Bangor Savings Bank also helps nonprofit organizations operate their programs by providing
technical assistance and financial services to streamline and manage their operations. For example,
the bank set up a cash management system for an organization that provides financial literacy
training and matched savings for youth receiving foster care services. The system includes ACH
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origination capacity that allows the organization to efficiently send out electronic stipends to
participants at any financial institution statewide instead of writing a high volume of small checks.
As a result, funds can be easily moved, tracked, and recorded from the organization to program
participants. By utilizing electronic banking services to optimize efficiency, nonprofit organizations
can improve their ability to serve a broader rural geography. Bangor Savings Bank regards this as a
sustainable approach since it helps community organizations increase their client base and provides
the bank with more opportunities to build customer relationships with unbanked and underbanked
individuals.
Needs assessment and feedback from nonprofit community partners have also resulted in the bank
developing new services to improve access. For example, the bank is working to provide and
coordinate multiple language translation and interpretive services and provide support for both
hearing impaired and visually impaired customers.
III. Lessons Learned
Providing greater and more varied means of access to dispersed, rural communities
encourage unbanked and underbanked individuals to become customers. The bank has
expanded branch hours, free ATM, free Electronic Benefits Transfer (EBT) ATM access, free
online banking, and services via Web and telephone to overcome common barriers for using
banking services and to improve convenience and comfort level to potential customers.
Implementing business strategies that bring value to the unbanked and underbanked
is integral to the bank’s ability to grow and sustain its customer base. Increased
accessibility and improved banking products and services not only serve the unbanked and
underbanked, but also the bank’s entire customer base. Furthermore, the bank views this as a
more respectful and effective approach to bringing unbanked individuals into the economic
mainstream.
Forming mutually beneficial partnerships with nonprofit organizations promotes a
sustainable business model for serving unbanked and underbanked individuals. The
bank leverages established organizations’ connection and presence in the community to
maximize the effectiveness of its outreach efforts. Its nonprofit partners, on the other hand,
benefit from improved operational efficiency through the bank’s technical assistance and
financial services.
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About Bangor Savings Bank
Bangor Savings Bank, headquartered in Bangor, Maine, is a $2.3 billion retail financial institution
that operates as a state mutual savings bank. It offers retail banking and trust services to Maine
consumers as well as large commercial, corporate, and small business banking services to Maine
businesses at its 51 deposit branches. Established in 1852, the institution expanded its service area
throughout the state through mergers with regional banks and acquisition of offices. In its most
recent FDIC CRA Public Performance Evaluation, the bank received the highest possible
“Outstanding” rating.
Assets, $Th, as of September 30, 2008: $2,318,810
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Citizens Union Bank of Shelbyville
In July 2007, Citizens Union Bank opened a branch called Nuestro Banco (“Our Bank”), a Division
of Citizens Union Bank, to target the Hispanic community. A major component of their strategy to
reach the Hispanic market is its branch configuration. Nuestro Banco provides a welcoming
environment to enhance the banking experience. It competes with small check cashers and large
payday lenders. Citizens Union Bank also offers two affordable small dollar loan programs and
provides extensive outreach to underserved populations.
“The more we learn about our market, the more we try to reach out and cater to their needs. It’s a good business
decision to do this, but more importantly, as an organization we believe it is the right thing to do.”
- Kimberly Davis, First Vice President
I. Target Population
Serving the Hispanic Community
In 2004, the bank started seeking better ways to serve its local Hispanic population and has
significantly expanded its efforts in recent years. This effort came about, in part, due to observations
by bank employees suggesting that members of the Hispanic community in Shelbyville, Kentucky,
used high-cost alternative financial service providers, such as check cashers, and obtained financing
through used car dealerships. In addition, a review of local population trends by the bank revealed
that the Hispanic community was the largest unbanked demographic in its service area. Armed with
this information, bank staff took the initiative to develop specific outreach strategies to address the
financial product and service needs within Shelbyville’s Hispanic community. After three years, the
bank decided to expand its efforts beyond Shelbyville, beginning with Louisville. Today, Citizens
Union Bank has Hispanic-targeted outreach strategies across its 20 branches.
The bank also recognizes that Hispanics are not the only populations that are unbanked and
underbanked within its service area. To become more inclusive in their outreach efforts, the bank
has included additional programs that address the diverse needs of the wider community, including
African Americans, single parents, U.S. military personnel, and any other unbanked and
underbanked residents.
II. Initiatives
Nuestro Banco
In July 2007, Citizens Union Bank opened the first known Hispanic-focused branch in Kentucky.
The branch, Nuestro Banco, a Division of Citizens Union Bank, is completely bilingual; employees
answer telephones in Spanish. Operating hours differ from that of other branches, staying open until
7:00 p.m. on Friday and from 9:00 a.m. to noon on Saturday. In addition, Citizens Union Bank paid
attention and care to the physical aspects of Nuestro Banco, which looks markedly different than
Citizens Union Bank’s other branches. With the help of its Hispanic employees, the bank decorated
Nuestro Banco with familiar cultural objects and a traditional color scheme to create a casual and
welcoming environment for its customers.
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The bank introduced new banking products that were responsive to the banking needs of the
Hispanic community. Aware that some in the Hispanic community are unable to open accounts
because of the lack of traditional identification, the bank offers check cashing services as an
alternative. If the bank can verify the check presented, non-customers can cash the check at a lower
fee than at local check cashers. If an individual opens or already has a bank account, they can utilize
Directo a México, in which Citizens Union Bank is enrolled, to send money.15 Using Directo a
México, customers can transfer money from their bank account to that of their relatives in Mexico
at a better exchange rate than elsewhere in the community and for a smaller fee ($2.50 to transfer
less than $400, and 2.5 percent for amounts above $400).
Due to the range of valuable services provided to the Hispanic community, Nuestro Banco has
succeeded in opening more new accounts than any other branch in the Citizen Union Bank’s
network since its opening. The branch averages 65 account openings per month, totaling 1,861
checking and savings accounts through June 2008. Only three accounts have been closed in the 11
months since the branch’s opening.
Education and Outreach
To increase the reach of its financial education programs, Citizens Union Bank partners with
community organizations, including local churches, Catholic Charities, the Kentucky Council on
Economic Education, Centro Latino, the Housing Partnership, and Kentucky Housing. Bank
employees meet with community organizers to determine how the bank’s programs can best meet
the needs of its organization’s members. Bank employees help the organizations determine which
classes from the FDIC Money Smart curriculum the bank offers. Financial education sessions are
frequently held off-site to encourage attendance in a more comfortable setting. In addition to
education, the bank also conducts extensive outreach efforts in the communities it serves to
promote account opening and offers to open accounts off-site.
Financial education programs are well-attended, with classes normally attracting 12 to 20 people.
Some classes, such as one geared to school teachers seeking guidance on how to educate students on
personal finance, has attracted nearly 400 attendees. The bank found that the FDIC Money Smart
program works well because it provides all materials needed to teach the course. Attendees receive
handouts and participate in a Q&A session at the conclusion of the class.
Organizing these financial education programs is a joint effort between the bank and local
community organizations. While the bank often reaches out to organizations to offer its services and
programs, community members also take initiative to request help from the bank. For example,
customers may come into the branch to inquire about a local event that would benefit from a
financial education session, or community members may approach branch personnel during other
events, such as community fairs. To gain further insight into the needs of different constituencies
within the community on how to tailor the bank’s education programs, the bank works closely with
members of both the bank’s Hispanic Advisory Council and the African-American Advisory
Council.
15 Directo a México is a payment system established by the Federal Reserve and Banco de México that enables consumers to transfer funds from a bank
account in the United States to any bank account in Mexico.
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Secured Checking Account
In February 2003, Citizens Union Bank of Shelbyville began offering Secured Checking Accounts
to help people who have mismanaged past accounts or are in ChexSystems re-establish themselves
in the banking mainstream. Working in tandem with branch personnel for counseling and education,
customers must demonstrate an intention and willingness to work toward restoring a good history.
With cash or direct deposit of $100 and a $10 monthly service charge, they can open a Secured
Checking Account that allows unlimited transactions, no minimum balance, access to a Citizens
Union Bank Check Card, and free internet banking. However, the account does not allow online bill
pay or check writing. After six months in Secured Checking, customers can transition to Freedom
Checking Accounts, the bank’s regular checking account product. Secured Checking provides a
valuable opportunity to bring customers back to creditworthy standing. As of June 2008, the bank
had 185 Secured Checking Accounts outstanding.
Fresh Start Program
If a customer continually has a negative balance, they can transition to Fresh Start, a repayment
program for overdrafts on accounts. Customers usually request assistance to correct their account,
and after review, branch personnel may refer them to the program. Payments are made over the
course of six months on a monthly, semi-monthly, bi-weekly, or weekly basis, depending on
customer preference. At any time, customers can pay the remaining balance. Fresh Start does not
charge fees or interest, so the customer pays only the principal balance due while their account
remains open and active. The bank currently has 322 active accounts in Fresh Start.
Neither Secured Checking nor Fresh Start is actively marketed by the bank. Instead, customers
are informed of the programs’ availability by employees when they come in to open an account or
are referred on a case-by-case basis.
FDIC Small Dollar Loan Pilot Program
Citizens Union Bank has been selected to participate in the FDIC’s Small Dollar Loan Pilot
Program, a project intended to identify ways in which banks can incorporate affordable, small dollar
loans into their menu of banking services.16 As part of this program, the bank designed Payday
Alternative Loans (PAL) around the FDIC’s affordable small dollar loan guidelines. These loans
are available for customers looking for smaller loans but who do not qualify for regular loans. PAL
allows first-time borrowers to borrow $300 to $600, which is repaid over the course of six months.
Each customer can receive a maximum of three loans per year but can only have one PAL
outstanding at a time. The bank takes borrowers through counseling prior to getting the loan, but if
a borrower exhibits a pattern of continual mismanagement, branch personnel will offer financial
education and one-on-one budget counseling. Since the program’s launch in June 2007, the bank has
closed one PAL.
Key features of the FDIC Small Dollar Loan Pilot Program may include: loan amounts up to $1,000, amortization periods longer than a single pay
cycle and up to 36 months for closed-end credit or minimum payments that reduce principle (that do not result in negative amortization) for openend credit, no prepayment penalties, origination and/or maintenance fees limited to the amount necessary to cover actual costs, and an automatic
savings component. (For more information, see: http://www.fdic.gov/smalldollarloans/index.html.)
16
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Outreach to Military Personnel
In May 2007, Citizens Union Bank acquired Fort Knox National Bank, now rebranded Fort Knox
Bank, a Division of Citizens Union Bank. Seeking opportunities to serve members of the military at Fort
Knox, the bank has begun offering small PALs at the branch. They have also created the Hero
Rewards Account, designed specifically for members of the military. This interest-bearing checking
account requires no minimum opening deposit, offers unlimited rebates on other bank’s ATM fees,
provides direct deposit from Defense Finance and Accounting Service (DFAS) payroll accounts, and
charges a $5 fee for balances below $100. As of June 10, 2008, the bank has opened 814 Hero
Rewards Accounts.
Financial Counseling for Mortgage Programs
The bank offers mortgage programs to help otherwise ineligible homebuyers become qualified for
home loans. Through a series of step-by-step educational programs, the bank provides applicants
with vital information on how to handle loan products while assuring the bank that applicants
possess the necessary financial understanding when considering their mortgage applications.
The bank has also begun a pilot program which offers financial counseling to single parents seeking
to become eligible for a home owner’s loan. As of June 2008, four single mothers have participated
in the pilot program’s financial counseling program to qualify them to become homebuyers, and
eight more applications to the counseling program are in progress.
Regulatory Challenges
Because the bank serves a community that includes a sizeable population of undocumented
residents, bank employees face some challenges in providing the community with valuable financial
services while continuing to respect the regulatory considerations and sensitivities involved. In
accordance with the Bank Secrecy Act (BSA) and the U.S. Patriot Act, particularly the Customer
Identification Program (CIP), the bank follows strict guidelines for identification and verification of
potential customers. However, the bank recognizes the variety of identification types that exist and
accepts Matrícula Consular cards, foreign government identifications, and Individual Taxpayer
Identification Number (ITIN), in addition to more traditional forms of identification, for account
opening. Citizens Union Bank also partners with its local consulates to help potential customers
obtain Matrícula Consular cards and has sponsored consulate visits to the bank.
Citizens Union Bank has also become an ITIN Acceptance Agent to help customers without Social
Security numbers obtain an ITIN. Once customers have opened an interest-bearing account, they
can obtain an ITIN through the bank without paying a fee for the service.
III. Lessons Learned
Having bilingual employees has been the lynchpin of the bank’s success. Regardless of
the products and services a bank has to offer, the ability to connect with the community and
speak to them determines how well the products are received, understood, and handled.
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Offering banking services in a more casual or convenient setting can help the
unbanked and underbanked feel more comfortable using banking services. In addition
to the specially designed and decorated Nuestro Banco, the bank also has a branch at a local
Wal-Mart store in Shelbyville, which is a more convenient and comfortable setting to reach out
to the unbanked and underbanked. The bank is also rebranding one of their current branch
locations as a Citizens Union Bank and a Nuestro Banco, a Division of Citizens Union Bank.
Working with businesses and employers can present more opportunities to learn
about, outreach, and cater to the needs of the community. The bank’s next area of focus
is to work with local Hispanic businesses to help them with their unique funding needs and
those of their employees. This will enable the bank to gain further traction and trust within the
community and utilize another outlet to provide education and information.
About Citizens Union Bank of Shelbyville
Citizens Union Bank of Shelbyville is a $764 million financial institution headquartered in
Shelbyville, Kentucky, a community of 10,085. The institution presently operates from 20 offices in
seven counties throughout the Commonwealth of Kentucky, and is currently constructing its 21st
location in another county. Additionally, the bank operates 19 ATMs throughout its service area.
The bank’s primary lending focus is construction, home mortgage, and commercial.
Assets, $Th, as of September 30, 2008: $595,124
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Ridgewood Savings Bank
Ridgewood Savings Bank’s approach to serving unbanked and underbanked communities focuses
on increasing access to banking services and conducting outreach and education. Since 2006, the
bank has opened two branches in Bronx neighborhoods with significant populations of unbanked
and underbanked residents. In May 2005, Ridgewood launched a full-service mobile branch that
brings banking services to people and places that otherwise would not have them, such as assisted
living facilities. In addition, the bank offers an array of educational programs targeting first-time
homebuyers, low-income residents, and students.
“Our decisions are driven by a mutual philosophy to do what is right for our customers and community.”
– Edward F. O’ Brien, Vice President and CRA Officer
I. Target Population
Until mid-2006, Ridgewood Savings Bank had 23 branches, all located on geographic Long Island
(Brooklyn, Queens, Nassau, and Suffolk counties). As a result of long-range strategic planning,
increased lending, and business opportunities, the footprint of the bank has expanded as of early
2008. Specifically, the bank now has 36 branches spread among seven counties, including the
additional Manhattan, Bronx, and Westchester branches.
These changes required the bank to be proactive in its efforts to address the underbanked and
unbanked. Ridgewood has always been sensitive to diversity since their service area included ethnic
communities of African, African-American, Chinese, Croatian, German, Hispanic, Italian, Polish,
and Romanian, Russian and Serbian immigrants. In consideration of the aforementioned expansion,
the bank broadened its innovative approach via the strategies and initiatives described below, paying
special attention to the Bronx, whose residents are largely of low- to moderate-income and where
many neighborhoods are underbanked or unbanked.
II. Initiatives
New York State Banking Development District (BDD) Program
In an effort to enhance service and access to unbanked/underbanked communities, Ridgewood
Savings Bank participates in the New York State Banking Department’s Banking Development
District (“BDD”) program. BDD designations are given to unbanked/underbanked communities
with significant unemployment rates and a majority of Census tracts classified as low- to moderateincome. The objective of BDD branches is to bring banking services to these underserved areas and
help banks effectively compete with alternative service providers as well as to provide avenues for
unbanked individuals to enter the financial mainstream and stimulate long-term economic and
community development. The New York State BDD designation provides participating banks
throughout New York City with state and local incentives, allocating more than $100 million in
public funds deposits for new BDD branches, property tax reductions for the branches, and
assistance in locating suitable commercial space.
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Responding to this opportunity to serve unbanked and underbanked communities with support
from local stakeholders such as the Borough President’s Office and Community Boards, Ridgewood
Savings Bank successfully applied for the BDD Initiative. As a result, Ridgewood Savings Bank
received two of the three BDD designations granted in the Bronx service area and opened two
branches. In September 2006, the bank opened its White Plains Road Branch, followed by its
Soundview Branch in April 2007. The Bank continues to build upon its presence in the market and
increase its customer base but notes that it faces a “challenging environment.” These branches are
located in a low- to moderate-income level area, which consequently results in low balances in
checking and savings accounts. Nevertheless, Ridgewood Savings Bank emphasizes that it maintains
a long-term commitment to developing its BDD branches and to serving these communities.
Mobile Banking Center
In May 2005, Ridgewood Savings Bank introduced a Mobile Banking Center to serve residents who
are unable to access banking services due to mobility constraints or distance from brick-and-mortar
branches. The Mobile Banking Center’s motto, “Bringing the Branch to You,” encapsulates its
objectives and capabilities. Customers can open accounts and conduct transactions at the full service
Mobile Banking Center, which is also equipped with an ATM. In order to offer a full range of
products and services, the bank submitted a branch application with the FDIC and the New York
State Banking Department for approval. As a result, the Mobile Banking Center is considered an
official branch of Ridgewood Savings Bank and has $3 million in deposits as of July 2008. The
custom-built, handicap-accessible Mobile Banking Center currently visits 15 sites, mainly senior
citizens’ residences, on a bi-weekly basis. Visits by the Mobile Banking Center will vary from 90 to
120 minutes, depending on the amount of banking activity at each facility. Occasionally, a facility is
selected due to the close proximity to a full-service branch and, therefore, many residents can
continue to enjoy a banking relationship with Ridgewood by means of the Mobile Banking Center.
Residents are made aware of the Mobile Banking Center’s scheduled visits through weekly
announcements made by the facility. The branch employs a full-time staff of one assistant manager
and two savings counselors. While the Mobile Banking Center is not very profitable, bank
management believes that the value delivered to the community justifies and validates the continued
investment. Mobile branch employees note that customers appreciate having their “financial
independence” and the ability to access the many banking services. As a result, the Mobile Banking
Center staff has developed a strong relationship with the residents as well as the staff members of
these facilities.
Financial Literacy and Outreach Programs
Beginning in 1999, Ridgewood Savings Bank has offered First Time Homebuyers’ Workshops to
help individuals make informed decisions regarding mortgages and home purchases. To market its
workshops, the bank places advertisements in local community newspapers, inviting individuals to
attend regardless of their banking relationship. The bank also provides free refreshments and
giveaways to attract attendees. Each two-hour workshop includes presentations from an attorney on
the legal aspects of home ownership, an engineer on home inspections, and a mortgage consultant
on the application and qualification process. Workshops conclude with a question and answer
session, and attendees receive informational booklets and bilingual materials created by Ridgewood
Savings Bank. The Bank has conducted over 75 workshops, with an average of 35 attendees in lowto moderate-income communities and 15 attendees in more affluent neighborhoods.
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Since 2005, Ridgewood Savings Bank has partnered with local elementary, middle, and high schools
to educate students about personal finance and savings through the ABA Education Foundation’s
“Teach Children to Save Day.” To date, these outreach efforts have reached 3,200 students in 27
public and private schools in the bank’s service area. The bank has also implemented a banking
program at a number of schools to teach students how to manage bank accounts and to encourage
regular deposit and savings habits. Through this program, students can open a savings account with
no minimum deposit. Teachers collect students’ deposits on a periodic basis, and bank messengers
transfer them to the local branch for deposit into student accounts. As of August 2008, Ridgewood
Savings Bank maintains over 3,220 accounts through its school banking program, amounting to
$1.15 million. In addition, the bank has taken opportunities to conduct outreach sessions for
parents. Leveraging its relationship with local schools, Ridgewood Savings Bank has conducted
educational programs for parents during PTA meetings.
In 2008, the bank began a partnership with ARIVA, a Bronx-based nonprofit organization
specializing in financial services and education for low-income residents. Ridgewood Savings Bank
hosted ARIVA Free Tax Preparation Day at its two Bronx BDD branches. ARIVA provided IRScertified tax preparation professionals to offer free services to Bronx residents earning annual
income of $45,000 or less. The bank assigned three employees at each location to develop rapport
with attendees, cross-sell relevant banking products, and engage in subtle marketing for the bank.
As a result of these events, ARIVA staff processed a total 80 tax returns amounting to $120,000 in
refunds. Encouraged by the program’s success and the potential outreach opportunities, Ridgewood
Savings Bank plans to offer ARIVA Free Tax Preparation Day in three or four branches in 2009.
Ridgewood Savings Bank also offers “Money Matters” workshops to the general public. During
these one-hour educational sessions, branch employees present information on the benefits of
deposit accounts in comparison to check cashing services, the importance of savings in reaching
financial goals, account management, and information about obtaining a mortgage. Introduced in
early 2008, the bank has conducted four workshops at branches located in low- to moderate- income
areas, attracting an average of 25 attendees per session.
Multicultural Marketing
Ridgewood Savings Bank’s branch locations span a diverse array of ethnic communities throughout
the New York City metropolitan area, with significant populations of immigrant families in its
service areas. In order to provide services for these non-English speaking communities, the bank
creates in-language print ads for various local ethnic newspapers. Additionally, the bank has created
Spanish radio and cable TV commercials which are broadcast on Spanish radio and cable TV
stations. Telephone and ATM banking services, as well as its website, are also available in Spanish.
The bank currently has employees who speak a total of eight foreign languages. However, changing
demographic trends and greater emphasis on outreach to unbanked immigrants has resulted in the
need for even more bilingual staff. In response, Ridgewood Savings Bank has modified requirements
for new hiring at branches located in ethnic neighborhoods or areas with sizeable immigrant
communities. Job applicants must speak the language of the predominant ethnic population in a
particular branch’s footprint. The bank cites these efforts as an integral part of its outreach and
service to the unbanked and underbanked.
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III. Lessons Learned
Opening branches in underserved communities improves access to banking services. By
establishing a physical presence in these neighborhoods, the bank has increased its visibility and
convenience of providing products and services. The bank can demonstrate the benefits of
establishing banking relationships in direct competition to alternative service providers in the
branch’s footprint.
Combining local and state initiatives with internal business strategies to reach
underbanked populations can help banks establish relationships with unbanked
individuals. The bank’s BDD branch designation is a critical component in its efforts to deliver
beneficial banking services to underserved consumers and provide additional government
resources and guidance that facilitate bank profitability and presence in these communities.
Maintaining ongoing dialogue with the community helps the bank assess and evaluate
the effectiveness of its programs and offerings within each branch footprint. The bank
relies on its strong relationships with community organizations and neighborhood presence to
identify each community’s needs and to address them accordingly.
Flexibility to continually adapt to changing demographics is necessary in order to offer
valuable and relevant services to its customers. In a dynamic setting like the New York City
metropolitan area, the ability to remain attuned and flexible to change helps the bank attract new
groups of unbanked and underbanked individuals.
About Ridgewood Savings Bank
The largest mutual savings bank in New York State and the second largest in the nation, Ridgewood
Savings Bank was established in 1921. Headquartered in Ridgewood New York, the bank operates
36 branches in Queens, Brooklyn, the Bronx, Manhattan, Nassau, Suffolk, and Westchester
Counties. This network includes a Mobile Banking Center introduced in 2005 and 12 branches
resulting from the acquisition of City and Suburban Federal Savings in July 2007. In addition, the
bank operates a consumer loan center, two mortgage loan centers, and a retirement plan service
center.
The bank offers a variety of consumer and commercial credit and deposit products, as well as
financial services. Available loan products include one to four family residential mortgages, multifamily mortgages, cooperative loans, commercial real estate loans, home equity loans, and consumer
loans. Examples of deposit account offerings include regular savings, club accounts, checking
accounts, money market accounts, certificates of deposit, and individual retirement accounts. Other
services include direct deposit and safe deposit box rental, as well as, the sale of travelers’ checks,
money orders, and United States Savings Bonds. The bank faces intense competition in its service
area from many large money-center institutions, national and regional banks, savings and loan
associations, credit unions and mortgage brokers.
Assets, $Th, as of September 30, 2008: $4,101,225
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Second Federal Savings of Chicago
Headquartered in the South Side of Chicago, Second Federal targets the Mexican immigrant
community. Second Federal was one of the first banking institutions in the United States to accept
the Matrícula Consular card as a valid form of identification. In order to serve unbanked and
underbanked populations, the bank provides money transfer and bill payment services to nondeposit customers. Second Federal also developed a remittance product based on a dual ATM card
program.
“We are focused on understanding and serving the changing needs of our community; we have the ability to recognize
when outside influences affect us and transition with them.” - Mark T. Doyle, CEO and Chair
I. Target Population
Understanding the Mexican Immigrant Population
In 1992, Second Federal’s management determined that there was an adequate business case for
targeting its marketing efforts solely to the Mexican immigrant community, which now comprises its
primary customer base. The bank closed two branches located in more affluent, less diverse
neighborhoods and opened a new branch in the suburb of Cicero, which has a significant Mexican
immigrant population that has increased from 40 percent Mexican to 80 percent since the branch’s
opening.
In an effort to deepen its understanding of this segment, the bank engaged a research firm to study
the changing demographics of the Chicago Metropolitan Area and consequently discovered that 48
percent of residents within its branch network were undocumented immigrants, and therefore
unlikely to be banked. Through its knowledge and understanding of the market, Second Federal is
more responsive to the needs of its community. As a result, free services such as money orders and
utility bill payments have become principal offerings to bank customers.
In the past five years, bank employees have noted that the Mexican immigrant community has
become increasingly aware of banking services and their value. The education and assimilation of
second and third generation immigrants have contributed to the community’s increased
understanding of and receptiveness to banking. Increased competition has also played a major role
in driving this change. In a community of 175,000 residents, several larger banks have entered the
market. These banks have undertaken initiatives to provide education, targeted marketing, and
product offerings to the local Mexican immigrant population, thereby escalating the community’s
level of sophistication toward banking services. In response, Second Federal has also begun to offer
a broader range of services, including internet banking, interest bearing checking accounts, bill pay
services, and credit cards, while continuing to cater to first generation immigrants and those who are
still unbanked and underbanked.
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II. Initiatives
Matrícula Consular
Obtaining a Matrícula Consular card is a top priority for undocumented individuals because it is a
form of identification they can use to open deposit accounts and to obtain an Individual Taxpayer
Identification Number (ITIN). Understanding the importance of the Matrícula Consular card to the
community, Second Federal has built a strong relationship with the Consulate to facilitate the
identification process and invites the Mexican Consul to its branch locations for the purpose of
issuing Matrícula Consular cards.
Individual Taxpayer Identification Number (ITIN)
Second Federal has also registered with the IRS to become an ITIN acceptance agent. Customers
who have an account at the bank can obtain an ITIN at bank branches free of charge. The Mexican
immigrant community has responded positively to this initiative. Within the first year of offering this
service, the bank opened nearly 600 bank accounts. Although, many clients already obtained ITIN
numbers, the vast majority were a result of the acceptance agreement with the IRS. These customers
have since become part of Second Federal’s regular customer base. The program’s success garnered
attention in the wider banking community, and Second Federal participated in the Federal Reserve
Bank of Chicago’s monthly seminars to inform other banks about ways to reach out to the
unbanked population.
Extended Hours
Second Federal’s locations are open seven days a week. Through the addition of walk-up and drivethru operations at its facilities, the bank serves customers until 7:00 p.m. Monday through Thursday,
8:00 p.m. on Friday, 4:00 p.m. on Saturday and 2:00 p.m. on Sunday. The extended business hours
accommodate customers who cash payroll checks on Friday evenings and Saturday, when volumes
tend to be highest. Although the bank’s extended hours cater to customer banking preferences, it
has not differentiated Second Federal in its service area because many of its competitors are also
open every day of the week.
Dual ATM Card Program
In 2001, Second Federal introduced a lower cost method to send money to Mexico and other
countries through the use of dual ATM cards, believed to be the first program of its kind in the
United States. Customers can send one ATM card to relatives in their home country, which enable
them to withdraw funds directly from the account and eliminate the need to use wire transfers.
Second Federal’s fee ranges from $1.50 to $2.00, substantially lower than the $20 to $30 typically
charged by alternative providers.
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Check Cashing
Although Second Federal offers check cashing for individuals without account relationships, the
bank recognized that many residents in the community prefer to cash their checks at local
businesses, such as grocery stores. Second Federal has begun to receive more business from small
businesses and is now registering them as money service businesses, with the bank accepting double
endorsed checks.
ITIN Loans
Second Federal began to aggressively market ITIN loans in the first quarter of 2004. At that time,
private mortgage insurers would not provide coverage for this product. Moreover, there was not a
secondary market available to buy them. The bank believed, however, that the market was
composed of creditworthy borrowers. When the bank first added ITIN loans to its portfolio, it
faced a number of challenges. First, they needed to design the program and underwrite the loan,
which required six hours per loan. Second, the product was so well-received by the community that
the number of loan applications overwhelmed the bank. With over $40 million in its pipeline for
applications, the bank was unable to handle the volume. Finally, the rapid growth of product
originations and corresponding regulatory scrutiny necessitated discussions between the bank and its
regulator with regard to the purpose and direction of the product. The bank’s ability to resolve these
issues allows them to continue offering ITIN lending today, which currently totals $70 million in its
portfolio. However, because of factors relating to the uncertainty of immigration reform, as well as
economic factors, delinquencies are expected to become a major concern. As unemployment rises,
many undocumented borrowers may be unable to keep their mortgages current. This market is not
insolated from the many problems in today’s economy.
Education and Outreach
In addition to outreach efforts to non-English speakers and first generation immigrants, the bank
has also begun focusing on the large and emerging second generation, who tend to be bilingual and
have a better grasp of banking concepts. Targeting this more educated and more assimilated
generation has become an important part of the bank’s outreach efforts, as it represents a market for
which the bank wants to develop products and services that will bring immigrants into the banking
mainstream.
While their parents and grandparents may come from a culture where a very large percentage of the
population is unbanked and not familiar with basic banking concepts, the second and third
generations are more likely to be accustomed to the idea that finances should be handled through
bank accounts and hence to ultimately become part of the banking mainstream. Furthermore, the
younger generation’s access to and skills in using technology create more avenues to utilize banking
products and services. Adapting to the community’s increased gentrification and technology savvy,
the bank has worked with community groups to develop a Spanish-language curriculum for teaching
individuals to use internet banking services. The evolution of education and outreach programs is
driven by Second Federal’s larger goal to offer the types of services and products needed by the
community.
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Regulatory Challenges
Second Federal determined that for their market a crucial part in understanding their customer base
was recognizing that the unbanked and the undocumented were virtually the same. As a result of
local municipalities passing their own immigration regulations, the bank reports that many
immigrants have become reluctant to save money in banks and use banking services.
III. Lessons Learned
The first and most important step in serving the unbanked and underbanked is to
understand the needs of your market. For Second Federal Savings, hiring a research firm to
study its market area provided valuable insight that informed the types of products and services
that should be offered.
Recognize changes and obstacles in your market and address them accordingly. Shifting
demographics as well as external factors (e.g., economic, state, and federal regulations,
competition) can dramatically change the marketplace and affect a bank’s ability to serve its
community. The ability to remain cognizant, flexible, and innovative enables banks to
effectively modify their focus and better serve their communities.
A major part of Second Federal’s success has been its efforts to assist the broad range of
unbanked immigrants who want to have a banking relationship. For Mexican immigrants,
obtaining the Matrícula Consular card and ITIN is a crucial step in the path to becoming
banked. The bank’s willingness to facilitate the issuance of these important forms of
identification on-site at no charge and to accept them as sufficient identification for new account
opening removes significant obstacles for the unbanked.
About Second Federal Savings of Chicago
Second Federal Savings is a $256 million financial institution with five offices and seven ATMs
located in Chicago. It has served the financial needs of its local communities for the past 125 years,
and the Mexican immigrant population since their arrival in the late 1960s. In 1992, the bank
officially decided to market its services solely to the immigrant population, both documented and
undocumented.
Assets, $Th, as of September 30, 2008: $258,896
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Banks’ Efforts to Provide Products and Services
Case Study
Examples
Case Study
Examples
Case Study
Examples
Objective 1 – Chapter 4
Objective 2 – Chapters 5-7
Objective 3 – Chapters 8-11
Education and Outreach
Obstacles and Access
Products and Services
Identify and quantify the extent to
which insured depository
institutions outreach, serve, and
meet the banking needs of the
unbanked and underbanked.
Identify challenges affecting
the ability of insured
depository institutions to
serve the unbanked and
underbanked, including but
not limited to cultural,
language, identification
issues, and spatial/location
issues.
•
•
Retail Branch Information
•
Account Opening &
Onboarding
Services Provided to NonCustomers
343
Identify innovative efforts
depository institutions use to
serve the un/underbanked,
including small dollar loans,
basic banking accounts,
remittances, and other lowcost accounts, products and
services used by the
un/underbanked.
• Deposit Products
• Savings Accounts
• Payment Products
• Credit Products
Case Studies
Products and Services
Five case study banks offer innovative transaction products, credit, and asset-building products that
meet the needs of unbanked individuals and serve as a mechanism for entering the economic
mainstream.
Institution
Artisans’ Bank
(Wilmington, DE)
Bancorp South
(Tupelo, MS)
Carver State Bank
(Savannah, GA)
Target Population
Products
Credit Builder Program provides a 12-month loan while
customers place proceeds in deposit account held as
collateral and replay loan from cash flow.
Low- to moderate-income
individuals in their area with
poor credit history or past
experience with financial
mismanagement
Delawareans Save IDA helps customers set and achieve
monthly savings goals over three-year period and
provide up to a 3:1 match if savings targets are met.
Second Chance Checking restricts access (check writing
and debit cards) for customers ineligible for standard
checking product.
African American and
Hispanic American
communities of urban and
rural markets in the South
Smart Saver IDA combines a mortgage and a savings
product with eight hours of financial education to
provide resources toward purchase of home.
Small Business IDA provides 4:1 match to local
entrepreneurs and requires applicants to take classes and
develop business plan to qualify.
Multi-cultural community in
Savannah, including African
Americans, Hispanics,
Iranians, and Chinese
Credit Rebuilder Loan pairs loan of $1,000 to $10,000
with CD; approval based on debt to income ratio rather
than credit history.
Central Bank of Kansas
City
Kansas City, MO)
Diverse immigrant and
minority population, including
African Americans,
Vietnamese, Sudanese, and
Mexicans
Payroll Cards allow low- to moderate-income employees
to receive income without needing to cash checks or
access to direct deposit while preventing them from
overdrawing on account and incurring NSF or merchant
fees.
KeyBank
(Cleveland, OH)
Low- to moderate-income
populations, including African
Americans, Hispanic
Americans, working poor, and
urban residents
Low-cost (1.5 percent up to $22.50) check cashing
services for non-depository clients bring unbanked into
branches and create opportunities to transition them to
deposit accounts; biometric technology verifies
customer identity, lowering cost and increasing
efficiency.
Common Lessons Learned
Entry-level products provide valuable opportunities for unbanked individuals to re-establish credit-worthiness and reenter the economic mainstream while increasing control and reducing risk to banks.
Rather than closing accounts due to mismanagement, second chance accounts help banks retain existing customers.
The advantages of beneficial and relevant banking products, when compared to alternative service providers, pose an
important value proposition for unbanked individuals.
Banks can better serve unbanked and underbanked consumers by developing debit card-based accounts and prepaid
cards to meet their needs.
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Case Studies
Artisans’ Bank
Artisans’ Bank offers a Credit Builders Program targeted to low- and moderate-income borrowers
with less than perfect credit. The proceeds of a small dollar loan are deposited into an Artisans’
Bank savings account, which serves as the collateral. Artisans’ Bank also offers free checking
accounts and individual development accounts for low- and moderate-income consumers. In 2003,
the bank started a “branch” at an elementary school where fourth graders learn about savings and
make weekly deposits. Artisans’ Bank is also active in providing financial education through its
partnerships with the City of Wilmington and the Delaware Money School.
“We take a hard look at what we can do to make a difference in our community; even though we lack the ability as a
small bank to say ‘yes’ to every request that comes our way.” – Joel Schiller, CRA Officer
I. Target Population
Artisans’ Bank does not engage in targeted marketing and direct outreach to the unbanked and
underbanked. Instead, the bank promotes its innovative products and services through partnerships
with community organizations and assistance agencies, such as the YWCA of Delaware, Boys and
Girls Clubs, and the Delaware CRA Council, that serve the unbanked and underbanked populations.
Artisans’ Bank provides general banking information and personnel support on financial education
and banking products to the organizations, which refer potential clients to the bank. This
partnership model enables Artisans’ Bank to develop relevant products while utilizing community
organizations’ deep relationships and experience with the target population to effectively educate
and outreach to unbanked and underbanked individuals.
II. Initiatives
Credit Builder Program
Artisans’ Bank designed a Credit Builder Program for potential homebuyers needing assistance to
become creditworthy. The Credit Builder Program enables individuals to build savings and
accumulate funds to meet down payment or settlement cost responsibilities. Artisans’ Bank funds a
12-month loan between $500 and $2,000 and places the proceeds in a deposit account, which is held
as collateral. Customers repay the loans on a monthly basis from their cash flow. Interest is fixed at a
flat 9 percent rate, and the bank waives all other fees. By making loan payments to their savings
account, customers develop a routine of saving. At the end of the year, customers receive their
deposit principal plus accrued interest earned on the deposit account. To date, Artisans’ Bank has
not reported any defaults on Credit Builder Program accounts.
When the product matures and the loan is paid off, customers are encouraged to maintain their
banking relationship and continue building assets through regular savings habits. Branch personnel
make the effort to contact each Credit Builder Program customer individually by letter or by
phone. In most cases, the bank has found that spending a few minutes with customers to inform
them of both the opportunities and benefits of continuing their banking relationship has been
successful in retaining customers.
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Artisans’ Bank does not market its Credit Builder Program directly to the public. Instead, the bank
promotes the product through community organizations and social service agencies that work with
financially challenged individuals. The bank provides information to the organizations about the
products and services available to the unbanked and underbanked and leverages these relationships
to receive referrals for potential customers. For example, Credit Builder Program’s initial
customers were individuals who were working toward first-time home ownership and were referred
by housing counseling agencies in the community. The bank also encourages agencies to establish
and maintain mentoring relationships and to educate their clientele about fiscal responsibility and the
importance of saving. Strong relationships with community agencies have helped Artisans’ Bank
outreach to the unbanked and underbanked, and as a result, the Credit Builder Program product
has been well-received, averaging 25 to 50 accounts per year.
Artisans’ Bank credits the product’s success to three main factors. First, customers are required to
become educated on Credit Builder Program before opening an account. Second, community
agencies play a crucial role in referring clients whom they deem to have the potential to use the
product successfully. Third, the bank recently shifted its focus to giving customers with no credit or
severely damaged credit the opportunity to establish or restore a more positive record on their
consumer report. Credit Builder Program provides customers who intend to return to the banking
mainstream an opportunity to re-establish disciplined and structured banking habits.
SEED Accounts
In a partnership with a local inner-city Boys and Girls Club, Artisans’ Bank sponsors a youth savings
program, called the SEED Initiative (Saving for Education, Entrepreneurship, and Development).
Led by the Corporation for Economic Development (CFED), the Center for Social Development at
Washington University in St. Louis, the Initiative on Financial Security of the Aspen Institute, the
New America Foundation, and the University of Kansas School of Social Welfare, the program
began as a national pilot program operated by the Boys and Girls’ Club with an investment banking
house. When that institution found the program to be too burdensome to continue, Artisans’ Bank
assumed administrative responsibilities for the accounts in 2006, accepting and housing the 65 youth
accounts in the program. Similar to an IDA, SEED Accounts are deposit accounts geared to
middle school students that encourage regular deposits and restrict withdrawals. Upon reaching the
age of 18, the students will receive matching funds of deposits made over the course of their school
years. The SEED Initiative is funded by the Ford Foundation, the Schwab Foundation, and nine
other foundations.
Delawareans Save IDA
Through the Delawareans Save IDA initiative, Artisans’ Bank will process over $1.5 million of
public and private sector money in matching funds to low- and moderate-income savers who have
participated in this structured asset-building savings program conducted by the First State
Community Loan Fund. Previously offered by the bank in conjunction with the YWCA, the
Delawareans Save initiative involves consumers who agree to participate in financial literacy
classes, save between $1,500 and $3,000 over a three-year period, make monthly deposits, and
refrain from withdrawing money unless for emergencies, which require dual authorization from local
agency and bank personnel. Many of the product’s customers are minorities based in urban settings,
including single parents.
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If customers achieve their pre-established savings goal, they receive additional funding at the end of
three years, up to a 3:1 match. Thus, customers have an additional incentive to save on a monthly
basis. If customers fail to save monthly, they are removed from the program. Delawareans Save
IDA has been met with great success, and the bank has received three more rounds of government
funding due to the volume of account openings. Now in its fourth IDA round, the program has
served over 1,000 consumers.
The bank has also created a parallel savings account for IDA customers. This enables IDA
customers to deposit into a savings account other than their IDA. In emergency situations,
customers can obtain funds by tapping their parallel savings account instead of withdrawing money
from their IDA and thereby violating the terms of the Delawareans Save IDA program.
Education and Outreach
Like other small community banks, Artisans’ Bank faces the challenge of not having a full-time CRA
officer and limited internal resources to devote to market their CRA programs or perform consumer
education. The bank recognizes the value and importance of education to the unbanked and
underbanked community. Education and literacy programs provide the understanding and guidance
that individuals need to properly handle the responsibilities of having a bank account and avoid
fraud or mismanagement.
Educational sessions are generally one-on-one. Employees involved in the retail and accountopening side of the bank, such as Customer Service Representatives or Managers, usually conduct
the sessions and generally use materials created by other banking or community organizations.
Artisans’ Bank relies on partnerships with third-party organizations in its education and outreach
efforts, working with community agencies on different programs and local savings incentives such as
the Delaware Financial Literacy Institute. To maximize the impact of these programs, the bank
stresses the effectiveness of educational sessions held on a recurring basis, much like a school
curriculum, rather than a single two-hour class. Repetition and reinforcement of knowledge over the
course of many months and meetings increases the likelihood of raising awareness, and the bank
actively seeks to partner with agencies that already have these types of programs in place.
III. Lessons Learned
Offering education in a series of classes, rather than as a single session, is a more
successful and effective approach to promoting financial literacy. Reinforcing information
improves individuals’ ability to retain and apply it to financial decision-making.
Incorporating education into targeted products for the unbanked and underbanked
improves their potential for success. The bank requires an educational component to its loan
and IDA products because education equips customers with the knowledge and discipline to
responsibly handle products and to re-enter the banking mainstream.
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Case Studies
Partnerships with other community organizations toward a common objective can
supplement and complement bank initiatives to outreach and serve the community.
Community agencies interact regularly with potential customers and become a valuable source
for insight into the needs of the community. They can also be an important partner in education
programs and provide referrals for tailored products offered by the bank.
About Artisans’ Bank
Artisans’ Bank is a mutually owned, full-service commercial bank. The bank is headquartered in
Wilmington, New Castle County, Delaware. As of December 31, 2007, Artisans’ Bank’s assets
totaled $592.4 million. The bank currently operates 13 branch locations in Delaware; nine branches,
including the main office branch, are located in New Castle County, two branches are located in
Kent County, and two branches are located in Sussex County. The bank also operates three loan
production offices, with one in each county.
Assets, $Th, as of September 30, 2008: $596,298
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BancorpSouth
Outreach and financial education are at the core of BancorpSouth’s efforts to serve the local
unbanked and underbanked population, with programs conducted in and tailored to each market.
The bank also offers a Second Chance Checking product designed to assist people who have
struggled with successfully maintaining a checking account in the past, affordable mortgage products
targeted to customers with blemished credit, and free tax preparation at VITA sites. The bank
employs bilingual, Spanish-speaking staff at branches located in areas with a sizable Spanishspeaking population.
“We’re a community bank, and we’re very much focused on the communities that we’re in. That’s how we make a
name for ourselves and carry out education programs.”
- Monica Aldridge, First Vice President
I. Target Population
BancorpSouth focuses marketing and outreach efforts to urban, rural, African-American, and
Hispanic-American segments in its service areas. The Hispanic population, in particular, has become
an important demographic for the bank due to the growth of this community and its heavy
concentration of unbanked and underbanked individuals. Within these population segments,
BancorpSouth targets unbanked and underbanked adults with ties to community organizations, as
most outreach efforts are conducted in partnership with and at the site of local nonprofit
organizations, government assistance agencies, and adult education centers.
II. Initiatives
Education and Outreach
BancorpSouth reports that it has been carrying out extensive outreach programs in its community
since 1993. The bank states that it “desires to help the unbanked and underbanked obtain credit and
become better banking citizens,” and basic financial education serves as the crucial first step in this
process. Bank employees observe that many of these individuals do not use banks for their financial
transactions because they are not aware of the products and services available to them. They do not
know that banks offer more than just checking and savings accounts but also insurance, mortgages,
and other loans. Bridging this information gap has become a primary focus in the bank’s efforts to
bring the unbanked and underbanked into the economic mainstream.
The bank’s education and outreach program began as a way to help first-time homebuyers attain the
financial literacy certification required for some loan applications in BancorpSouth’s markets. By
partnering with local governments and nonprofit organizations, the bank created an educational
program that enabled people to successfully secure funds to purchase a home.
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Today, each of BancorpSouth’s main offices conducts at least two education programs annually,
with many exceeding this minimum. More than 680 financial education programs reaching more
than 40,000 individuals were conducted from September 2007 to June 2008. While the needs of each
community within the institution’s service area vary, efforts usually focus on K-12 schools and adult
education programs. Hundreds of employees across the organization are involved with education
programs, with at least one employee working on these initiatives at each location.
Because the FDIC’s Money Smart curriculum is written at a level that can be understood by a wide
range of audiences and is readily accessible to banks, BancorpSouth uses the curriculum universally
as the foundation of its educational programs for middle school and high school students as well as
for adults. The bank’s own brochures, which are distributed as financial education materials, can also
be used by audiences of varying ages and reading levels. The educational brochures detail products
available to the unbanked and underbanked and also cover topics such as identity theft, fraud alerts,
and online fraud. To serve the Spanish-speaking community, the bank also offers 11 Spanishlanguage educational brochures that provide information on checking and savings accounts,
mortgage loans, bank fees, and other subjects.
The bank asks all main locations to offer at least one education session focusing on home ownership
in order to educate community members about down payment assistance and the bank’s IDA
product. However, local branches also have flexibility to develop and conduct additional sessions on
other topics, such as checking, savings, and identity theft prevention.
BancorpSouth reports that a major key to its success in reaching out to adults has been the decision
to hold more programs outside of bank branches. The bank has found that branch-based programs
attract very few attendees, if any. Branch employees note that this is likely due to apprehension
toward bank facilities felt by unbanked and underbanked individuals. By relocating education
programs to churches and community centers, bank employees have experienced greater
receptiveness and found more opportunities to educate the unbanked and underbanked. Typical
outreach programs average 20 attendees, with some attracting nearly 400 people.
Branch personnel coordinate with local pastors, work with the community’s Head Start Center to
reach out to parents, collaborate with the Department of Human Services to identify people on
temporary or welfare assistance, or partner with nonprofit organizations like Habitat for Humanity
to introduce home ownership programs and other banking products and services to clients. Most
programs include refreshments to accommodate attendees coming after work and offer door prizes,
which can be helpful for encouraging attendance.
Recently, the bank has begun working with employers to bring financial education to the workplace.
During bank-sponsored lunches, branch personnel provide valuable information on topics for
employees, such as investment and 401(k) plans, in a convenient time and place. These lunchtime
sessions typically last 30 to 45 minutes and are held on a monthly or quarterly basis. Employers do
not need to be business customers of BancorpSouth to arrange employee education sessions. The
bank also works with local government groups, such as the police and fire departments, to offer
similar educational programs.
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For youth outreach, branches work with local schools to organize “Teach Children to Save Day”
and utilize a variety of materials from the American Bankers Association, National Jump$tart’s
“Personal Finance Curriculum,” and Bank of America’s “Financial Fitness for Life.” Branch
personnel may take the initiative to design more creative programs, using puppet shows, stories
incorporating the Berenstein Bears, or skits starring the employees. BancorpSouth cites its longstanding relationship with local schools as an integral part of their success, since it enables branches
to easily contact teachers and organize educational visits.
Although the bank lacks a formal tracking system to measure the results of its outreach efforts,
employees observe a general correlation to the bank’s success in customer acquisition, which further
motivates their efforts to deliver value and benefit to the community. Furthermore, BancorpSouth
cites that financial education and outreach allows the bank to make direct contact with potential
customers and inform unbanked individuals of what BancorpSouth can offer them. These efforts
play an integral role in expanding the bank’s customer base and, therefore, its business.
Second Chance Checking
In January 2007, BancorpSouth introduced a transitional checking product, Second Chance
Checking, which sought to address the needs of a segment of the population that had mismanaged
checking accounts in the past but wanted to return to the banking mainstream.
When Customer Service Representatives find that a potential customer is ineligible for a standard
checking account, they offer Second Chance Checking as a way to facilitate moving back into a
regular checking product. Typically, Second Chance Checking customers have ChexSystems
screenings that are not high enough to qualify for the bank’s standard checking product but have not
had fraud, closures, or negative history in the past three years. For a $6.99 monthly fee, the product
allows customers to write checks and use debit cards. After one year, Second Chance Checking
customers with good history are eligible for a standard free checking account. As of December 31,
2007, the bank reported 1,537 Second Chance Checking accounts, with most customers
transitioning to regular checking after one year.
Loan Programs
On the credit side, BancorpSouth helps unbanked and underbanked individuals borrow needed
funds for home purchases through a combination of loans, counseling, and financial education.
Once a customer is pre-approved for a home purchase loan, the bank will offer income-qualified
customers the opportunity to also open a Smart Saver Individual Development Account (IDA),
which is similar to a money market account. In addition to combining mortgage products with a
savings product, the program also includes eight hours of financial education to ensure that
customers understand how to handle the products. While there are restrictions tied to the account to
discourage early withdrawal of funds, the account proves to be a useful tool in assisting customers
with reaching their savings goals. A five-year deed restriction, which is a condition of receiving
matching funds under the Smart Saver program, encourages customers to focus on long-term wealth
building.
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Not only are customers eased back into the banking mainstream through improved awareness and
responsibility, they also receive funds toward the purchase of a home. To further encourage
customers to save and to make progress toward achieving their goals under the Smart Saver IDA,
the bank offers a 3:1 match toward a home purchase to be used for down payment and/or closing
costs once customers save $1,000 in 12 months. In 2007, ten customers participated in the loan
program, and BancorpSouth has already exceeded this number through the first half of 2008.
In addition, the loan program can be used in conjunction with the Federal Home Loan Bank HELP
grant program in which a first-time homebuyer agrees to education and a five-year deed restriction.
Customers applying for Federal Home Loan Bank HELP grant money can qualify for up to an
additional $7,000 toward their down payment and closing costs. As of June 2008, the bank has
already awarded all of the Federal Home Loan’s $60,000 allocation. (For 2008, Federal Home Loan
Bank of Dallas allocated $60,000 to each Member Bank for HELP grant funding.) In some areas,
customers can pair BancorpSouth’s products with state programs to secure more funds. In total,
some homebuyers can potentially receive over $20,000 toward the purchase and closing of their new
home.
III. Lessons Learned
Unbanked and underbanked individuals do not use banking services because they are
often unaware of what is available, and relying solely on marketing efforts often fails to
address their needs. These individuals comprise an entire segment of the population that
needs financial literacy training in order to make informed decisions. Targeted educational
sessions best inform the unbanked and underbanked of what banks can offer them.
Partnering with other community organizations and conducting outreach visits help
lay the groundwork for providing financial education programs and building trust
within the community. Hosting education sessions in a comfortable and familiar
environment outside of the branch is the best way to encourage attendance and interaction
between the attendees and bank employees.
Targeted entry-level products provide opportunities for unbanked and underbanked
customers to develop sound financial management practices and transition into the
economic mainstream. The bank offers an array of deposit accounts, loans, and assetbuilding products that encourage and enable unbanked customers to achieve their financial
goals.
About BancorpSouth
BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with
approximately $13.3 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of
BancorpSouth, Inc., operates approximately 300 commercial banking, mortgage, insurance, trust,
and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri,
Tennessee, and Texas. BancorpSouth Bank also operates an insurance location in Illinois.
Assets, $Th, as of September 30, 2008: $13,293,708
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Carver State Bank
Carver State Bank targets the unbanked and underbanked population in the Savannah, Georgia, area
with active outreach, second chance checking products, a credit rebuilder program, first-time
homebuyers’ seminars and individual development accounts.
“We pride ourselves on building personal relationships with our customers and build our outreach around this
philosophy. Our motto is, ‘Money matters, but people really count.’”
- Claudia Clarke, Vice President and Senior Lending Officer
I. Target Population
Carver State Bank’s main office is one of only two commercial banking facilities located in one of
Savannah’s three low-income Census tracts. This ultra modern banking facility is in an inner-city
area near downtown Savannah, and serves primarily an African-American population. There are two
large HUD-sponsored housing projects bordering this banking facility to the south and west. Even
so, the demographic, social, and economic makeup of the community primarily on the north and
east has changed in recent years, as the town has undergone gentrification. On December 11, 2007,
the bank opened a branch in a diverse, multi-cultural neighborhood, which includes African
Americans, Caucasians, Hispanics, Iranians, Chinese, and retirees. Carver State Bank is currently
developing outreach programs targeting this new multi-cultural market and plans to hire multilingual
staff.
II. Initiatives
Community Involvement and Outreach
As a locally owned bank, Carver State Bank notes its strong ties to the community. Board members
are long-time residents of Savannah, and the bank has worked closely with city officials to determine
how to serve the community. For example, one of the mayor’s goals is to encourage more unbanked
individuals to use financial services provided by banks rather than check cashers and other
alternative service providers, a goal that aligns with Carver State Bank’s continuing initiatives. The
bank’s President is currently serving as Treasurer of Savannah’s nationally acclaimed Step Up
Poverty Reduction Program.
Within the community, the bank conducts outreach and provides basic banking education as part of
economic uplift and training programs sponsored by local government, nonprofit organizations, and
faith-based groups. The bank reports that these efforts have been successful in encouraging
attendees to open accounts at Carver State Bank. Outreach efforts also include working with firstyear students of Savannah State University and students at a local elementary school to improve
financial literacy and awareness. The bank also actively promotes the personalized service it can
provide to customers, especially senior citizens.
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Fresh Start Program
To help ex-convicts re-integrate themselves into mainstream society, Carver State Bank partners
with Savannah Impact to teach basic banking and financial management classes based on the FDIC
Money Smart curriculum. Topics include opening and maintaining deposit accounts, managing
credit, and budgeting. These classes are part of the financial education component of Savannah
Impact’s Fresh Start Program, which provides ex-convicts with a wide range of educational
courses upon their release. Additionally, the bank recently helped the Old Savannah City Mission
receive a $250,000 award from the Federal Home Loan Bank to assist with the housing of the
students who participate in the Mission’s program designed to help ex-offenders become productive
members of society.
First-Time Homebuyers Program
Carver State Bank’s First-Time Homebuyers Program is offered through partnerships with the
city government and neighborhood improvement agencies and provides assistance of up to $8,000
for individuals who qualify. Informational seminars are provided on a quarterly basis in the lobby of
the bank’s main office. The sessions typically reach capacity of 125 attendees. Carver State Bank
markets the First-Time Homebuyers Program and seminar through advertisements in local
newspapers. However, bank employees also cite Carver State Bank’s reputation in the community as
a reason for the program’s success.
Small Business IDA
For start-up and small businesses, Carver State Bank offers Individual Development Accounts to
local entrepreneurs. These IDAs are a joint effort between the bank, Economic Opportunity
Authority, and the Savannah city government, which matches each participant’s savings at a 4:1 ratio
up to a maximum of $4,000 per person. In order to qualify for the account, customers must take a
series of classes and develop a business plan. The IDA is held at Carver State Bank, and the city
provides matching funds when the IDA matures based on the amount saved over the course of the
account.
Second Chance Accounts
Account-opening procedures at Carver State Bank include ChexSystems references, but individuals
with a prior history of closure can qualify for a Second Chance Account at the discretion of the
Customer Service Representative or Branch Manager. The Second Chance Account provides the
same services and access available through a regular checking account product, but with additional
monitoring by bank employees to ensure proper management and use. To facilitate this process,
these accounts are opened with a special numbering system that allows bank employees to
distinguish the accounts easily. However, individuals outside of the bank are not able to use the
checks to identify these customers. The Carver State Bank customer service representatives provide
one-on-one training on how to use the account, avoid overdraft and NSF fees, and all of the
negative consequences of mismanaging the account. Since Carver introduced its Second Chance
Account in September 2003, the bank reports that almost 70 percent of these accounts are still
open.
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Credit Rebuilder Loan
Another product offered to unbanked and underbanked customers is the Credit Rebuilder Loan,
which the bank cites as one approach to transition these individuals from alternative service
providers, such as payday lenders, to financial institutions. The Credit Rebuilder Loan deposits
funds from the loan into a Certificate of Deposit (CD), which is used as collateral. The interest rates
for both products are priced at the current CD rate plus 3 percent. The loan can range from $1,000
to $10,000, and approval is based on the individual’s ability to repay the loan (i.e., debt to income
ratio) rather than credit history or credit score. Customers can access the funds once the CD
matures, which can range from one to five years. In many instances, the Credit Rebuilder Loan
customers use the savings as a stepping stone to home ownership by using the savings as a down
payment for a mortgage or to cover home furnishing and other move-in costs. Furthermore, since
the loans are secured by cash, Carver State Bank limits its risk of incurring a major loss if the
customer fails to repay the loan.
III. Lessons Learned
Developing a strong community presence through different outreach strategies enables
the bank to attract unbanked individuals. Through its partnerships with local government
agencies, nonprofit organizations, and community and faith-based groups, the bank positions
itself as a trusted member of the community that serves the interest of its market.
Working with unbanked and underbanked customers requires devoting a significant
amount of time and labor to counseling, assisting, and training customers. Carver State
Bank emphasizes its focus on creating personal relationships with its customers, which helps
them feel more comfortable in a traditional banking environment. The bank found that
unbanked customers often prefer speaking to a bank employee in person or by phone rather
than using online or automated phone services, even for routine inquiries.
Emphasizing the advantages of developing a customer relationship with a financial
institution instead of using alternative service providers is an important value
proposition for unbanked and underbanked individuals. The bank trains its employees to
encourage account-opening so that customers can avoid the high fees charged by check cashing
businesses. The bank’s new branch is directly across the street from two check cashing facilities,
and the branch staff has already been able to convince many individuals of the advantages of
openings accounts and using the bank instead of the more costly check cashing services.
About Carver State Bank
Carver State Bank opened in 1927 as a private bank for a small African-American community in
Savannah. The bank is located in Chatham County, which contains the City of Savannah, and is
predominantly urban. All 13 low-income Census tracts that the bank serves are located in or near
downtown Savannah. Currently, Carver State Bank operates one full-service location and three
ATMs: one ATM is located at its main office; one at the branch; and the other is located at the
Savannah/Hilton Head International Airport. Carver State Bank reports that approximately 16
percent of its current deposit account customers were previously unbanked.
Assets, $Th, as of September 30, 2008: $40,750
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Central Bank of Kansas City
Central Bank of Kansas City (CBKC) is a Community Development Financial Institution (CDFI)
that works to develop products to serve the unbanked and underserved. Despite struggling in the
past, CBKC remains committed to achieving its goal of developing programs that resonate with and
deliver value to the community. As a result, the bank has created more effective approaches,
including its payroll card program for low-income employees and participation in wider community
events for educational outreach, informed by past experiences and continued insight into its
dynamic market.
“You better make sure you know your market and who you are serving.” – Bill Dana, CEO
I. Target Population
Serving a Diverse Immigrant Population
When the bank was founded in 1951, it served the local Italian community, but since then, the
demographic make-up of its market area has changed significantly. As one of the oldest suburban
communities in its region, the immigrant and minority population has steadily grown and currently
boasts a demographic mix that includes African Americans, Vietnamese, Sudanese, Somalians, and
Mexicans. In response to the recent influx of Mexican immigrants, the bank hired eight Spanishspeaking tellers in its lobby as well as Spanish-speaking employees in its New Accounts and Loans
departments. The diversity of cultures in CBKC’s community presents challenges in developing
effective marketing approaches, as the bank continues to target and outreach to the variety of
members in its community.
II. Initiatives
In response to the changing demographics of its market, CBKC has taken a number of approaches
to serving unbanked individuals, including innovative product offerings and branch configuration
strategies, and the bank continues to refine its programs, which have achieved varying degrees of
success.
Hispanic-Focused Branch and Offerings
One of the bank’s initial efforts was to serve the growing Hispanic immigrant and HispanicAmerican community. In 2003, CBKC opened a Hispanic-focused branch and launched a multiproduct approach for transitioning this segment of unbanked individuals into the banking
mainstream. The bank envisioned offering a prepaid card product with remittance functionalities
that would form the foundation for establishing a deeper banking relationship. The bank anticipated
that the prepaid card would meet immediate financial needs—accessing funds and transferring
money to relatives quickly and affordably—while connecting customers with the banking system.
Once customers felt comfortable with the institution, the bank could then promote deposit accounts
and credit products. Despite this methodical approach, transaction volumes and adoption of prepaid
cards did not meet the bank’s expectations, limiting customer acquisition at the branch. The bank
decided to close its Hispanic-focused branch and realigned its strategy by focusing on products and
outreach to the unbanked community.
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From its prepaid card product experience, CBKC has gained insight about the needs and behaviors
of the Hispanic customer segments and has utilized this knowledge to improve subsequent offerings
and initiatives. Cultural and social barriers, in particular, presented unforeseen challenges that the
bank needed to address. Specifically, the bank had not anticipated the multiple sub-segments within
the Hispanic community, which require identifying and responding to generational needs and ethnic
nuances represented in the market. For example, the use of financial services differs greatly between
first and second generation immigrants. Among first generation immigrants, mistrust of financial
institutions, concerns around documentation, and financial dependence of family in their native
country influence decisions about financial services and providers. In comparison, the second
generation tends to be more acculturated and knowledgeable about banking services. CBKC
currently applies this understanding about the diversity and complexity of the Hispanic community
to provide more effective marketing and product development.
Payroll Cards
The bank successfully leveraged the knowledge gained from the initial prepaid card product offering
into a new payroll card program, which was introduced in March 2007. This refined approach of
reaching unbanked individuals at the workplace resulted from the bank’s joint efforts with
employers to set up payroll accounts for low- to moderate-income employees. Although the
program is fairly new, its initial success has been encouraging and has maintained a steady pace,
which allows the bank to accurately predict volumes and transaction. As of September 2008, the
bank has issued 1,500 payroll cards.
In the bank’s payroll card program, employers become the de facto card distributor. Currently,
payroll cards are distributed at 34 employer sites, with an average of 44 employees participating per
site. Issuing and then reloading cards rather than issuing paychecks benefits employers, since they do
not need to write weekly checks for unbanked employees who do not have access to direct deposit.
For consumers, these payroll cards provide the major advantage of preventing individuals from
overdrawing on their account. If a customer uses the payroll card at the point-of-sale, they do not
get charged NSF fees or merchant fees. For the bank, offering payroll cards necessarily increases
card volume, but because the bank does not charge any initiation or transaction fees to generate
revenue, the bank faces concerns with regard to the program’s profitability and viability.
Education and Outreach
CBKC believes that education is a key component to helping the unbanked community, providing
the requisite discipline, knowledge, and wherewithal to use banking products wisely. Although the
bank has sought to increase its reach by providing educational programs through community
services, churches, and social service organizations, it faced challenges in attracting attendees. Fewer
than ten people attended the sessions, despite the bank’s efforts to partner with other community
organizations and to provide the convenience of free meals and babysitting services.
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For this reason, the bank has taken initiative to modify its approach to education, working with
different organizations and community groups to conduct more effective outreach. It participates in
larger community events that attract a broader audience, such as the local “Get Smart About Credit
Day” and “Financial Fitness Week,” which is led by the Federal Reserve Bank of Kansas City and
the FDIC in partnership with CBKC, United Way, and the Mexican Consulate. The bank also began
offering financial education classes at a home for abused women who lack the know-how to handle
and manage finances.
A statewide financial education requirement in high schools provides another channel through
which to educate the community. CBKC was involved in advocacy efforts for mandatory financial
education, and in 2005, the State Board of Education added a one-semester personal finance course
to its graduation requirements for all public high school students, beginning with the Class of 2010.
III. Lessons Learned
Multiple segments exist within the Hispanic market, which need to be addressed in
order to successfully serve the unbanked. Many intricacies and complexities exist within
the immigrant communities, which require a thorough understanding in order to tailor
products to meet the specific needs of various generational and ethnic sub-segments.
There is no silver bullet that will resolve the various challenges in the unbanked and
underbanked population. Banks should continually develop a variety of outreach programs
and refine products and services which help unbanked individuals enter the banking
mainstream.
Lack of financial literacy is often at the root of financial mismanagement, so education
and outreach, particularly through community partnerships, are imperative to
developing better banking customers. Immigrant sub-segments have different levels of
understanding and comfort with the banking system, and banks must assess and address their
financial literacy through partnerships with community organizations in order to build trust
and provide understanding, which will encourage their use of banking services.
About Central Bank of Kansas City
Central Bank of Kansas City is a $162 million CDFI located in the Kansas City metropolitan area.
Three of their six locations are in Kansas City’s urban core. Its Kansas City footprint is located on
the east side of the city, a geography that produces a preponderance of low- to moderate-income or
distressed Census tracts. The bank also operates six ATMs located at all of the locations except for
its Archie facility. In addition, the bank operates three ATMs at off-premise locations—one at a
local university in Kansas City’s urban core and two at convenience stores in distressed
communities. The bank’s largest loan products by dollar volume are commercial loans, including
commercial and industrial loans and commercial real estate loans, and residential real estate loans.
The bank’s lending emphasis is on commercial and retail (small business) lending. Central Bank of
Kansas City is owned by Central Bancshares of Kansas City, Inc., Kansas City, Missouri, a one-bank
holding company.
Assets, $Th, as of September 30, 2008: $165,010
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KeyBank
KeyBank’s strategy for serving the unbanked and underbanked populations consists of an integrated
approach that includes product development, technology, modified retail operations, outreach,
financial education, and strong management support. The KeyBank Plus program offers low-cost
check cashing and money orders for non-customers and was developed as a way to attract clients to
the bank with the goal of converting them to deposit account customers over time.
“We believe the unbanked/underbanked constitute a significant market and that we are able to meet their needs in a
reasonably price, profitable and respectful way.”
– Michael Griffin, SVP, Community Development Banking
I. Target Population
One-quarter of KeyBank’s branches are located in low- to moderate-income Census tracts, and the
bank reports that its management team constantly seeks new and better ways to make those
branches more effective and profitable. In addition, KeyBank has learned that many of their
branches in middle and upper income areas can be productive locations for these programs. The
unbanked and underbanked segments targeted include working poor, urban residents, African
Americans, and Hispanic Americans.
II. Initiatives
KeyBank Plus Program
KeyBank believes that unbanked and underbanked individuals in their service areas need different
products and approaches than what is offered to mainstream customers. Bank executives initially
planned to center outreach efforts on marketing savings accounts with a minimum balance and free
checking accounts that would be affordable and easy to use. However, the bank quickly realized that
it would first need to recognize and identify the reasons why individuals were unbanked. Employees
observed that individuals often prefer alternative service providers to financial institutions either
because they do not understand how bank accounts work or because they have had negative
experiences with banks in the past. Based on this understanding, KeyBank decided to change its
outreach approach by offering check cashing services at a low price, as a means to bringing the
unbanked into branches. Check cashing is an important first step in establishing a comfort level
between the unbanked and the financial institution before offering other, more economical banking
products.
In 2004, the bank began offering check cashing services through a pilot program for the KeyBank
Plus Program, which involved five branches in Cleveland and soon expanded to 26 branches in
and around the Cleveland area. KeyBank currently offers check cashing in 177 branches, branded as
KeyBank Plus, in six different markets in Cleveland, Akron, Upstate New York, Colorado, and
Oregon. The program provides fee-based check cashing to non-depository clients. In three of the
markets, the fee is 1.5 percent with a $22.50 maximum fee and 1 percent in the remaining markets
with a $25 maximum fee. Since its inception, the bank has enrolled over 22,000 people and cashed
over $58 million in checks, with check size averaging about $700.
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To enable the bank to offer low-cost check cashing, KeyBank utilizes a biometric technology system
for authentication of repeat check cashing customers to expedite the process and reduce risk for
repeat check cashing customers. Enrolled check cashing customers simply swipe state-issued
identification cards (e.g., drivers’ licenses) and place their finger on a scanning device to validate
their identity for the bank teller. To use this service, customers must enroll in the program so that
their checks can be cashed quickly, usually in about a minute. Customers have reacted positively to
the authentication system because they feel it provides security for them and prevents other people
from stealing and cashing their checks at the bank. The system will also alert tellers if a particular
transaction deviates from a behavioral norm and allows the teller to determine whether or not the
check should be cashed. For example, if a customer cashed checks for $500 every two weeks over a
long period of time, the system would recognize that cashing a $1,000 check would be outside of the
normal parameters.
As KeyBank introduces check cashing services to more branches, one of the bank’s goals is to
transition unbanked and underbanked customers from check cashing to mainstream banking
products and services. However, the bank is cautious in its approach because “the reality of the
situation is that some people are only comfortable with check cashing, so we need to manage our
expectations and respect their preferences.” The bank refrains from pressuring check cashing
customers to use other banking products if they feel uncomfortable with changing the way they
handle their finances. As part of this approach, the bank also offers five free money orders for each
check cashed, which provides an affordable and convenient way for customers to pay bills without a
deposit account.
Branch managers have observed that when new customers seeking check cashing services learn that
they qualify for a checking account, the majority decide to open an account instead of cashing their
check. (The bank does not record the number of accounts opened by new customers who come to
the bank with the original intention of cashing their checks.) In addition, the bank estimates that 20
percent of its check cashing customers also have an account at KeyBank, which classifies them as
underbanked individuals. Bank employees explain that although these customers have accounts, they
may cash some of their checks because it allows for an immediate availability of funds, an advantage
relative to depositing funds in checking or savings accounts.
Currently, KeyBank cashes government and payroll checks but does not accept third-party checks,
with the possible exception of existing customers cashing checks issued by insurance companies.
The general guidance is that checks should be pre-printed, but if branch managers or personnel have
previous experience with a local employer who typically issues handwritten checks, they will permit
those checks to be cashed. Importantly, the bank does not restrict check cashing to on-us checks.
362
Case Studies
The bank reports that check cashing services have been a successful venture for KeyBank, and it has
incurred a minimal loss compared to the standard check-cashing business. Branch managers have
welcomed this approach because they view check cashing as income that feeds directly to their
bottom line. Opportunity in the market exists because managers see the potential profitability and
ability to attract new customers who would not otherwise come into the bank. Furthermore, because
the bank already had the necessary brick-and-mortar branches and personnel, it was also able to
make the business case to offer services at a lower price than traditional check cashers without major
investment. New challenges in the marketplace compel KeyBank to evaluate and evolve its products
and services, however. For instance, the state of Ohio recently passed a 28 percent interest rate cap
on payday lending. Restricting interest rates may influence unbanked and underbanked individuals’
use of payday lending and alternative service providers overall, particularly check cashing behavior.
While the implications of this new restriction have yet to be determined, it could potentially have a
positive effect on KeyBank’s check cashing volumes and service to unbanked and underbanked
populations in its Ohio markets.
Education and Outreach
KeyBank utilizes two different approaches in its efforts to reach out to the unbanked and
underbanked. To target consumers, the bank advertises in radio, buses, transit stops, community
newspapers, and neighborhood development group newsletters. To attract customers within the
vicinity of bank locations, KeyBank Plus branches announce the availability of their check cashing
service with banners stating “Check Cashing: No Account Required, ChexSystems Welcome.”
Radio remotes are also scheduled inside some branches. KeyBank also partners with faith-based
organizations, schools, and community development organizations to provide financial education
and information about products and services at the organization’s location.
On the payroll side, KeyBank utilizes a program called Key at Work to provide services to
employees of employers that are KeyBank customers. In addition to providing free checking and
savings accounts to employees, the bank also offers discounts on other bank products. For
employees who do not have, or cannot establish, a traditional bank account, the bank offers
PayWorks, a reloadable payroll card through which they can access their salary.
One of the bank’s branches has a financial education center at the location. At the center, customers
are encouraged to set financial goals and are given $250 to deposit once they achieve their goals.
The center also provides IDA education, with a focus on home purchases and eligibility for Earned
Income Tax Credits (EITC). In addition to informing people that they qualify for EITC and can
avoid refund anticipation loans (RAL), the bank also offers free tax preparation services, in
cooperation with EITC Coalitions across its footprint, when the customer opens an account. The
bank also has staff on hand to open accounts for direct deposit and to present information about
other bank products. For alternative service providers, tax season presents the most opportunities to
acquire new clients for check cashing services. Over time, the bank hopes to increase awareness in
the community so that individuals who come to the center for tax preparation services plan to set
aside 25 percent of their tax refund toward savings rather than spending the entire amount.
363
Case Studies
Future Products
KeyBank plans to offer remittance products in the future and believes that it is something that they
“need to offer” due to customer demand.
KeyBank identified that offering bill payment services, while valuable to the community, is a more
difficult endeavor for the bank. KeyBank offered utility bill payment in the past, but the service
required that tellers undertake the daunting task of aggregating and tallying a large volume of bills at
the end of each day. The bank is trying to find an alternative technology solution for bill payment,
possibly full-service kiosks located in branches.
Market Research
To gain insight into the unbanked and underbanked population, KeyBank meets regularly with local
nonprofit organizations and community development corporations and conducted several focus
groups with customers and non-customers to determine whether KeyBank’s products and services
meet the community’s needs. Findings from these research efforts helped form the bank’s outreach
efforts and measure the effectiveness of current offerings, so as to help identify successes and
concerns in the banks’ approach. Anecdotally, one focus group asked people to identify
characteristics of check cashers and bankers. Respondents described check cashers as comfortable
and familiar members of their communities and neighborhoods, while bank employees were
perceived to be corporate outsiders who did not belong to their neighborhood and made them feel
uncomfortable. To overcome client misperceptions, KeyBank encouraged unbanked customers to
come into the branch, see that they can be comfortable with branch personnel, who often live in the
community, and overcome their ideas of what the bank is and what kind of clientele the bank looks
for.
While the unbanked and underbanked had their own misperceptions of bank employees as
unwelcoming and unfamiliar, some bank employees also had their own views of check cashing
customers. Some employees had characterized these customers as less honest and less trustworthy
than mainstream, conventional account-holding customers. To combat these notions and to
improve their relationship with and understanding of customers, KeyBank’s leadership sought to
change employees’ perceptions by holding training sessions on-site.
KeyBank has also promoted research by and provided funding to other organizations. In 2007, it
sponsored a study with the Ford Foundation and the Center for Financial Services Innovation to
segment check cashing behavior, determine how likely customers would be interested in banking
products, and identify whether these preferences were due to convenience or price sensitivity. In
2007, the bank made investments in a fund that focuses on investing in technology and programs
that develop products for the underbanked.
364
Case Studies
III. Lessons Learned
Break down misperceptions on both the client and employee sides through education
and awareness. KeyBank accomplished this by identifying unbanked individuals’ misgivings
about financial institutions and their employees, addressing their concerns, and inviting them to
branches to establish a personal connection with bank staff. On the other hand, the bank also
educated its employees about check cashing customers in an effort to overcome negative
misperceptions and to facilitate respectful customer interaction that would enable the bank to
deliver value to unbanked individuals.
Check cashing clients represent a similar segment of the population as those who use
deposit accounts but have simply chosen to manage their finances in a different way.
Some prefer to use check cashers, despite the higher service fees, because they know the exact
costs involved, can receive the money tangibly and immediately, and know how much they have
available to use until they receive their next paycheck. Offering and marketing products and
services, such as check cashing, that provide the same conveniences and benefits enables banks
to provide immediate value to unbanked individuals, in addition to mechanisms for transitioning
into the financial mainstream.
Financial education is essential to help the unbanked make informed decisions. Without
knowledge of how banking products work, consumers may not be willing to deal with banks and
will continue to use traditional check cashing services.
About KeyBank
KeyBank is a nationally-chartered bank headquartered in Cleveland, Ohio. The bank was formed in
1994 through the merger of Society Corporation of Cleveland and KeyBank Albany, New York.
KeyBank has approximately 18,400 employees and 2.2 million retail, small business, and corporate
and investment clients. Its 965 branches and 1,444 ATMs are located in Alaska, Colorado, Idaho,
Indiana, Kentucky, Maine, Michigan, New York, Ohio, Oregon, Utah, Vermont, and Washington.
KeyBank is owned by KeyCorp.
Assets, $Th, as of September 30, 2008: $97,811,238
365
Case Studies
366
Case Studies
Appendix
A
Survey Instrument
A-1
Survey Instrument
A-2
Survey Instrument
OMB No.: 3064-0158
__________________________________________________________________________________________________________________________________________Expiration Date: 03-31-2011
Federal Deposit Insurance Corporation
Survey of Banks’ Efforts to Serve the Unbanked & Underbanked
Please mark any edits here
Bank Name:
Bank Holding Company:
Assets (as of Dec. 31, 2007)
Number of Deposit Branches (as reported on June 30, 2007
Summary of Deposits (Non OTS-supervised institutions) or Branch
Office Survey (OTS-supervised institutions)):
Full-Service (Brick and Mortar) Offices:
Full Service Retail (In-Store) Offices:
Limited Service Offices (Drive-thru facilities, mobile or seasonal
offices, military facilities):
Other offices:
Respondent Name:
Respondent Title:
Address:
Telephone Number:
Please return completed survey by June 6th to:
FDICsurvey@doveconsulting.com
Dove Consulting, 2 Atlantic Ave., Boston, MA 02110
(617) 482-2100 (telephone) / (617) 482-1470 (fax)
www.doveconsulting.com
_________________________________________________________________________________________________________________________________________________________________
FDIC 8200/01(3-08) Page 3
OMB No.: 3064-0158
__________________________________________________________________________________________________________________________________________Expiration Date: 03-31-2011
PUBLIC BURDEN STATEMENT
This survey collects information to fulfill a mandate in Section 7 of the Federal Deposit Insurance Reform Conforming
Amendments Act of 2005 (Pub. L, 109-173) that the FDIC conduct ongoing surveys and submit periodic reports to
Congress on efforts by insured depository institutions to bring unbanked and underbanked individuals into the
conventional finance system. The FDIC believes this survey takes an average 290 minutes per response to complete.
Send comments regarding the estimate or any other aspect of this form, including suggestions for reducing completion
time, to the Office of Management and Budget, OIRA, Washington, D.C. 20503, or the Paperwork Clearance Officer,
FDIC, 550 17th Street, N.W., Washington, D.C. 20429. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a currently valid OMB control number.
CONFIDENTIALITY NOTICE
Any information you provide will be strictly confidential. Individual responses to the survey will not be shared with the
public or the industry. The FDIC will be informed of your bank’s participation, but your responses will only be used in the
aggregate with responses from other banks to ensure the confidentiality of your submission.
SURVEY CONTACTS AND ASSISTANCE
If you have any questions or concerns about the survey, please call:
Ed Bachelder at (617) 753-9223 or FDIC contacts:
Barbara A. Ryan, Deputy to the Vice Chairman, (202) 898-3841
Angelisa M. Harris, Senior Community Affairs Specialist, Division of Supervision & Consumer Protection, (202) 898-6645
Yazmin E. Osaki, Special Assistant to the Deputy to the Vice Chairman, (202) 898-6553
_________________________________________________________________________________________________________________________________________________________________
FDIC 8200/01(3-08) Page 4
OMB No.: 3064-0158
__________________________________________________________________________________________________________________________________________Expiration Date: 03-31-2011
SURVEY INSTRUCTIONS
Your bank has been selected for the FDIC Survey of Banks’ Efforts to Serve the Unbanked & Underbanked. The
FDIC would appreciate your confidential participation in this important effort.
We have provided a few guidelines to help you complete this survey below:
1. Please review all of the survey sections first to best assess the effort and input that your bank will require to
complete the survey. FDIC ran a Pilot Test of the survey in November 2007 and most participating banks
found that they required the input of several groups or departments within their bank to successfully
complete all of the questions.
2. Please provide all responses for your bank on one copy of the survey (either in hard-copy or electronic form).
However, if policies, product & service offerings, and/or pricing structures vary significantly across your retail
bank operations, please complete a separate survey form for each entity. To limit the effort needed to
participate, large banking organizations do not need to fill out more than three surveys.
3. For an electronic MS-Word version of the survey please email Ed Bachelder at
ebachelder@doveconsulting.com.
4. Please return your completed survey to Dove Consulting in the business reply envelope provided, fax it to
617-482-1470, or email it to FDICsurvey@doveconsulting.com.
Important:
For additional survey forms or assistance please contact Ed Bachelder at (617)
753-9223 or ebachelder@doveconsulting.com
Please return your completed survey by June 6th, 2008
_________________________________________________________________________________________________________________________________________________________________
FDIC 8200/01(3-08) Page 5
OMB No.: 3064-0158
Expiration Date: 03-31-2011
SURVEY TERMS & DEFINITIONS
Term
Definition
Bank
An FDIC-insured financial institution (bank or thrift)
Bank Footprint
Census tracts in the bank’s current CRA evaluation area
Conventional Checking
Account
Checking, NOW, DDA, MMDA
Debit Card
Card linked to a transaction account
Established Customer
An individual who has had a deposit account for more than 30 days
Full-Service (Brick and Mortar)
Offices
SOD office service type code 11 (not reported in the Branch Office Survey (OTS-supervised
institutions); see fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Full-Service Retail (In store)
Offices
SOD office service type code 12 (not reported in the Branch Office Survey (OTS-supervised
institutions); see fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Limited Service Offices
SOD office service type codes 22, 23, and 29 (not reported in the Branch Office Survey (OTSsupervised institutions); see fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Low and Moderate Income
(LMI)
Low income: Income equal to or less than 50% of the median income of the local metropolitan area
(MSA) or appropriately defined rural area
Moderate income: Income from 50% to 80% of the median income of the local metropolitan area
(MSA) or appropriately defined rural area
Non-Customer
An individual who does not have a deposit account or credit relationship with your bank
Number of Deposit Branches
As of June 30, 2007, as reported in the Summary of Deposits (SOD) submitted to the FDIC or in the
Branch Office Survey (reported to the OTS by OTS-supervised institutions)
Other offices reported on the
Summary of Deposits
SOD office service type codes 13, 21, and 30 (not reported in the Branch Office Survey (OTSsupervised institutions); see fdic.gov/sod/pdf/SOD_2007_Instructions.pdf)
Prepaid Card
Not linked to a transaction account. Money can be loaded onto the card. Excludes gift cards
Savings Account
Statement savings, Passbook, Certificates of Deposit, etc.
Unbanked
Individuals who do not have an account with a depository institution (a commercial bank, savings
institution or credit union) or a transaction account with a money market mutual fund or brokerage firm
Underbanked
Individuals who have a deposit account but also rely on alternative non-bank financial service
providers (such as check cashing firms or payday lenders) for transaction or credit services
FDIC 8200/01(3-08) Page 1
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
II.
RETAIL BANK INFORMATION
Please provide the following information related to consumer accounts/cards as of December 31, 2007:
1. Number of conventional transaction accounts
(e.g., checking, DDA, NOW, MMDA):…………………………………………..
2. Number of non-transaction savings accounts:…………………………………
3. Number of entry deposit accounts* designed for
individuals not qualified for conventional accounts:…………………………...
4. Number of debit cards issued and active:……………………………………...
5. Number of prepaid cards issued and active:…………………………………...
6. Number of credit cards issued and outstanding:………………………………
Number of ATMs operated by your bank. Please indicate approximate numbers of ATMs by location and functionality:
Number
Location
Functionality
Number
Inside LMI tracts……
Basic cash dispense only………………………
Outside LMI tracts….
Basic cash dispense and deposit acceptance…
Advanced functionality with bill payment and/or
automated money order and/or prepaid card….
Total ATMs
=
Total ATMs
* “Entry deposit accounts” may include limited features designed to serve individuals with insufficient financial history or
derogatory data in ChexSystems, or similar third-party screen, needed for a conventional transaction account.
FDIC 8200/01(3-08) Page 2
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
II. EDUCATION & OUTREACH
A. Does your bank perceive that there are unbanked or underbanked populations in your market area?
Yes
No
Don’t know
B. Does your bank provide financial education materials (i.e. brochures, content on a website, etc.) aimed at the
unbanked and/or underbanked on the following topics? Mark all that apply.
Financial Education Materials
For Unbanked
For Underbanked
Basic Banking (Deposit and Credit Products)……………………….
………………………………...
Predatory /Abusive Lending Prevention………………………………
………………………………...
Savings Programs……………………………………………………….
………………………………...
Home Ownership/Mortgage Products…………………………………
………………………………...
Credit Counseling………………………………………………………..
………………………………...
Other (Explain)…………………………………………………………..
………………………………...
Bank does not provide financial educational materials for
This population (Skip to II.B.3 below)…………………………………..
1.
Please describe the types of materials provided for:
a)
Unbanked:
b)
2.
………………………………...
Underbanked:
Have the financial education materials helped to establish banking relationships with:
a)
Unbanked individuals?............. Yes……...
No………. Have not evaluated
b)
Underbanked individuals?........ Yes……...
No………. Have not evaluated
FDIC 8200/01(3-08) Page 3
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
3.
Does your bank participate in education or outreach efforts with any organizations that could bring
unbanked or underbanked individuals into the conventional banking system and/or reduce the use of
non-bank financial services providers for unbanked individuals? Examples may include: employers
who use payroll cards, government entities that use electronic benefit transfer (EBT) or prepaid
cards, faith-based groups that provide cash assistance, etc.
Yes
No
a. If yes, please describe.
C. Does your bank teach (either directly or through a third-party) financial literacy and education sessions, such as
classes or workshops, that target unbanked and/or underbanked individuals? Check all that apply.
Yes, at bank facilities
Yes, at off-premise locations
No
1. If yes, for how long has your bank been providing the sessions?
Years (Mark 0 if don’t know)
2. If yes, mark all types of sessions that your bank provides:
Basic Banking (Deposit and Credit Products)
Home Ownership/Mortgage Products
Predatory /Abusive Lending Prevention
Credit Counseling
Savings Programs
Other:
D. Did your bank conduct off-premise financial education outreach visits targeted toward the unbanked or
underbanked during calendar year 2007?
Yes
No
1.
Please indicate which locations your bank has visited for outreach sessions:
High Schools
Employer Sites
Local/State Government Sites
Community–based Organizations
Vocational Schools/Colleges
Military Installations
Public Gatherings/Fairs
Other:
FDIC 8200/01(3-08) Page 4
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
E. Does the bank work with corporate or business customers to provide services for their unbanked employees?
Yes
1.
No
If yes, does the bank offer payroll cards?
Yes
No
a) If yes, how many payroll cards has the bank issued during the year 2007?
b) Describe the features and fees associated with this card (if any).
F. Does the bank use targeted marketing (e.g., meetings with large employers, mailings, etc.) to reach unbanked and/or
Yes
No
underbanked individuals?
1. If yes, are there particular segments of the unbanked and/or underbanked population your bank is targeting?
Yes
No
2. If yes, which segments? Mark all that apply.
Working poor
Consumers on public assistance
Post disaster assistance
Urban residents
Rural residents
Immigrants
African-Americans
Hispanic-Americans
Asian-Americans
Other:
G. Does the bank have any other outreach and education programs to encourage unbanked or underbanked
consumers to open an account?
Yes
No
If yes, please describe.
FDIC 8200/01(3-08) Page 5
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
H. What are the three most effective types of financial education, outreach, and marketing programs that your bank has
used to help establish account relationships with unbanked and/or underbanked individuals? Please rank 1 to 3,
where 1 = most effective, 2 = second most effective, and 3 = third most effective.
Ranking
Programs
Advantages/Disadvantages
Financial Education Materials
Providing Financial Education Sessions
Outreach Visits
Participation in Other Organizations
Targeted Marketing
Other:
I. Has your bank identified expanding services to unbanked and underbanked individuals in your market area as a
priority in your bank’s business strategy?
Yes
No
Don’t know
J. Has your bank conducted research on unbanked or underbanked consumers in your CRA assessment area?
Yes
No
Don’t know
1. If yes, please summarize this research.
FDIC 8200/01(3-08) Page 6
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
K. What are three activities that banks could do, in general, that would be most effective in bringing unbanked
individuals and families into the conventional banking system?
1.
2.
3.
L. What challenges does your organization face in serving or targeting unbanked and underbanked individuals? Please
rank order by importance, where 1 = greatest challenge, 2 = second greatest challenge, etc.
Profitability issues
Competition from alternative service providers
Unfamiliar with this population
High cost of customer acquisition
Internal challenges
Regulatory barriers related to customer identification
Fraud concerns
Other:
M. Does your bank perceive any regulatory impediments to providing/developing specialized products and services for
unbanked or underbanked consumers?
Yes
No
1. If yes, please describe.
FDIC 8200/01(3-08) Page 7
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
III.
RETAIL BRANCH INFORMATION
A.
Does your bank offer extended, non-traditional evening and/or weekend hours at any of your bank’s
locations?
Yes
No If yes, check all that apply, and indicate typical hours:
Branch Type
Extended Weekday Evening
Hours (After 5 pm)
Saturday Afternoon
Hours (After 1 pm)
Sunday Hours
Full Service Brick and Mortar Branches
Until
pm
Until
pm
Hours
to
Full Service Retail (In-store) Branches
Until
pm
Until
pm
Hours
to
Limited Service Branches
Until
pm
Until
pm
Hours
to
B. What languages, other than English, does your branch staff use to interact with customers?
Spanish
Chinese
Vietnamese
Korean
Tagalog
Other:
C. Has the bank modified its retail operations over the past five years to make it easier or more welcoming or
convenient for unbanked or underbanked consumers to take advantage of its services?
Yes
No
1. If yes, which approaches has the bank pursued? (Check all that apply)
Extended banking hours
Non-traditional locations (community centers, supermarkets, etc.)
New branch located in LMI area
Innovative branch formats/designs (e.g. more casual lobby décor)
Internet or mobile banking
External ATMs (walk-up and through the wall)
Off-Premise ATMs
Other:
2. If yes, please describe what you have done.
FDIC 8200/01(3-08) Page 8
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
D. Please indicate efforts your bank makes as part of its branch strategy to serve the unbanked and underbanked in
your market areas:
IV.
Check cashing
Money orders
Kiosks for check cashing
Bill payment services
Prepaid card issuance and reloading
Other:
SERVICES PROVIDED TO NON-CUSTOMERS
A. If an individual does not have an account relationship with the bank, will the bank typically cash the following types of checks?
If Yes:
Type of Check
Cash Check for NonCustomer?
Is a Fee Charged?
Business check drawn on your bank (On-us)
Yes
No
Yes
No
Personal check drawn on your bank (On-us)
Yes
No
Yes
No
Business check not drawn on your bank (Local)
Yes
No
Yes
No
Payroll check not drawn on your bank (Local)
Yes
No
Yes
No
Personal check not drawn on your bank (Local)
Yes
No
Yes
No
Government check
Yes
No
Yes
No
Double endorsed check from a third-party
Yes
No
Yes
No
Typical fee per check
cashed by non-customers
Please indicate either a
fixed dollar amount or
percentage of face value
1. Please describe the bank’s concerns which may have led to limitations on transactions for non-customers.
FDIC 8200/01(3-08) Page 9
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
B. Does the training provided to the bank’s tellers and other customer service representatives include strategies for
reaching out to unbanked or underbanked consumers (e.g., encouraging individuals who do not have a transaction
Yes
No
or savings account who are cashing paychecks to open an account)?
1. If yes, please describe.
C. What forms of consumer identification or validation does the bank rely on for individuals who do not have an
account relationship to cash a check?
Identification Forms
Not Accepted as ID for
check cashing
Primary: Sufficient
alone by itself
Secondary: Insufficient alone but acceptable
with another secondary ID
Driver’s license
Yes
No
Yes
No
State-issued photo ID
Yes
No
Yes
No
Social Security number
Yes
No
Yes
No
Passport (US. or foreign)
Yes
No
Yes
No
Military ID
Yes
No
Yes
No
Student/school ID card
Yes
No
Yes
No
Employer letters/pay stub
Yes
No
Yes
No
Matrícula consular
Yes
No
Yes
No
Utility bills/payments
Yes
No
Yes
No
Housing lease
Yes
No
Yes
No
Individual Taxpayer Identification
Number (ITIN)
Yes
No
Yes
No
Other:
Yes
No
Yes
No
FDIC 8200/01(3-08) Page 10
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
1. Does the bank issue check cashing cards to individuals who do not have an account relationship?
Yes
No
2. Which of the following techniques or technology does your bank use to verify the identity of individuals who
do not have an account relationship for check cashing?
Fingerprinting
Biometrics
None
Other:
D. Which of the following transaction products/services does the bank offer to individuals who do not have an
account relationship with your bank, and what would the fees be if they were customers with established deposit
accounts?
Product/Service
Bank/official checks
Offer for NonDeposit
Customers?
Yes
No
For a Non-Customer
If a fee is a
percentage of the
If a fixed fee is
dollar amount,
charged per item
please indicate
the typical
please indicate
percentage rate
the typical fee
%
For Customer
If a fee is a
percentage of the
If a fixed fee is
dollar amount,
charged per item
please indicate
the typical
please indicate
percentage rate
the typical fee
%
Money orders
Yes
No
%
%
Domestic wire transfers
Yes
No
%
%
International remittances (not ACH)
Yes
No
%
%
International ACH transfers
Yes
No
%
%
Foreign currency exchange
Yes
No
%
%
Bill payment (e.g., utility)
Yes
No
%
%
Reloadable prepaid debit cards (Visa,
MasterCard, etc.)
Yes
No
%
%
1. For any of the services above, does your bank offer lower prices for customers as an incentive to open an
account?
Yes
No
FDIC 8200/01(3-08) Page 11
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
E. Is your bank concerned about offering remittances due to regulatory requirements?
Yes
No
1. If yes, please describe any regulatory concerns you may have in offering this product.
V.
ACCOUNT OPENING & ONBOARDING PROCESS FOR NEW CUSTOMERS
A. What forms of government-issued identification does the bank accept as part of the new account opening process?
Driver’s license
US or Foreign Passport
Social Security number
Matricula consular
State-issued ID card
ITIN
Military ID
Other:
B. Which, if any, of the following alternative sources of information does the bank accept to verify a prospective
deposit customer’s identity?
Utility bills/payments
Housing lease
Employer letters/pay stub
Other:
None
C. What account screening and risk management tools are used for new deposit accounts?
ChexSystems/Qualifile
Early Warning Services (formerly Primary Payment Systems)
OFAC Lists
Credit Bureau Reports
None
Other:
FDIC 8200/01(3-08) Page 12
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
D. Can a new customer open a deposit account without the bank screening the customer using ChexSystems or a
similar third-party screen being used by the bank?
Checking account:……………
Yes…….
No
Savings account:……………..
Yes…….
No
E. If an applicant screening process returns a negative hit, what is the bank’s policy regarding account
opening/overrides?
Application is automatically rejected
Account opening decision is made at the discretion of the new account representative
Account opening decision is made at the discretion of the branch manager
Application is submitted to a centralized back office for review
Other:
F. Does the bank use credit report or bureau scores as part of its screening process for new checking accounts?
Yes
No
G. What are the top three most common reasons that a new account application is declined? Please rank the
three most common reasons 1 to 3, where 1 = the most common reason, 2 = the second most common reason, and 3
= the third most common reason.
Insufficient identification information
Negative account screening hit due to prior account closure or mismanagement
Negative account screening hit due to potential fraud alert
No credit score/Insufficient credit history
Low credit score/ or poor credit record/credit history
Insufficient initial deposit
Other 1:
Other 2:
FDIC 8200/01(3-08) Page 13
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
H. If a new account applicant does not qualify for a conventional checking account, does the bank offer any entry
deposit accounts designed for individuals not qualified for conventional accounts that can serve as a
‘stepping stone’ account (e.g., an account with debit card access but no check writing)?
Yes
No
1. If yes, please describe the alternative account(s) offered. Include information related to products, transaction
restrictions, fees, etc.
If possible, please include a copy of the product description or marketing brochure for any alternative
accounts
Account A:
Date Introduced:
Account B:
Date Introduced:
Account C:
Date Introduced:
FDIC 8200/01(3-08) Page 14
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
VI. DEPOSIT PRODUCTS
A. Does the bank’s most basic or entry level checking account have a minimum balance requirement?
Yes
No, but only with direct deposit
No
1. If minimum balance is required, what is the minimum balance?
$
with direct deposit / $
without direct deposit
2. If minimum balance is not required, what other fees apply?
$
with direct deposit / $
without direct deposit
B. For the most basic transaction deposit account, what payment options are included/available?
Product
Included at
No Cost
Available
for a Fee
Not
Offered
Monthly Fee
(if applicable)
Per-Transaction
Fee
(if applicable)
Check writing
$
$
ATM card (PINonly)
$
$
Debit card signature
(Visa/MasterCard)
$
$
Online bill payment
$
$
C. Does the bank charge a per-item NSF fee on its most basic (lowest cost) transaction account?
Yes
No
1. If yes, what is the standard or typical NSF fee for this account? $
2. Does the bank offer any programs to cover or waive NSF items on this account?
Yes
No
a) If yes, please describe:
FDIC 8200/01(3-08) Page 15
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
3. Does the bank offer ‘alerts’ to notify customers with these accounts of low balances or NSF transactions on
this account?
Yes
No
4. Will the bank automatically close this account if a threshold number of NSF items are reached or there is a
persistent negative balance?
Yes
No
a) If yes, what is the monthly threshold?
/month
VII. SAVINGS ACCOUNTS
A. For savings accounts with balances of $500 or less, which, if any, of the following accounts are offered and what are
the interest rates paid on the accounts?
Product/Service
Offer for Customer?
Interest Rate Offered (as of Dec.
31, 2007)
Basic Savings (non-transactional)
Yes
No
%
Individual Development Accounts
Yes
No
%
IRS VITA Program (direct deposit or split refund)
Yes
No
%
Money Market Deposit Accounts
Yes
No
%
Specialized Savings Clubs
Yes
No
%
Workplace-based Programs
Yes
No
%
Other (please describe):
Yes
No
%
B. Does the bank partner with organizations (e.g., by operating a high school branch or employer location) to promote
savings products?
Yes
No
If yes, please describe:
FDIC 8200/01(3-08) Page 16
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
VIII. PAYMENT PRODUCTS
A. How soon (in terms of number of business days), beyond the $100 specified by Reg. CC, are funds ordinarily
available for an established customer who presents the following items?
Current
Business Day
Check value is $2,500 or less
Next
Business
Day
Second
Business
Day
Three or More
Business
Days
Business check drawn on your bank (On-us)
Personal check drawn on your bank (On-us)
Payroll check not drawn on your bank (Local)
Business check not drawn on your bank (Local)
Personal check not drawn on your bank (Local)
Government check
Double endorsed check from a third-party
B. Can a customer get an ‘advance loan’ on the funds from a deposited check or a regularly scheduled direct deposit
(excluding all programs to cover overdrafts and NSF transactions)?
Yes, accelerated availability of deposited check
Yes, advance for a scheduled direct deposit
1. Up to what dollar or percentage amount will the bank typically advance? $
2. What fee is charged for the advance? $
flat advance fee or
or
No
%
% of the amount advanced.
3. What types of checks/deposits qualify for advances?
All checks
Business checks, but not personal checks
Government checks
Payroll checks only
Regularly scheduled direct deposits
Other:
FDIC 8200/01(3-08) Page 17
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
IX. CREDIT PRODUCTS
A. Does the bank typically offer unsecured closed-end personal loans up to $5,000?
Yes
No
1. If yes, what are the eligibility requirements?
Deposit relationship with the bank
Direct deposit
Proof of income
Minimum credit score
Review credit history
Other:
2. If yes, please indicate the following:
Typical
Minimum
Loan Size
Maximum
Loan Size
Origination
Fee
Acct.
Maintenance Fee
Minimum
APR
%
Maximum
APR
Maximum
Term (Mos)
APR
%
%
3. How long does it typically take to originate an unsecured closed-end personal loan?
Less than 30 minutes
Less than 24 hours
Less than 48 hours
More than 48 hours
B. Does the bank offer affordable small dollar loans (i.e., less than $1,000/at least a 90-day repayment term/less than
36% APR/no or low fees)?
Yes
No
1. Please describe any innovative products the bank has developed to provide small dollar loans to customers.
(For example, applying for a six-month loan at an ATM.)
C. Does the bank offer tax refund anticipation loans?
Yes
No
1. If yes, please indicate the following:
Minimum
Loan Size
Maximum
Loan Size
Origination
Fee
Acct.
Maintenance Fee
Minimum
APR
%
Maximum
APR
%
Typical
APR
Maximum
Term (Mos)
%
FDIC 8200/01(3-08) Page 18
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
D. Does the bank offer consumer credit cards (e.g. Visa, MasterCard)?
Yes
No
1. If yes, what is required for someone to qualify for a traditional credit card? (Check all that apply)
Social Security number
history
Minimum credit score
Proof of income
Review of credit
Other:
2. If yes, for your ‘basic’ credit card, please indicate the following:
Initiation
Fee
Annual
Fee
Acct.
Maintenance
Fee
Late
Payment
Fee
Over the
Limit
Fee
Typical
Credit
Limit
Minimum
APR
%
Maximum
APR
Typical
APR
%
Maximum
Term
(Months)
%
3. Does having a deposit account with the bank improve a customer’s ability to receive a credit card?
Yes
No If yes, how?
4. Does the bank offer secured credit cards for established customers who do not qualify for a traditional credit
Yes
No If yes, please indicate the following:
card?
Minimum
Credit
Score
Initiation
Fee
Annual
Fee
Acct.
Maintenance
Fee
Late
Payment
Fee
Over the
Limit Fee
Typical
Credit
Limit
Minimum
APR
%
5. Can a cardholder ‘graduate’ from a secured credit card to a traditional credit card?
Maximum
APR
Typical
APR
%
Yes
%
No
a) If yes, how?
FDIC 8200/01(3-08) Page 19
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
Thank you for taking the time to complete this survey.
We appreciate your participation and input.
Please return completed survey by June 6
t h
to:
FDICsurvey@doveconsulting.com
Dove Consulting, 2 Atlantic Ave., Boston, MA 02110
(617) 482-2100 (telephone) / (617) 482-1470 (fax)
www.doveconsulting.com
FDIC 8200/01(3-08) Page 20
OMB No.: 3064-0158
Expiration Date: 03-31-2011
STRICTLY CONFIDENTIAL. Responses to the survey will not be shared with the public or the industry. Responses will be aggregated to ensure confidentiality.
FDIC 8200/01(3-08) Page 21
Appendix
B
Retail Bank and Deposit Summary
Statistics
Retail Bank Information
As previously mentioned, the data represent a substantial percentage of retail branch operations and
consumer banking services in the United States.
Responding banks operate 43,761 deposit branches, which represent about half of the bank
offices at the time the sample was drawn.
Responding banks have collectively deployed 21,325 ATMs of their total 85,164 ATMs inside
LMI tracts—about 1 in 4 of their ATMs.
The responding banks report that they have 133.4 million conventional transaction accounts and
78.7 millions savings accounts. Dove Consulting does not have any data on the income
distribution of account holders.
Banks report that they have opened 880,725 entry level deposit accounts for individuals who
applied to open an account but did not otherwise qualify for a conventional account. This
number of accounts suggests that there is a substantial gap between the ratio of unbanked to
banked individuals (1 in 10) and the ratio of entry level deposit accounts to conventional
transaction and savings accounts (1 in 240).
The responding banks collectively have issued 70 million debit cards, 57.7 millions credit cards
and 22 million open-loop prepaid debit cards.
The following tables provide a perspective on the characteristics of participating banks.
Figure 1.
Bank Size (Assets)
Assets (in 000s) June 30, 2007
N
Valid
Missing
Mean
Median
Frequency
Weighted
683
7433
2
7
$11,961,677.89
$1,622,680.99
$209,990.00
$149,895.00
The data relating to the asset sizes of different segments below is not weighted: these data
summarize the asset-size of responding banks and are not estimates of universe statistics. There is a
difference between tiers for bank asset size, which reflects that tiers are defined by asset size. The
mean asset size for the 24 Tier 1 banks is $299 billion. The mean for the 157 responding Tier 2
banks is $5.55 billion, and the mean for the 502 Tier 3 banks is $226 million. Tier 3 banks account
B-1
Retail Bank and Deposit Summary Statistics
for 73% of survey responses; median asset size of Tier 3 banks is $137 million, which is less than the
mean asset size of $226 million.
Figure 2.
Tier 1: Bank Size
Assets (in 000s)
N
Valid
Missing
Mean
Median
24
Missing
0
502
0
$299,358,348.88
Mean
$226,064.12
$112,994,020.50
Median
$137,280.00
Figure 3.
Tier 2: Bank Size
Assets (in 000s)
N
Valid
Missing
Figure 4.
Tier 3: Bank Size
Assets (in 000s)
N
Valid
157
2
Mean
$5,552,493.23
Median
$1,969,799.00
Although there is little difference between regions for bank asset size, the New England region has
the smallest banks by asset size, with a mean of $1.75 billion and a median of $381.9 million.
The South Atlantic region has the largest banks by mean asset size.
Figure 5. New England Division: Bank Size
Assets (in 000s)
N
Valid
Figure 9. West South Central Division: Bank Size
Assets (in 000s)
38
Missing
Mean
N
0
Mean
$381,946.00
Valid
Mean
N
0
Mean
$913,943.00
Valid
Missing
Mean
79
N
1
Missing
Mean
Median
Valid
Mean
$241,329.00
Valid
$249,230.00
113
Missing
0
$5,532,446.43
Median
Figure 8. East South Central Division: Bank Size
Assets (in 000s)
N
2
Figure 11. West North Central Division: Bank Size
Assets (in 000s)
$33,599,103.04
Median
125
$19,930,661.17
Median
Figure 7. South Atlantic Division: Bank Size
Assets (in 000s)
N
Valid
Missing
$8,294,579.27
Median
$194,490.00
Figure 10. East North Central Division: Bank Size
Assets (in 000s)
65
Missing
0
$1,740,213.49
Median
Figure 6. Middle Atlantic Division: Bank Size
Assets (in 000s)
N
105
Missing
$1,750,995.79
Median
Valid
$98,907.00
Figure 12. Mountain Division: Bank Size
Assets (in 000s)
60
N
0
Valid
Missing
$3,757,903.03
Mean
$212,088.50
Median
B-2
44
0
$29,413,698.11
$194,756.50
Retail Bank and Deposit Summary Statistics
Figure 13. Pacific Division: Bank Size
Assets (in 000s)
N
Valid
Missing
Mean
55
0
$3,917,750.80
Median
$947,367.00
There is a difference between urban and rural banks’ asset sizes. The median urban bank asset size is
$504.5 million, compared with $120.6 million for rural banks.
Figure 14.
Urban: Bank Size -- Unweighted
Assets (in 000s)
N
Valid
375
Missing
Mean
3
$21,823,307.70
Median
$504,475.00
Figure 15.
Rural: Bank Size -- Unweighted
Assets (in 000s)
N
Valid
309
Missing
0
Mean
$358,087.21
Median
$120,642.00
B-3
Retail Bank and Deposit Summary Statistics
Deposit Branches
Survey respondents report that they operate 42,971 branch offices, including 37,507 full service
branches, 2,945 full service offices, and 1,945 limited service offices. The following tables show
response-adjusted weighted results by subgroup.
Figure 16.
N
Overall Branch Statistics
Valid
Missing
Unweighted Sum
Weighted Sum
Weighted Median
Total Number
of Deposit
Branches
681
Full Service
Offices
649
Full Service
Retail Offices
649
Limited
Service
Offices
648
Other Offices
644
4
36
36
37
41
42,971
37,507
2,945
1,945
286
12.39
11.24
.76
.65
.15
4.00
3.00
.00
.00
.00
There is a difference between tiers for the number of all types of branches/offices. Tier 1 banks
have a higher mean across all office types, compared to Tier 2 and Tier 3 banks.
Figure 17.
N
Tier 1: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Figure 18.
N
Total Number
of Deposit
Branches
25
Full Service
Offices
25
Full Service
Retail Offices
25
Limited
Service
Offices
25
Other Offices
24
0
0
0
0
1
1,389.21
1,220.54
98.04
64.50
7.30
900.50
874.00
19.00
16.50
2.00
Tier 2: Branch Statistics -- Weighted
Valid
Missing
Total Number
of Deposit
Branches
544
Full Service
Offices
524
Full Service
Retail Offices
524
Limited
Service
Offices
524
Other Offices
513
7
28
28
28
38
Mean
46.59
41.44
3.36
1.60
.48
Median
30.00
28.00
.00
.00
.00
Very few banks in Tier 3 have retail offices, limited service offices, or other offices.
Figure 19.
Tier 3: Branch Statistics -- Weighted
Total Number
of Deposit
Branches
6836
Full Service
Offices
6481
Full Service
Retail Offices
6481
27
383
Mean
4.63
Median
3.00
N
Valid
Missing
Limited
Service
Offices
Other Offices
6467
6467
383
396
396
4.13
.18
.33
.10
3.00
.00
.00
.00
B-4
Retail Bank and Deposit Summary Statistics
There are few differences among regions for the number of all types of branches and offices. The
following tables are provided for reference only.
Figure 20.
N
New England Division: Branch Statistics -- Weighted
Valid
Missing
Total Number
of Deposit
Branches
432
Full Service
Offices
374
Full Service
Retail Offices
374
Limited
Service
Offices
374
Other Offices
374
14
72
72
72
72
Mean
7.57
7.70
.85
.19
.16
Median
5.00
5.00
.00
.00
.00
Full Service
Retail Offices
522
Limited
Service
Offices
509
Other Offices
522
Figure 21.
N
Middle Atlantic Division: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Figure 22.
N
Median
Full Service
Offices
522
0
58
58
72
58
17.57
17.67
.37
.61
.16
9.24
9.00
.00
.00
.00
South Atlantic Division: Branch Statistics -- Weighted
Valid
Missing
Mean
Total Number
of Deposit
Branches
581
Total Number
of Deposit
Branches
860
Full Service
Offices
819
Full Service
Retail Offices
819
Limited
Service
Offices
819
Other Offices
819
0
41
41
41
41
21.49
20.45
.98
.62
.32
4.00
4.00
.00
.00
.00
B-5
Retail Bank and Deposit Summary Statistics
Figure 23.
N
East South Central Division: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Figure 24.
N
Total Number
of Deposit
Branches
683
Full Service
Offices
638
Full Service
Retail Offices
638
Limited
Service
Offices
638
Other Offices
638
0
44
44
44
44
10.81
10.43
.21
.70
.07
3.00
3.00
.00
.00
.00
Full Service
Retail Offices
1163
Limited
Service
Offices
1163
Other Offices
1163
West South Central Division: Statistics -- Weighted
Valid
Missing
Total Number
of Deposit
Branches
1177
Full Service
Offices
1163
0
14
14
14
14
Mean
8.98
7.56
.62
.57
.24
Median
4.00
3.00
.00
.00
.00
Limited
Service
Offices
1206
Other Offices
1191
Figure 25.
N
East North Central Division: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Figure 26.
N
Total Number
of Deposit
Branches
1295
Full Service
Offices
1206
Full Service
Retail Offices
1206
21
110
110
110
124
16.33
14.17
1.14
1.24
.08
4.00
3.00
.00
.00
.00
West North Central Division: Branch Statistics -- Weighted
Valid
Missing
Total Number
of Deposit
Branches
1410
Full Service
Offices
1383
Full Service
Retail Offices
1383
Limited
Service
Offices
1383
Other Offices
1379
0
27
27
27
31
Mean
7.04
5.89
.69
.52
.03
Median
3.00
2.00
.00
.00
.00
Figure 27.
Mountain Division: Branch Statistics -- Weighted
Full Service
Retail Offices
480
Limited
Service
Offices
480
Other Offices
480
N
Valid
Missing
Total Number
of Deposit
Branches
507
Full Service
Offices
480
0
27
27
27
27
Mean
8.36
7.89
.59
.43
.18
Median
3.00
3.00
.00
.00
.00
B-6
Retail Bank and Deposit Summary Statistics
Figure 28.
N
Pacific Division: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Total Number
of Deposit
Branches
461
Full Service
Offices
444
Full Service
Retail Offices
444
Limited
Service
Offices
444
Other Offices
437
0
17
17
17
24
14.19
12.72
1.33
.36
.25
4.00
4.00
.00
.00
.00
The mean number of total branches and specific types of branches is higher for urban banks than
the mean for rural banks. This information indicates that banks headquartered in urban areas tend to
have more branches than rural banks.
Figure 29.
N
Urban: Branch Statistics -- Weighted
Valid
Missing
Mean
Median
Figure 30.
N
Total Number
of Deposit
Branches
3460
Full Service
Offices
3196
Full Service
Retail Offices
3196
Limited
Service
Offices
3183
Other Offices
3188
21
284
284
298
292
20.70
19.31
1.42
.92
.26
4.00
4.00
.00
.00
.00
Total Number
of Deposit
Branches
3946
Full Service
Offices
3833
Full Service
Retail Offices
3833
Limited
Service
Offices
3833
Other Offices
3816
Rural: Branch Statistics -- Weighted
Valid
Missing
14
127
127
127
144
Mean
5.10
4.50
.21
.43
.06
Median
3.00
3.00
.00
.00
.00
B-7
Retail Bank and Deposit Summary Statistics
B-8
Retail Bank and Deposit Summary Statistics
| File Type | application/pdf |
| File Title | Microsoft Word - FDICBankSurvey_Report_204pjg.doc |
| Author | pgill |
| File Modified | 2009-02-04 |
| File Created | 2009-02-04 |