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Addressing Unbanked/Underbanked Challenges Requires Multifaceted Approach, According to New Report

NEW YORK – A new report, Delivering Financial Products and Services to the Unbanked and Underbanked in the United States – Challenges and Opportunities, from six trade groups outlines the obstacles and viable solutions for improving financial inclusion, providing access to bank accounts to the unbanked population in the United States, which currently represents approximately 6% of U.S. households, and for reducing utilization of high-cost non-bank financial products and services. 

The paper identifies the chief reasons for individuals being unbanked/underbanked and highlights existing actions from banks, credit unions, non-profits, and policymakers that have shown promise in addressing the challenge of bringing individuals more fully into the banking system. The paper also makes recommendations that policy makers should consider moving forward. The paper is authored by The Clearing House, the American Bankers Association, the Consumer Bankers Association, the Credit Union National Association, the Mid-Sized Bank Coalition of America, and the National Bankers Association.

“Financial inclusion and access to bank accounts and services is a key priority of banks and credit unions and an important shared goal of the private, nonprofit, and government sectors,” said Rob Hunter, Deputy General Counsel of The Clearing House. “While there is much more work to be done, we are pleased that the percentage of unbanked U.S. households has steadily declined over the past decade. The recommendations set forth in the paper are aimed at expanding that progress.” 

The report concludes that instead of establishing a large, duplicative and potentially expensive banking infrastructure to create bank accounts through the Federal Reserve or the U.S. Postal Service (postal banking), there are more effective and less costly ways to address the unbanked/underbanked challenge, including:

  • Verifiable Identification: Verifiable identification is unavailable to many unbanked/underbanked individuals. Public policy makers should focus on this obstacle, as well as other factors that the private sector cannot address that contribute to the unbanked and underbanked challenge.
  • Encourage New Bank Accounts: When enrolling recipients in direct payment government benefit programs, individuals should be encouraged to open basic, low-cost bank accounts.
  • Public/Private Partnerships: Public policy should encourage public/private partnerships to continue to innovate and meet the changing needs of households and individuals, including continuing to advance targeted financial education and messaging on ways in which a bank account can meet an individual’s current needs.
  • Continue Successful Programs: The banking industry should continue its efforts to reduce the percentage of unbanked households by embracing approaches with a proven track record of success, such as the Bank On initiative which promotes basic low-cost accounts.
  • Expand Broadband Access: Expanding broadband internet access to underserved areas allows individuals to better leverage digital banking services, which are the most convenient way to engage with unbanked/underbanked households. 
  • Continued Examination of Unbanked Trends: Public policy makers should examine the factors that contributed to the sharp decline in the unbanked rate for Black and Hispanic households from 2015 to 2019 and the underlying reasons for continued observed racial disparity and the successful practices of Minority Depository Institutions and Community Development Financial Institutions for reaching financially underserved communities.

“This report details not just how many households are unbanked, but why,” said Naomi Camper, ABA Chief Policy Officer. “It underscores why ABA continues to urge every bank in the country to offer Bank On-certified accounts, which are helping to bring more people into the banking system. With a Bank On-certified account, consumers can feel confident that banks want their business and can provide them with a low-cost, insured account that offers all the economic opportunities that come with being banked.” 

“This research underscores how important it is to remove barriers to financial access for the unbanked and underserved,” said Ryan Donovan, Chief Advocacy Officer for the Credit Union National Association. “For over 100 years, America’s credit unions have promoted thrift and provided access to credit for provident purposes. We look forward to working with policymakers to apply these findings and explore meaningful solutions that improve financial well-being for everyone.”

“The nation’s leading banks are uniquely positioned and committed to help ensure all Americans have access to safe and sound financial products,” Richard Hunt, Consumer Bankers Association President and CEO. “This report outlines important policies and products that have successfully banked the unbanked and reaffirms the important role financial institutions can play to achieve this goal. CBA and our member banks will continue to advocate for equitable services and solutions that provide more communities the financial tools they need to prosper.”

The full paper can be accessed here.

About The Clearing House Association
The Clearing House Association is a nonpartisan advocacy organization that represents the interests of its member banks by developing and promoting policies to support a safe, sound, and competitive banking system that serves customers, communities, and economic growth. Learn more at

About American Bankers Association
The American Bankers Association is the voice of the nation’s $21.2 trillion banking industry, which is composed of small, regional, and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits, and extend nearly $11 trillion in loans. Learn more at

About Consumer Bankers Association
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually.

About Credit Union National Association
The Credit Union National Association, Inc. (CUNA) is the largest trade association in the United States serving America’s credit unions and the only national association representing the entire credit union movement. CUNA represents nearly 5,300 federal and state credit unions, which collectively serve more than 120 million members nationwide. CUNA’s mission in part is to advocate for responsible regulation of credit unions to ensure market stability, while eliminating needless regulatory burden that interferes with the efficient and effective administration of financial services to credit union members.

About Mid-Sized Bank Coalition of America
The Mid-Size Bank Coalition of America (MBCA) is a distinct, singularly-focused “self-help” alliance representing the Nation’s mid-size banks that has the direct involvement of each of its member banks’ CEOs and most of their management committee members. Our members include over 95% of all banks with assets between approximately $10 and $100 billion. Coalition banks are a leading source of lending and investment on America’s Main Streets serving millions of consumers, households, and businesses in communities throughout the country.

About National Bankers Association
Since its founding in 1927, the National Bankers Association has served as a voice for Black and other minority-owned banks. Now, with membership that includes Hispanic-American, Asian-American, Native-American, and women-owned banks, our reach extends across the country. We believe strongly in advocating for not only our member banks, but also the communities they serve. Our members help low and moderate-income communities, and they are committed to providing economic revitalization to families in those neighborhoods. Many of our member institutions have become banks of last resort for consumers and businesses who are underserved by traditional banks and financial service providers.

Media Contacts:
Greg MacSweeney
The Clearing House


Mike Townsend
American Bankers Association

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