Dec 22 -- The Department of the Treasury (Treasury) invites public input to inform its development of a national strategy for financial inclusion. This request for information (RFI) offers the opportunity for interested individuals and organizations to identify opportunities to advance financial inclusion through policy, government programs, financial products and services, technology, and other tools and infrastructure. Written comments and information are requested on or before February 20, 2024.
The Financial Services and General Government Appropriations Act, 2023 (FSGG), enacted December 29, 2022, directed Treasury to develop a national strategy to improve financial inclusion. Specifically, the FSGG tasked Treasury with developing a strategy to broaden access to financial services among underserved communities and improve the ability of such communities to use and benefit from financial tools and services. The FSGG stated that “the strategy should establish national objectives for financial inclusion, set benchmarks for measuring progress, and offer recommendations for how public policy, government programs, financial products and services, technology, and other tools and infrastructure can advance financial inclusion.”
Treasury intends for the strategy to identify clear and actionable opportunities for the public, private, and nonprofit sectors to advance financial inclusion. Treasury is therefore seeking information and recommendations from all interested parties for the purpose of advancing financial inclusion through policy, government programs, financial products and services, technology, and other tools and market infrastructure. Treasury is committed to including a broad range of perspectives in efforts to promote financial inclusion and is particularly interested in the views and needs of underserved communities.
Households rely on consumer financial products and services, from transaction accounts to mortgages, to meet their financial needs and goals. However, historic and ongoing discrimination, exclusion, and disparate treatment have resulted in significant disparities in access to and use of financial products and services across different populations and communities, including low-income and low-wealth communities, Black, Indigenous, (and) People of Color or BIPOC communities, and women. Improving inclusion in the financial system is a critical part of fostering financial security, expanding opportunities to build wealth, and closing the racial wealth gap.
While definitions of “financial inclusion” vary, conventional interpretations of the term often center around accessibility, indicating that financial inclusion pertains to access to core financial products and services like bank accounts, credit, and digital payments. Beyond access, the term can also be used in ways that incorporate considerations of the affordability, utility, safety, sustainability, and suitability of financial products and services. Financial inclusion can involve things other than specific products or services, such as financial information or education that helps consumers learn how to access and use financial products, or to avoid frauds, scams, and other predatory financial practices. The interpretation of the term is also influenced by the unique socioeconomic, cultural, and regulatory context in which the term is used. Financial inclusion is often associated with other areas more broadly related to the status of consumer finances, including financial well-being and financial health, among others.
The ability to access and use financial products and services can confer significant benefits to consumers. At the household level, access to financial products and services enhances households' ability to make payments, save, and borrow, helping to facilitate full participation in the economy and the ability to both manage day-to-day needs and navigate financial shocks or emergencies. Certain financial products and services also play a central role in facilitating individual and household financial security and wealth; for example, financing for businesses or educational opportunities can help generate future financial benefit. Financial inclusion can meaningfully enhance consumers' ability to transact and save, as well as enable investments that bolster income and wealth, which can ultimately have positive impacts on the overall economy.
The United States has well-established financial infrastructure which provides many consumers with broad access to financial products and services. A commonly cited measure relating to the state of financial inclusion and access to financial services is the unbanked rate, the share of households without a checking or savings account at a bank or credit union. The most recent 2021 FDIC National Survey of Unbanked and Underbanked Households found that an estimated 4.5 percent, or 5.9 million, of all U.S. households were unbanked, the lowest since the survey began in 2009. Recent data from the Federal Reserve Board indicates that in 2022, 82 percent of all adults reported having a credit card, and the majority of adults who applied for credit were approved for the amount they requested.
However, there are significant disparities in how well the financial system functions for different populations and communities. Low-income and low-wealth communities, racial and ethnic minorities, Native and Tribal communities, people with disabilities, women, LGBTQI communities, immigrants, individuals with limited English proficiency, justice-involved individuals, and other underserved individuals and groups experience differences in access to the financial system and use of financial products and services, with consequences for their economic security and wealth-building capacity. These disparities relate to historic and intentional exclusion from the financial system, ongoing forms of discrimination and predatory practices, and other barriers. . . .
There are many reasons that individual consumers may face barriers accessing or using traditional financial products and services, and the challenges different communities face are diverse. Further, while some consumers may have the ability to access traditional financial products and services, they may prefer to manage their financial needs through other means. In 2021, unbanked households' most-cited reasons for not having a bank account were account fees and minimum balance requirements, as well as concerns over privacy and lack of trust in banks. In addition to financial precarity, some of these concerns may relate to legacies of historic mistreatment of certain communities by the financial system, and to ongoing forms of discrimination.
New developments in the provision of financial products and services have implications for financial inclusion. . . .
Request for Information: Treasury welcomes input on any matter that commenters believe is relevant to Treasury's efforts to develop a national strategy for financial inclusion. . . .
A. Defining Financial Inclusion . . .
B. Barriers to Financial Inclusion . . .
C. Measuring Financial Inclusion . . .
D. Actions To Promote Financial Inclusion . . .
E. Other Topics Related to Financial Inclusion . . .
FRN:
https://www.federalregister.gov/d/2023-28263
Treasury press release:
https://home.treasury.gov/news/press-releases/jy2012