MESSAGE FROM THE CHAIRMAN 

MESSAGE FROM 

THE CHAIRMAN 

Communities across the United 

States and our banking system 

have weathered enormous 

challenges over the course of 

the continuing global pandemic. 

In response to the economic 

and market volatility that 

ensued, the FDIC undertook a 

broad array of swift actions to 

maintain stability and public 

confidence in the nation’s 

banking system. We focused on 

providing necessary flexibility to 

both banks and their customers 

– particularly the most heavily

affected individuals and

businesses – while maintaining 

the safety and soundness of the 

banking system. Throughout 

this period, the FDIC’s 

supervisory activities and other 

essential functions continued.

Our nation’s banks manifested 

resilience despite the persistent 

challenges of the pandemic. They have continued to support individuals and businesses 

through lending and other financial intermediation and by distributing financial support 

provided by the federal government. 

During 2021, the FDIC continued to respond to the economic risks related to the pandemic in 

order to support our banking system’s ability to serve as a source of strength for Americans 

and to meet their financial needs. This Annual Report discusses these efforts in detail, 

describing our supervision and consumer protection activities, efforts to grow the deposit 

insurance fund and enhance our resolution readiness, in addition to providing information 

about FDIC finances, budget, and spending. 

This Annual Report also provides a brief view into the forward-looking initiatives we have 

undertaken in 2021, many of which have been a focus of my chairmanship from the beginning. 

Top among these have been the FDIC’s focus on novel ways to tackle the issues of broadening 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

financial inclusion and enhancing the competitiveness of our community banks. In addressing 

both of these goals, we have pushed ourselves to think outside the box regarding how the 

FDIC can use its authorities and platform to create a regulatory system that will help achieve 

these goals. 

Reaching the “Last Mile” 

of Unbanked Americans 

Expanding economic inclusion has been a priority during my tenure as Chairman. The 

pandemic further exacerbated the urgency of expanding access to banking products among 

the most vulnerable Americans. 

The FDIC has seen meaningful improvements in recent years in reaching the “last mile” 

of unbanked households in this country. Based on the results of our biennial survey of 

households, the proportion of U.S. households that were banked in 2019 – 94.6 percent – was 

the highest since the survey began in 2009. 

Notwithstanding these improvements, we recognize that much remains to be done. Our 

survey also showed that 7 million households do not have a banking relationship with which 

to deposit their checks or to save for unexpected expenses. Also noteworthy is that the 

proportion of Black and Hispanic households who do not have a checking or savings account 

at a bank remains substantially higher than the overall “unbanked” percentage. 

As the FDIC considers additional ways to facilitate a more inclusive banking system, we 

recognize the tremendous benefits that financial innovation can deliver to consumers, 

including in the areas of payments and credit. When responsibly managed and regulated, new 

technologies have the potential to bring more people into the banking system, provide access 

to new products and services, and lower the cost of credit. 

To address these challenges, the FDIC is taking a multi-pronged, novel approach. In 2021, our 

Office of Innovation – FDITECH – announced a tech sprint to explore new technologies and 

techniques that would help expand the capabilities of community banks to meet the needs of 

unbanked households. This tech sprint was a public challenge to banks, non-profits, private 

companies, and others to help us reach that “last mile” of unbanked Americans. Specifically, 

the FDIC asked participants to answer the following question: “Which data, tools, and other 

resources could help community banks meet the needs of the unbanked in a cost-effective 

manner, and how might the impact of this work be measured?” Teams came together for a 

demonstration day and presented their proposed solutions in September. 

Alongside our fellow regulators, in 2021 we issued an interagency request for information 

on financial institutions’ use of artificial intelligence, asking whether additional regulatory 

clarity would be helpful. Alternative data and artificial intelligence can be especially useful 

for small businesses, such as sole proprietorships and smaller companies owned by 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

women and minorities, which often do not have a long credit history. Novel measures 

of creditworthiness, like income streams, can help to provide critical access to capital, 

particularly in difficult times. 

We continued to leverage our Money Smart financial education curriculum during this past 

year and the 1,500-plus organizations that are part of our Money Smart Alliance to empower 

consumers with information about personal finance. 

We further conducted a targeted public awareness pilot campaign, #GetBanked, in Atlanta 

and Houston to inform consumers about the benefits of developing a relationship with a 

bank. Having a basic checking account can be an important first step to becoming part of 

the financial fabric of this country and we are pleased that an increasing number of banks are 

offering low-cost and no-fee accounts that work for people with limited means. 

Minority Depository Institutions 

One of our most recent achievements is the launch of the Mission-Driven Bank Fund, which 

we announced in September. Based on my conversations with many Minority Depository 

Institutions (MDIs) and Community Development Financial Institutions (CDFIs) early in my 

tenure, I learned that what these institutions need most is capital. I challenged the FDIC to 

come up with a framework that would match these banks with investors interested in the 

particular challenges and opportunities facing those banks and their communities. We are 

pleased that Microsoft and Truist Financial Corporation are the anchor investors in this new 

fund, and Discovery, Inc. will become a founding investor. Combined, these investors are 

pledging $120 million to support mission-driven banks and the communities they serve, with 

additional investments expected in the coming months. The fund will support MDIs and CDFIs 

to build size, scale, and capacity that will, in turn, allow them to provide affordable financial 

products and services to individuals and businesses. The FDIC will not manage the fund, 

contribute capital to the fund, or be involved in the fund’s investment decisions. 

Our longstanding support for MDIs has also included technical assistance, banker roundtables, 

and facilitating partnerships. In more recent years, the FDIC has increased MDI representation 

on our Community Bank Advisory Committee (CBAC), established a new MDI subcommittee 

of the CBAC to highlight the work of MDIs in their communities and to provide a platform 

for MDIs to exchange best practices, and enabled MDIs to review potential purchases of a 

failing MDI before non-MDI institutions are given this opportunity. These efforts were further 

incorporated in a Statement of Policy issued in June 2021 to update, strengthen, and clarify 

the agency’s policies and procedures related to MDIs. 

In November 2021, we created the Office of Minority and Community Development Banking – 

a new Office that will further support the agency’s ongoing strategic and direct engagement 

with MDIs, CDFIs, and other mission-driven banks. The new office will further promote private 

sector investments in low- and moderate-income (LMI) communities. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

Promoting the Competitivenes 

of Our Community Banks 

Financial inclusion goes hand-in-hand with supporting the competitiveness of our community 

banks. At the FDIC, we observe in our daily work the vital role that community banks play 

in their local communities and in the U.S. economy overall. Despite their notable lending 

strengths and presence throughout our country, we know that many community banks 

struggle to remain competitive given the rapid pace of technological changes and the 

demands of increasingly tech-savvy consumers. 

From the earliest days of my chairmanship, I have emphasized how important recognizing, 

and adapting to, changes in technology and evolving consumer demands would be to our 

community banks’ survival and their ability to thrive. Today, as we think about the regulatory 

system we want to build coming out of the pandemic, innovation will be even more critical 

to fostering financial inclusion and the competitiveness of our community banks. The FDIC 

worked hard in 2021 on several novel initiatives to do its part to build this future. 

Among other things, we continued our groundbreaking work on the “rapid phased prototyping 

competition.” Through this competition, we sought to tackle the burdens that the current 

call reports place on supervised institutions and to enhance their value to the FDIC. Although 

these reports provide critical data to the FDIC, they do so with several months’ delay, thereby 

reducing the utility of the reporting. More than 30 technology firms were invited to participate 

in this rapid phased prototyping competition, to develop tools for providing more timely and 

granular data to the FDIC on the health of the banking sector while also making such reporting 

less burdensome for banks. Of those 30 firms, we asked four participants to move forward in 

the competition by proposing a proof of concept for their technologies – either independently 

or jointly. 

In 2021, we also actively pursued a groundbreaking approach to facilitate technology 

partnerships by developing the concept for a public/private standard-development 

organization to establish standards for due diligence of vendors and for the technologies they 

develop. Our goal is to standardize the due diligence process in such a way that fundamentally 

improves the ability of banks to partner with technology firms. At the same time, we hope it 

will strengthen compliance with consumer protection laws and regulations, and better allow 

the FDIC to engage in a horizontal review of the products, services, and risk-management 

practices of third-party service providers. We received many supportive comments in 

response to the request for information. We are pursuing the concept actively and will begin 

to engage our fellow regulators and the private sector more closely in order to bring this 

proposal to fruition. 

For our community banks – and our financial system more broadly – innovation is no longer 

a question of “shall we; shall we not” but “how can we do it because we must.” It has been 

my goal as Chairman that the FDIC lay the foundation for the next chapter of banking by 

encouraging innovation that meets consumer demand, promotes community banking, 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


MESSAGE FROM THE CHAIRMAN 

reduces compliance burdens, and modernizes our supervision while increasing access 

to banking services. The upheaval caused by the pandemic has only underscored the 

importance of these goals. 

Looking Ahead to 

Our “New Normal” 

Though we continue to be encouraged by the state of the banking sector as we enter our 

“new normal,” uncertainty remains, and the FDIC will continue monitoring several industries 

and markets that have been directly impacted by the pandemic and the related economic 

shutdowns. The FDIC remains vigilant about the uneven impact of the pandemic and its 

recovery on different populations throughout the United States. As they have throughout this 

unprecedented time, the FDIC’s 5,694 dedicated employees remain committed to the agency’s 

mission and the financial stability of the United States, as well as its role in supporting a 

financial system that serves all Americans. 

When I stepped into my role at the FDIC, I knew that to address the gap in financial belonging 

and support the competitiveness of our nation’s community banks, we – public and private 

sector entities alike – would have to break the mold. The FDIC staff has been working hard to 

do just that, and as my tenure ends, I want to express my gratitude for their efforts to join me 

on this journey. 

Sincerely, 

Jelena McWilliams 

FEDERAL DEPOSIT INSURANCE CORPORATION