FDIC Quarterly 39 2009, Volume 3, No. 2

Feature Article:

Findings from the FDIC Survey of Bank Efforts to 

Serve the Unbanked and Underbanked

Banks offer individuals the opportunity to save, borrow, 

invest, and build a credit record. Access to a basic 

bank account and financial services is fundamental to 

economic self-sufficiency. Millions of Americans, 

however, are unbanked or underbanked, meaning 

that they do not have access to banks or are not fully 

participating in the mainstream financial system.1

This article summarizes the key findings of and recommendations drawn from the FDIC Survey of Bank Efforts 

to Serve the Unbanked and Underbanked.

2

 It is intended 

to inform bankers, policymakers, and researchers of the 

results of the survey and to outline steps to improve 

access to the financial mainstream.

The survey finds that while most banks are aware that 

their market areas include significant unbanked and 

underbanked populations, relatively few have made it 

a strategic priority to target these market segments. In 

addition, while a number of banks are trying to reach 

the unbanked and underbanked, relatively few participate in the types of outreach that are thought to be 

particularly effective. The survey findings also indicate 

that although banks recognize the challenges associated 

with doing business with unbanked and underbanked 

individuals, they are making some progress in improving the accessibility of banking services.

Background

Few statistics are available on the actual number of 

unbanked and underbanked individuals and households 

in the United States. However, the percentage of 

American families that are unbanked is estimated at 

1

 Unbanked individuals and families are those who have rarely, if ever, 

held a checking account, savings account, or other type of transaction 

or check-cashing account at an insured depository institution. 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. 2

 The FDIC retained Dove Consulting to help administer the survey of 

banks. Dove Consulting collected the survey results and reported 

aggregated results to the FDIC. The survey results were released on 

February 5, 2009. For complete results, see http://www.fdic.gov/

unbankedsurveys/.

about 10 percent, and a substantial share of the population may be underbanked.3

The Federal Deposit Insurance Corporation (FDIC) is 

committed to ensuring that consumers have access to 

basic banking and other financial services. The FDIC is 

also dedicated to developing more robust data about 

unbanked and underbanked households and the factors 

that hinder them from fully using the mainstream 

financial system. As part of the commitment to these 

issues, during 2008 the FDIC conducted a nationwide 

survey of FDIC-insured depository institutions to assess 

efforts to serve unbanked and underbanked individuals 

and families.

The survey, the first of its kind at the national level, is 

mandated by Section 7 of the Federal Deposit Insurance 

Reform Conforming Amendments Act of 2005 (Reform 

Act). The Reform Act requires that the FDIC conduct 

biennial 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.”

In designing the survey, the FDIC focused on questions 

raised in the Reform Act and sought to provide information to the banking industry that would enhance the 

efforts of insured institutions to serve the unbanked and 

3

 The Board of Governors of the Federal Reserve System, in its Survey 

of Consumer Finances, reports that 8 to 13 percent of U.S. households lack transaction accounts. See Survey of Consumer Finances

for 1995, 1998, 2001, 2004, and 2007. The Center for Financial 

Services Innovation recently estimated that 40 million U.S. households are underbanked. See The CSFI Underbanked Consumer Study, 

June 8, 2008, at http://www.cfsinnovation.com/research-paper-detail.

php?article_id=330366. 
FDIC Quarterly 40 2009, Volume 3, No. 2

underbanked.4 The objectives of the survey were as 

follows:

1. Identify and quantify the extent to which insured 

institutions reach out to, serve, and meet the banking needs of unbanked and underbanked individuals 

and households;

2. Identify challenges affecting the ability of insured 

institutions to serve unbanked and underbanked 

individuals and households; and

3. Identify innovative efforts that insured institutions 

use to serve unbanked and underbanked individuals 

and households.

Bank Survey Details

The survey was voluntary and consisted of mail-in questionnaires administered to a stratified random sample of 

about 1,300 banks.5 The nationally representative 

sample was selected from the population of federally 

insured banks and thrifts with retail branch operations. 

Each of the 25 largest insured banks was included in the 

sample; 48 percent of all other banks with assets over 

$1 billion were also sampled, as were 14 percent of 

banks with assets under $1 billion. In all, 685 complete 

surveys were returned, resulting in a response rate of 

54 percent. The response rate was 96 percent for the 

25 largest banks, 61 percent for banks with assets over 

4

 One of several factors and questions the Reform Act asks the FDIC to 

consider in conducting the survey is, “What is a fair estimate of the 

size and worth of the ‘unbanked’ market in the United States?” The 

FDIC is addressing this question through a separate household survey 

effort 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 are to gather accurate estimates of the number of unbanked and underbanked households in the 

United States, their demographic characteristics, and reasons why 

they are unbanked or underbanked. It is anticipated that the results of 

this survey will fill many data gaps regarding unbanked and underbanked households in the United States. The FDIC plans to release the 

results later this year.

5

 The universe for the survey was the 7,487 federally insured banks 

and thrifts operating in the United States during the first quarter of 

2007. Because a statistical sample was selected for the survey (i.e., 

a stratified random sample), valid statistical estimates of universe 

statistics were derived from the sample. These estimates were “unbiased,” aside from the impact of survey nonresponse. To correct for 

the nonresponse bias, a standard weight adjustment procedure was 

used. See Chapter 2 of the survey report for a complete discussion of 

the survey methodology.

$1 billion, and 51 percent for banks with assets under 

$1 billion.6

The survey consisted of three sections. The first section 

focused on bank financial education and outreach 

efforts. The second section examined the obstacles that 

limit banks’ ability to serve the unbanked and underbanked. This section asked about the perceived challenges to serving these customers, efforts to improve 

access through retail branch operation modifications, 

services provided to noncustomers who may be 

unbanked or underbanked, and bank account opening 

practices and policies. The final section assessed the 

types of deposit, payment, and credit products offered to 

entry-level consumers, focusing on innovative products 

that serve the needs of unbanked and underbanked 

individuals.

A limited number of bank case studies were included 

along with the survey results. The case studies were 

developed from in-depth interviews with 16 surveyed 

banks that appeared to be successfully developing innovative business opportunities with unbanked and underbanked individuals. Case study banks were carefully 

selected based on a variety of information, including 

survey questionnaire responses and industry research.7

Summary of Survey Results

Financial Education and Outreach Efforts

A main objective of the survey was to quantify the 

extent to which banks serve and reach out to unbanked 

6

 Twenty-four of the 25 largest banks responded to the survey. The 

universe of the survey also included 564 banks with assets over 

$1 billion; 268 of these banks were included in the sample and 159 

responded. There were 6,898 banks with assets under $1 billion in 

the survey universe; 994 of these banks were included in the sample 

and 502 responded.

7

 The FDIC identified some case study banks based on industry 

research completed prior to the implementation of the survey. Other 

case study banks were chosen if their responses to the survey 

revealed particularly innovative or successful strategies for reaching 

the unbanked and underbanked. The case study population was 

designed to include banks of varying sizes and covering different 

geographies. All case study banks had to meet “good standing” 

criteria, which considered ratings for Community Reinvestment Act, 

safety and soundness, and compliance. The 16 case study banks are 

Amalgamated Bank, New York, NY; Artisans’ Bank, Wilmington, DE; 

BancorpSouth, Tupelo, MS; Bangor Savings Bank, Bangor, ME; Carver 

State Bank, Savannah, GA; Central Bank of Kansas City, Kansas City, 

MO; Citibank, N.A., Las Vegas, NV; Citizens Union Bank of Shelbyville, 

Shelbyville, KY; The Commerce Bank of Washington, Seattle, WA; Fort 

Morgan State Bank, Fort Morgan, CO; International Bank of Commerce, 

Laredo, TX; KeyBank, Cleveland, OH; Mitchell Bank, Milwaukee, WI; 

Monroe Bank & Trust, Monroe, MI; Ridgewood Savings Bank, Ridgewood, NY; and Second Federal Savings of Chicago, Chicago, IL. 
FDIC Quarterly 41 2009, Volume 3, No. 2

Serving the Unbanked and Underbanked

education sessions” as the most effective, followed by 

“financial outreach with other organizations” and “offpremise outreach visits” (see Table 1). Almost all banks 

(98 percent) rank financial outreach with other organizations and outreach visits among the top three most 

effective strategies.

Bank perceptions of the most effective education and 

outreach strategies do not necessarily correlate with 

their participation in these activities. For example, 

banks ranked “providing financial education materials” 

as only the fourth most effective outreach strategy, even 

though this method is the most commonly used. Sixtythree percent of banks provide financial education 

materials to the unbanked and underbanked, often in 

the form of brochures and pamphlets (see Chart 3 on 

page 42 for a summary of bank participation in various 

outreach strategies). Responses to open-ended survey 

questions suggest that most banks do not distinguish 

and underbanked individuals. However, to effectively 

educate and establish banking relationships with individuals outside of the mainstream, banks must first 

identify where these populations reside and commit to 

serving them. The survey found that 73 percent of 

banks are aware that unbanked and underbanked 

populations exist in their market areas (see Chart 1).8

However, fewer than 18 percent of banks identify 

expanding services to these individuals as a priority 

in their business strategy (see Chart 2). More than 

three-quarters of banks (77 percent) have not 

conducted research on this potential opportunity in 

their Community Reinvestment Act (CRA) assessment 

areas.9 According to the survey, the 25 largest banks are 

more likely than smaller banks to identify expanding 

services to these groups as a priority, although fewer 

than half (46 percent) have done so.

When asked to rank the three most effective strategies 

for educating and reaching out to unbanked and underbanked customers, banks identified “teaching financial 

8

 Throughout this article, statistically valid estimates from the sample 

are presented as percentages of the survey universe without referring 

to them specifically as “estimates.” For example, in this reference, 

“73 percent of banks” is “an estimated 73 percent of banks.” 9

 In 1977, Congress enacted the CRA to encourage federally insured 

banks and thrifts to help meet the credit needs of their entire community, including low- and moderate-income neighborhoods, consistent 

with safe and sound operations. The CRA implementing regulations 

require a bank to delineate one or more assessment areas, which 

are geographic areas (e.g., entire Metropolitan Statistical Areas or 

individual census tracts) that the bank reasonably expects to serve. 

Assessment area delineations may not arbitrarily exclude low- or 

moderate-income geographies or reflect illegal discrimination. The 

bank’s primary federal bank regulatory agency evaluates the bank’s 

record of helping to meet the credit needs of the assessment area(s) 

that the bank defined, consistent with safe and sound lending.

Chart 1

0%

20%

40%

60%

80%

100%

25 Largest Banks Assets > $1 Billion Assets < $1 Billion

Yes

No

Don’t Know

Does the bank perceive unbanked and underbanked populations in its market?

The Majority of Banks Are Aware That Unbanked and

Underbanked Populations Exist in Their Market Areas 

Source: FDIC.

Chart 2

Is expanding services to the unbanked a priority in the bank’s business strategy?

 Banks Are Generally Aware of Unbanked Populations

in Their Market Areas, but Most Do Not Consider

Serving the Unbanked a Strategic Priority 

Yes

No

Don’t Know

0%

20%

40%

60%

80%

100%

25 Largest Banks Assets > $1 Billion Assets < $1 Billion

Source: FDIC.

Table 1

Banks Identified 

“Teaching Financial Education” 

As the Most Effective Outreach Strategy

Effectiveness 

Ranking Programs

1 Teaching financial education sessions

2 Financial outreach with other organizations

3 Off-premise outreach visits

4 Providing financial education materials

5 Targeted marketing

6 Other

Source: FDIC.
FDIC Quarterly 42 2009, Volume 3, No. 2

are more likely to engage in this strategy. Among banks 

that target a specific demographic, Hispanic Americans 

are targeted more frequently than other groups.

Perceived Challenges to Serving Unbanked and 

Underbanked Customers

Banks appear to assume that doing business with 

unbanked and underbanked individuals is not profitable, which is an obstacle to serving these populations. 

When asked to rank order the challenges banks face in 

serving or targeting the unbanked and underbanked, 

banks list “profitability issues” first, followed by “regulatory barriers” and “fraud concerns” (see Table 2). Of the 

40 percent of banks that perceive regulatory impediments, many cite concerns related to maintaining 

compliance with the Patriot Act and the Bank 

Secrecy Act.10

Bank Efforts to Improve Access to Retail Branches

In the past five years, banks have taken several steps to 

make retail branches more accessible to unbanked and 

underbanked customers. For example, almost two-thirds 

(64 percent) of banks reported that they modified their 

retail operations to make them more appealing or 

convenient. Almost three-quarters (73 percent) of these 

banks reported offering Internet or mobile banking. In 

addition, 47 percent of banks installed external automated teller machines (ATMs), and 43 percent added 

off-premise ATMs. Thirteen percent of banks added 

branches in nontraditional locations (e.g., community 

centers and supermarkets), and 20 percent added 

10 Title III of the Patriot Act, which was signed into law on October 25, 

2001, requires banks to establish a Customer Identification Program. 

The Bank Secrecy Act (BSA) of 1970 requires U.S. financial institutions to assist U.S. government agencies to detect and prevent money 

laundering. The BSA is sometimes referred to as the “anti-money laundering” law (AML) or as “BSA/AML.” 

between unbanked and underbanked customers in their 

educational materials.

Many bank strategies for reaching unbanked and underbanked populations rely on partnering with or traveling 

to outside organizations. In all, 37 percent of banks 

participate in financial education or outreach efforts 

with other organizations in order to expand services to 

unbanked and underbanked individuals. Examples of 

these efforts include working with businesses to offer 

employee payroll cards, partnering with government 

entities to provide electronic benefit transfer or prepaid 

cards, and collaborating with faith-based groups to 

provide cash assistance. The largest 25 banks are more 

likely to participate in such efforts. Fifty-eight percent 

of banks reported that they conduct off-premise financial education and outreach visits, most commonly at 

high schools and community-based organizations. In 

addition, 38 percent of banks work with corporate or 

business customers to provide services for unbanked and 

underbanked employees. Larger banks are more likely to 

work with businesses to promote services for the 

unbanked.

About half (53 percent) of banks teach financial education sessions targeted to the unbanked and underbanked, which banks ranked as the most effective 

outreach method. Educational sessions are typically 

conducted offsite, and larger banks are more likely to 

offer them. Among banks that provide these sessions, 

the most frequently covered topics are basic banking 

and savings programs.

One-quarter of banks use targeted marketing to reach 

unbanked and underbanked individuals, and larger banks 

Chart 3

0% 10% 20% 30% 40% 50% 60% 70%

Targeted marketing

Financial outreach with

other organizations

Working with corporate

customers to serve employees

Teaching financial

education sessions

Off-premise outreach visits

Providing financial

education materials

Percentage of Banks Participating in

Financial Education and Outreach

Most Banks Provide Educational Materials, Classes,

and Off-Premise Outreach, but Other Efforts to Reach

Unbanked Populations Are More Limited 

Source: FDIC.

Table 2

Banks Report That Profitability Issues and 

Regulatory Concerns Pose Challenges to 

Serving the Unbanked

Ranking Challenges

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

Source: FDIC.
FDIC Quarterly 43 2009, Volume 3, No. 2

Serving the Unbanked and Underbanked

The type of identification required to cash a check can 

also pose challenges for noncustomers who may be 

unbanked or underbanked. Most banks will accept a 

driver’s license (92 percent) or state-issued photo 

identification (86 percent) from noncustomers who 

wish to cash checks. However, only a limited number 

of banks accept the Matrícula Consular identification 

(20 percent) and the Individual Taxpayer Identification 

Number (ITIN) (1 percent) as primary forms of identification for check cashing by noncustomers (see 

Chart 6 on page 44).12

Besides check cashing, other transaction services to 

noncustomers are relatively limited. For example, 

37 percent of banks offer bank checks and money orders 

to noncustomers, 6 percent offer international remittances, and 2 percent offer check-cashing cards.

Bank Account-Opening Practices and Policies

Unbanked and underbanked individuals also face a 

number of challenges in establishing banking relationships. These individuals often must present governmentissued identification to open a bank account. While most 

banks will accept either a driver’s license (99 percent) 

or passport (92 percent), only 27 percent of banks 

accept Matrícula Consular cards and only 38 percent 

accept ITINs as forms of identification for opening a 

new account.

12 Matrícula Consular cards are identification cards issued to Mexican 

national citizens by the government of Mexico through its consulate 

offices. Similar consulate identification cards are issued to citizens of 

other countries.

branches in low- to moderate-income (LMI) areas.11

In addition, many banks now offer extended hours 

(59 percent) and employ bilingual staff (52 percent) at 

their retail branches (see Chart 4).

Another way banks can be more accessible to unbanked 

and underbanked customers is to offer a range of products and services that may especially appeal to them; 

however, most banks do not incorporate this approach 

into their branch strategies. Indeed, fewer than half 

of banks offer check cashing (49 percent) and money 

orders (41 percent) as part of their strategy to serve 

the unbanked and underbanked. Far fewer offer other 

services, such as bill-paying services and prepaid card 

issuance and reloading (see Chart 5).

Services Banks Provide to Noncustomers 

Who May Be Unbanked or Underbanked

Although a bank cannot reasonably determine whether 

a noncustomer is unbanked or underbanked, offering a 

variety of services to noncustomers is one way of reaching those populations. One service that the unbanked 

and underbanked commonly use is check cashing. 

However, banks provide limited check-cashing opportunities for noncustomers. Most banks (96 percent) will 

cash checks for noncustomers drawn on the bank itself, 

but fewer than one-third will cash payroll and other business checks not written on the bank for noncustomers.

11 In low-income areas, income is equal to or less than 50 percent of 

the median income of the local Metropolitan Statistical Area (MSA) or 

appropriately defined rural area. In moderate-income areas, income is 

between 50 percent and 80 percent of the median income of the local 

MSA or appropriately defined rural area. 

Chart 4

0%

20%

40%

60%

80%

100%

Saturday

afternoon hours

(after 1:00 p.m.)

The Majority of Banks Offer Extended Hours,

Typically during Weekday Evenings 

Percentage of Banks Offering Extended Hours at Full-Service 

Brick-and-Mortar Branches*

Source: FDIC.

*Based on all banks offering some type of extended hours; 41 percent of banks do not 

offer extended hours.

Weekday

evening hours

(after 5:00 p.m.)

Sunday hours

Chart 5

0% 10% 20% 30% 40% 50% 60%

Check Cashing

Money Orders

Bill Payment

Prepaid Cards

Other

Check-Cashing Kiosks

Percentage of Banks Offering Services as

Part of Strategy to Reach the Unbanked

Banks Offer a Limited Range of Services That Might

Appeal to Unbanked and Underbanked Individuals 

Source: FDIC.
FDIC Quarterly 44 2009, Volume 3, No. 2

Deposit, Payment, and Credit Products and Services 

Offered to Entry-Level Consumers

Accounts and products that are designed to address the 

needs of unbanked and underbanked individuals often 

succeed in bringing them into the mainstream banking 

system. The survey shows that most banks offer basic 

savings, deposit, and transaction accounts to qualified 

customers. For example, almost two-thirds (62 percent) 

of banks offer an entry-level checking account with no 

minimum balance. Another 8 percent of banks 

normally charge a minimum fee on their most basic 

checking account but will waive the fee if the customer 

uses direct deposit. When required, the median minimum balance with or without direct deposit was $100.

Nearly all banks (99 percent) charge a per-item overdraft fee on their most basic (lowest cost) transaction 

account. These fees range from $8 to $38, with a 

median of $25. While more than half (60 percent) of 

banks offer some type of program that will cover or 

waive the overdraft fee, such programs frequently 

involve a line of credit or transfer and may not be available to underbanked customers. More than half of 

banks (57 percent) that charge overdraft fees automatically close an account after a customer has a certain 

number of overdrafts (ranging from 1 to 500) or if an 

account has a negative balance for a given period of 

time (ranging from 10 to 180 days).

In addition, nearly all banks (97 percent) offer lowbalance (under $500) basic savings accounts, but fewer 

offer savings programs designed to help unbanked and 

underbanked customers. Seven percent of banks offer 

savings accounts through workplace-based programs, 

A blemished credit history presents further challenges 

to opening a new account. Most banks (87 percent) 

require a third-party credit check screen, such as ChexSystems, when a customer opens a new checking 

account.13 One-quarter of banks automatically reject a 

new account application that receives a negative result 

on the credit check screen, and only half (49 percent) 

can override a negative result at a branch location. 

However, one-quarter of banks offer “second chance” 

accounts designed for individuals not qualified for 

conventional bank accounts.14

Survey results reveal that a blemished credit history and 

insufficient identification impede unbanked and underbanked individuals from opening bank accounts more 

than any other factor. When asked to rank order the 

three most common reasons that a new account applicant is declined, banks identified “negative account 

screening” first, followed by “insufficient identification 

information” and a “low credit score.”

13 ChexSystems, Inc., is a network of financial institutions that 

provides deposit account verification services to members and information to help them identify account applicants who may have a 

history of account mishandling (for example, people whose accounts 

were overdrawn and then closed by their bank). 

14 “Second chance” accounts are frequently checkless accounts or 

accounts with limited check-writing privileges that may be connected 

to a debit card. They usually provide most or all of the benefits of a 

regular checking account, including a bank routing number and 

account number. 

Chart 6

Percentage of Banks That Accept Various Types of Identification from Noncustomers for Check Cashing

It Is Difficult for Noncustomers Without Government-Issued Identification to Cash Checks at Banks

Source: FDIC.

Note: ITINs are Individual Taxpayer Identification Numbers. A primary identification is sufficient by itself, and a secondary identification is insufficient by itself but acceptable together 

with another secondary identification. 

0%

20%

40%

60%

80%

100%

Driver’s licenseState-issued

photo ID

Passport Military ID Student ID SSN Matrícula

Consular

ITIN Utility bills Employer

letters/

pay stubs

Housing

lease

Primary

Secondary
FDIC Quarterly 45 2009, Volume 3, No. 2

Serving the Unbanked and Underbanked

serve as alternatives to payday loans.17 About two-thirds 

(69 percent) offer closed-end unsecured personal loans 

for amounts under $5,000. Among banks that do offer 

such loans, nearly all (97 percent) reported that they 

can originate an unsecured personal loan in less than 

48 hours; 80 percent reported that they can originate 

such a loan in less than 24 hours.18 However, eligibility 

requirements may hinder access for unbanked and 

underbanked customers.19 About one-third (36 percent) 

of banks offer consumer credit cards, but most require a 

Social Security number, credit history, and minimum 

credit score to qualify, which likely limits availability to 

LMI individuals.

Case Study Highlights

The 16 case studies included with the survey results 

demonstrate that banks can serve the unbanked and 

underbanked markets both profitably and effectively.20

The case study banks, which represent various asset size 

classes and geographic locations, are successfully serving 

these populations through a variety of innovative strate17 See Christine Bradley, Susan Burhouse, Heather Gratton, and RaeAnn Miller, “Alternative Financial Services: A Primer,” FDIC Quarterly,

vol. 3, no. 1 (2009) for more information about the prevalence of 

payday lending and other alternative financial services. 

18 Survey responses to a question asking whether banks offer affordable small-dollar loans revealed confusion about the product, since a 

number of banks counted overdraft lines of credit in their affirmative 

responses. The questionnaire defined “affordable small-dollar loans” 

as loans for “less than $1,000/at least a 90-day repayment term/less 

than 36 percent APR/low or no fees.”

19 Eligibility requirements frequently include review of credit history 

(required by 94 percent of banks), proof of income (required by 76 

percent of banks), minimum credit score (required by 50 percent), and 

deposit relationship (required by 41 percent). 

20 The FDIC does not endorse any bank or product.

8 percent participate in or offer Individual Development 

Account (IDA) programs, and 3 percent participate in 

Internal Revenue Service Voluntary Income Tax Assistance (VITA) programs.15 Fewer than one-quarter 

(22 percent) of banks partner with organizations to 

promote savings products, and about half (49 percent) 

offer special savings clubs. The largest 25 banks were 

more likely to offer some of these programs.

At many banks, funds availability from deposited 

checks, while in compliance with federal regulations, is 

slow relative to nonbank check-cashing services.16

Funds are often made available most quickly for business and personal checks drawn on the bank (known as 

“on-us” checks), but at least one-third of banks require 

a minimum one-day waiting period before funds are 

available from these checks (see Chart 7). Longer waits 

are frequently required for government or payroll 

checks and checks drawn on another bank (see Chart 

8). In addition, fewer than 6 percent of banks advance 

funds due to arrive by direct deposit or check, which 

can make banks less competitive than nonbank checkcashing services.

Banks offer few credit products tailored to LMI, 

unbanked, and underbanked individuals that could 

15 Workplace-based programs, IDAs, and VITA programs can help 

bring unbanked and underbanked individuals into the mainstream 

financial system through savings products. IDAs are matched savings 

accounts that allow LMI individuals to save, build assets, and enter the 

financial mainstream. VITA programs offer free tax help to LMI individuals who cannot prepare their own tax forms. 

16 The Expedited Funds Availability Act of 1987 (Federal Reserve Regulation CC) sets maximum timeframes that a bank can withhold funds 

and is enforced by the bank’s primary federal supervisor. 

Chart 7

Next day

36 percent 

Second day

1 percent 

Current day

63 percent

Nearly Two-Thirds of Banks Are Able to Provide

Same-Day Availability of Funds for

On-Us Business Checks 

Funds Availability for Customers Presenting Business Checks 

Drawn on the Bank

Source: FDIC.

Chart 8

Next day

48 percent

Second day

21 percent

Current day

28 percent

Most Bank Customers Must Wait at Least One Day to

Receive Funds from Business Checks

Drawn on Another Bank

Funds Availability for Customers Presenting Business Checks 

Not Drawn on the Bank

Source: FDIC.

Three or

more days

3 percent
FDIC Quarterly 46 2009, Volume 3, No. 2

and publish further research on these issues using these 

survey results as well as results from the FDIC’s National 

Survey of Unbanked and Underbanked Households, which 

was conducted jointly with the Census Bureau in January 2009.

In addition, the FDIC will continue to pursue initiatives already under way that are designed to encourage 

insured institutions to serve the unbanked and underbanked, including the Advisory Committee on 

Economic Inclusion (ComE-IN), the Alliance for 

Economic Inclusion (AEI), the Affordable and Responsible Consumer Credit (ARC) Small-Dollar Loan Pilot 

Program, and the Money Smart financial education 

program (see text box above). The FDIC will also share 

information on best practices through the general 

examination process, meetings, and conferences.

Going forward, the government and financial industry 

might wish to define a shared goal to lower the number 

of unbanked and underbanked individuals and households. This effort would require reliable and regularly 

reported statistics on the number of unbanked and 

gies. For example, several case studies suggest that banks 

are most successful in educating and reaching out to the 

unbanked and underbanked when they have established 

solid relationships with community organizations and 

have the support of these and other important stakeholders inside and outside the bank. Other case studies 

highlight banks that have overcome obstacles to working with the unbanked and underbanked by adapting to 

changing customer demographics, offering bank services 

in more casual or convenient settings, providing greater 

and more varied means of accessing bank services, 

and giving bank employees a key role in welcoming 

unbanked individuals. Finally, a number of case studies 

portray banks that are offering entry-level accounts and 

services that incorporate innovative features, such as 

debit cards and prepaid cards. Complete case studies 

appear in Chapter 12 of the survey report.

Next Steps

The FDIC hopes that the results of the survey will 

assist policymakers, researchers, and practitioners as 

they continue their work to expand access to the mainstream financial system. The FDIC intends to conduct 

FDIC Activities to Encourage Economic Inclusion

The FDIC’s Advisory Committee on Economic Inclusion (ComE-IN) was established by Chairman Sheila C. 

Bair and the FDIC Board of Directors in November 2006 

according to requirements of the Federal Advisory 

Committee Act. ComE-IN provides the FDIC with 

advice and recommendations on important initiatives 

focused on expanding access to banking services by 

underserved populations. Expanding access may include 

reviewing basic retail financial services, such as check 

cashing, money orders, remittances, stored value cards, 

short-term loans, savings accounts, and other services 

that promote asset accumulation and financial stability.

The FDIC’s Alliance for Economic Inclusion (AEI) is 

a national initiative to establish broad-based coalitions of 

financial institutions, community-based organizations, 

and other partners in ten markets across the country to 

bring all unbanked and underserved populations into the 

financial mainstream. AEI focuses on expanding basic 

retail financial services for underserved populations, 

including savings accounts, affordable remittance products, small-dollar loan programs, targeted financial education programs, alternative delivery channels, and other 

asset-building programs. To date, 952 banks and organizations have joined AEI nationwide; more than 65,000 

new bank accounts have been opened; 45 banks are offering or developing small-dollar loans; 33 banks are offering remittance products; and more than 61,000 consumers 

have received financial education.

The FDIC’s Affordable and Responsible Consumer 

Credit (ARC) Small-Dollar Loan Pilot Program is a 

two-year pilot project to review affordable and responsible 

small-dollar loan programs in financial institutions. The 

purpose of the study is to identify effective and replicable 

business practices to help banks incorporate affordable 

small-dollar loans into their other mainstream banking 

services. Best practices resulting from the pilot will be 

identified and become a resource for other institutions.a

The FDIC’s Money Smart financial education curriculum is designed to help adults outside the financial mainstream enhance their money skills and create positive 

banking relationships. The FDIC also oversees the Money 

Smart Alliance, which consists of about 1,250 financial 

institutions, nonprofit organizations, schools, government authorities, and others that partner with the FDIC 

to provide financial education targeted to LMI households and others.

a See Susan Burhouse, Rae-Ann Miller, and Aileen G. Sampson, 

“An Introduction to the FDIC’s Small-Dollar Loan Pilot Program,” 

FDIC Quarterly, vol. 2, no. 3 (2008), 23–30, http://www.fdic.gov/

bank/analytical/quarterly/2008_vol2_3/FDIC135_Quarterly_Vol2No3_

Small_Dollar_Article.pdf.
FDIC Quarterly 47 2009, Volume 3, No. 2

Serving the Unbanked and Underbanked

underbanked households in the United States and 

could be based on the results of the FDIC’s National 

Survey of Unbanked and Underbanked Households. A 

national task force, composed of senior representatives 

of federal bank and credit union regulators and the U.S. 

Department of the Treasury, could be created to 

provide oversight and guidance.

Conclusions

The FDIC Survey of Bank Efforts to Serve the Unbanked 

and Underbanked has helped clarify efforts by financial 

institutions to increase economic inclusion. Banks 

recognize that unbanked and underbanked populations 

exist in their market areas, and many are trying to reach 

out to these individuals. Still, many opportunities 

remain in what is a largely untapped marketplace. 

The FDIC encourages all banks to expand their efforts 

to address the unique needs of the financially underserved. Using the survey results, practitioners, policymakers, and others who are committed to increasing 

access to the financial mainstream can work together to 

ensure that all consumers have access to basic banking 

and financial services.

Authors: Barbara Ryan, Deputy to the Vice Chairman

Susan Burhouse, Senior Financial Economist

Members of the FDIC Unbanked and Underbanked 

Survey Study Group are Barbara Ryan and Yazmin Osaki 

(Office of the Vice Chairman); Susan Burhouse, Katherine 

Samolyk, and David Chapman (Division of Insurance and 

Research); Luke Reynolds and Angelisa Harris (Division 

of Supervision and Consumer Protection); and Leneta 

Gregorie (Legal Division).