Examining the “Bank On” Affordable Banking Movement
Having access to full banking services makes it easier to spend less on financial services, build up a credit history and take advantage of conveniences such as automatic paycheck deposits.
This is why Bank On movement leaders are trying to bring low-fee bank accounts to the 1 in 4 households that either don’t have a bank account or have one but also rely on firms such as check cashers and payday loan centers for banking services. Accounts must meet national Bank On standards, which include offering mainstream services and having deposits federally insured.
Bank On efforts are laudable, but are they effective? The St. Louis Fed’s Community Development department is helping to answer that question.
The St. Louis Fed is in its second year of analyzing data on Bank On account activity. After a pilot study with four national banks, the St. Louis Fed officially launched the Bank On National Data Hub. Ten banks—the four from the pilot study and six community banks—submitted 2018 data in 2019.
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