An updated report from the Federal Reserve Bank of St. Louis shows that demand for and use of the affordable banking movement known as Bank On continues to grow.
Bank On National Data Hub: Findings from 2020 (PDF) analyzes data from 17 financial institutions related to account openings, usage and consistency, and online access.
- The demand and use of Bank On accounts continues to grow. More than 8.4 million Bank On-certified accounts have been opened. Over 3.8 million accounts were open and active in 2020, representing about 80% of U.S. ZIP codes. 82% of Bank On accounts opened in 2020 were opened by customers who were new to the financial institution.
- Bank On accountholders are actively using their accounts. Nearly 64 million debit transactions were processed on average per month for Bank On account holders at participating institutions, an average of 26 debit transactions per accountholder per month. This created an average of over $2.4 billion in debit transaction value per month. Additionally, over $43 billion was deposited into these accounts in 2020, an average of six deposits per month per account holder.
- About 79% of Bank On account holders are considered digitally active.
More than 5% of U.S. households (7.1 million) are unbanked, meaning they do not have checking or savings accounts, according to the Federal Deposit Insurance Corp., and another 22 million households are underbanked, relying on alternative financial services to meet their needs.
“This report helps quantify the national impact of Bank On and how consumers are opening and using safe, affordable transaction accounts. The use of these accounts demonstrates the market for Bank On-certified accounts,” said Daniel Paul Davis, vice president of Community Development and Community Affairs officer at the St. Louis Fed.
“Financial institutions, Bank On coalitions, local government leaders, the banking industry and federal regulators are all working together to grow the Bank On movement and ensure that everyone has access to a safe and affordable banking account,” said Jonathan Mintz, President and CEO, Cities for Financial Empowerment Fund. “The CFE Fund is proud to partner with the St. Louis Fed and the 17 reporting financial institutions to demonstrate the impact of Bank On-certified accounts for millions of accountholders across the country.”
The report is a companion to the St. Louis Fed’s Bank On National Data Hub, which launched in 2020 and allows financial institutions offering certified accounts to submit their data annually to a federal regulator—ensuring a consistent, accurate reporting process. The Bank On National Data Hub also features an interactive tool to help anyone learn about the affordable banking landscape. In addition, the CFE Fund’s Local Bank On Data tool provides Bank On National Data Hub information at the local level.
About Bank On
Bank On coalitions are locally led partnerships between local public officials; city, state, and federal government agencies; financial institutions; and community organizations that work together to help improve the financial stability of unbanked and underbanked individuals and families in their communities, including by connecting them to the 170+ Bank On-certified accounts. The Cities for Financial Empowerment Fund’s Bank On national initiative builds on a grassroots movement of over 90 coalitions in cities across the country, offering National Account Standards, capacity grant support, pilot funding, and a learning community. In addition to connecting unbanked individuals to accounts, Bank On programs raise public awareness, target outreach to the unbanked, and expand access to financial education. Follow the conversation on Twitter @CFEfund #BankOn.