2010 Annual Report

Making markets work for the poor

Bold ideas are transforming financial services for the poor, providing new tools to reduce poverty in the United States.

Decades of experience in the fight against poverty show that simply supplementing family income is not enough. Low-income families need opportunities to build assets that help them handle crises, take advantage of opportunities and, above all, create a secure future through homeownership and other investments in long-term financial independence. Good financial services targeted to the realities of the lives of low-income people are part of any lasting solution.

To create smarter financial tools for low-income customers, we are helping to change the financial services market to make it more responsive, more accountable and fairer. This will require three key elements. First, low-income consumers need financial products that are attractive and that build their personal assets; the products also need to make financial sense for the companies offering them. Second, distribution systems are needed to make those products truly accessible to their intended customers. Third, consumer-friendly public policies that encourage and even motivate good service for low-income consumers are essential.

We are partnering with organizations working on all three fronts. As new approaches gain visibility and acceptance over the next few years, we expect to see significant gains in access for low-income families to financial services and in the ability of the market to serve those families well.

How many American households lack the financial services they need?

Banked

88 million 74%
Unbanked* or Underbanked**

30 million 26%

Total U.S. Households

Black

Banked 56%
Unbanked or Underbanked 44%

American Indian/Alaskan

Banked 57%
Unbanked or Underbanked 43%

Hispanic

Banked 64%
Unbanked or Underbanked 36%

White

Banked 82%
Unbanked or Underbanked 18%

Asian

Banked 89%
Unbanked or Underbanked 11%

U.S. Households, by race/ethnicity Source: FDIC, 2009 *Unbanked: Households without checking or savings accounts
**Unbanked: Households with bank accounts that still rely on more costly alternative financial services

Learn about our Improving Access to Financial Services initiative »