Strategies for banking the unbanked : how bankers are overcoming entrance barriers
As consumer demographics continue to change, an increasing percentage of the U.S. population is represented by those of Hispanic origin. For financial institutions, this change is significant because many Hispanic consumers lack formal banking relationships. The are unbanked. This article discusses future population projections and how these changes are playing out in the Tenth District states. The authors also describe survey results from the Federal Reserve Bank of Kansas City's survey of Hispanic consumers in Garden City, Kansas. These survey results help explain why many Hispanic ...
Landmark payday loan act in Illinois
On June 9, 2005, Governor Rod R. Blagojevich signed a landmark Payday Loan Reform Act that for the first time will regulate the payday loan industry in Illinois and strengthen protection to consumers, especially working families and members of the military against predatory and abusive practices. The Act became effective in December 2005. ; ?Payday loans are supposed to help working people cover unexpected costs and emergencies. They?re not supposed to break their bank accounts. We needed to do something about this, and we have achieved it,? said Gov. Blagojevich upon signing the law during a ...
The latest frontiers for financial inclusion: Using mobile phones to reach the unbanked
The goal of community development should be to improve the lives of as many disadvantaged people as possible with a minimum amount of resources. The field can achieve this goal by identifying those community development projects that are both efficient and have significant social impacts, and then scaling up. However, without effective evaluations, it is impossible to gauge progress. Effective evaluations include randomized experiments and well-designed observational studies, both of which can measure the impact to society. This article analyzes the best evaluation methods in international ...
Banking on Distributed Ledger Technology: Can It Help Banks Address Financial Inclusion?
Despite its promise, distributed ledger technology is unlikely to draw unbanked consumers into the financial mainstream
Driving positive behavior change through education and motivation: summary of a PayPerks workshop
Start-up firm PayPerks has developed a financial capability and rewards platform that combines online education with sweepstakes-based incentives. PayPerks? initial emphasis has been on improving the understanding and use of prepaid cards among individuals with little prior experience using payment cards. Participants can earn points in a variety of ways, including taking short, self-directed tutorials on prepaid card use. Every month, those points become chances to win cash prizes in sweepstakes drawings. PayPerks co-founders facilitated a Payment Cards Center workshop where they ...
Does Access to Bank Accounts as a Minor Improve Financial Capability? Evidence from Minor Bank Account Laws
Banking the unbanked is a common policy goal, but should this include access to bank accounts for minors? This study estimates how teenagers' access to bank accounts affects their financial development. Using variation in state laws, we show policies that permit access to independently-owned accounts increase account ownership at age 16 through age 19, although by age 24 those young adults are banked at similar rates to teens who grew up in states that do not allow minors to own accounts independently. Teens who had access to independently-owned accounts use fewer high-cost alternative ...
The bold and bankable: Nuestro Barrio Telenovela and financial education
Bankers have long sought better ways to reach the unbanked. Now an experiment with soap opera shows that engaging viewers? emotions first is critical to disseminating financial messages.
Financing community development: Learning from the past, looking to the future
The Federal Reserve System?s 2007 Community Development Research Conference was held in Washington, D.C., on March 29-30, 2007. This conference was the fifth in a biennial series that the Federal Reserve System established in 1999. In ?Financing Community Development: Learning from the Past, Looking to the Future,? Loretta Mester provides a summary of the conference.
Reaching immigrant communities
With Brazilians making up a large percentage of the immigrant community in New England, Communities & Banking decided to seek the Consul General?s views on a variety of topics, including how to encourage more of the undocumented to use banks.
Driver of choice? the cost of financial products for unbanked consumers
This paper examines whether some of the unbanked consumers' choice of general purpose reloadable (GPR) prepaid cards over checking accounts and alternative financial service (AFS) products can be explained by the cost incurred by those consumers. We compare the three types of products by constructing consumer models based on the actual behavior of GPR prepaid cardholders and applying those models to the fee schedules of actual products offered in the market. Overdrafts are a major factor affecting the cost rankings. For consumers who regularly or occasionally overdraw their accounts, checking ...