The Federal Reserve Board published remarks by Governor Michael S. Barr at its second annual Financial Inclusion Conference setting out how access to safe, affordable bank accounts underpins financial inclusion and how faster payments, responsible small-dollar credit, and alternative financial data can broaden participation in the financial system. Barr pointed to Federal Deposit Insurance Corporation survey results showing the unbanked rate is at its lowest since 2009, while identifying persistent gaps for disabled people, those without a high school diploma, and several minority groups. He cited account opening costs, unpredictable or high fees, and high minimum balance requirements as leading barriers, and highlighted the Cities for Financial Empowerment Fund’s Bank On certification standards and reach, including more than 46,000 bank branches offering certified accounts and the St. Louis Fed’s Bank On National Data Hub. On payments, he emphasized the role of real-time services such as the FedNow Service, launched in 2023, in improving access to funds and helping households and businesses better manage payment timing and related fees. On credit, he cited Federal Reserve survey findings that nearly 20 percent of adults would address an unexpected USD 400 expense through selling something, payday or similar products, overdraft, or being unable to pay, rising to 46 percent for households with incomes under USD 25,000, and referenced 2020 interagency guidance on responsible small-dollar lending. He also described the use of alternative data, including cash-flow information accessed through permissioned data and application programming interfaces, to expand credit access and speed underwriting decisions. The Board posted a revised transcript noting that language was added and removed to correct inadvertent omissions in the published version.
Federal Reserve Board 2025-07-15
Federal Reserve Board Governor Barr highlights bank account access FedNow and responsible small-dollar lending as pillars of financial inclusion
Federal Reserve Board Governor Michael S. Barr emphasized at the Financial Inclusion Conference the importance of safe, affordable bank accounts and faster payments for financial inclusion. He noted the lowest unbanked rate since 2009 but identified barriers like account costs and fees, highlighting initiatives such as the Bank On certification and FedNow Service. Barr also discussed alternative financial data's role in expanding credit access and improving underwriting decisions.