FINANCIAL ACCESS FOR ALL Putting Banking within Reach through a Universal Account System FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM 2

Financial Access for All: Putting Banking within Reach through a Universal Account System

AUTHORS | Myrto Karaflos, Bessie Bauman and Joanna Ain

Acknowledgments

The authors would like to thank Prosperity Now’s Doug Ryan and David Newville, who reviewed this report and provided helpful feedback. We are grateful to Sandiel Thornton on our Communications team, who designed the report and graphics. We would also like to thank our external reviewer, Aaron Klein from the Brookings Institution, for giving valuable feedback and insights on this report. Finally, we are grateful to the Yale Institute of Social and Policy Studies Director's Fellowship, which supports Yale undergraduate students conducting research on U.S. domestic policy. Bessie Bauman was a 2020 Director's Fellow.

Prosperity Now

Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of practical solutions, in-depth research and proven strategies, all aimed at building wealth for those who need it most. We recognize the devastating impact of the racial wealth divide on people and our economy, and we strive to equip organizations of color and others with the capacity, tools and cultural competency necessary to address structural and systemic barriers facing families of color. Gary Cunningham is our President and CEO.

3 FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM

INTRODUCTION

Approximately 63 million adults in the United States are financially underserved, left with little to no access to banking or credit services.1 About 14 million of those adults are unbanked, meaning that they do not have access to or accounts.2 The other 49 million adults are underbanked, meaning that they may have a but also rely on alternative , like check- cashing services and payday , in order to manage their finances.3 The magnitude of financial exclusion in the U.S. is large, and it is disproportionately harmful to low-income households and households of color.4

Without sufficient access to mainstream financial services at reasonable cost, millions of households are left without safe vehicles to save, plan for the future and climb the economic ladder. Furthermore, when households lack access to products like bank accounts, state and federal governments have difficulty providing direct assistance to those in need. In fact, in April 2020, millions of households without straightforward access to bank accounts faced difficulty receiving their Economic Impact Payments (EIPs)—stimulus payments which were meant to reduce households' financial burdens and prop up the economy during the COVID-19 pandemic. While many households with bank accounts received their payments via direct deposit, those without accounts had to wait weeks longer for paper checks. Additionally, financially underserved households faced other challenges, including the decreased use of cash by businesses, the costliness of using alternative financial services and the loss of part of their stimulus payments because of overdraft fees. These obstacles made it harder for them to get the help they were entitled to in order to weather the COVID-19 pandemic.

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Lower-Income Households Need Better Access to Safe Financial Products and Services

Given the significant number of unbanked and underbanked individuals, there is a clear need for more equitable access to mainstream financial In April 2020, millions products and services, such as bank accounts. Lower-income households, which tend to be the most impacted by financial exclusion, stand to of households benefit the most. Access to banking can help without straightforward them manage their day-to-day financial lives, reduce costs related to alternative financial access to bank accounts services and even build wealth. faced difficulty receiving can help families better manage their Economic Impact their finances. Mobile bank accounts make receiving direct payments from the government, Payments (EIPs), which like EIPs and tax refunds, quicker and safer. They were meant to reduce also offer convenience, allowing families to check their balances within seconds. In this day and households' financial age, a bank account offers a host of tools for burdens and prop up the making financial security simpler. Those without these tools often face barriers in managing their economy during the money, writing checks and even paying bills. The COVID-19 pandemic. 2016 Federal Reserve Consumer and Mobile Finance Survey shows that many mobile banking users who receive low-balance alerts from their reported taking some action in response, such as transferring money into the account with the low balance (43%), depositing money into the account (36%), or reducing their spending (32%).5 These reminders, along with other mobile banking features, help families quickly and easily make decisions about their financial health. This report also shows that nearly 40% of unbanked and 70% of underbanked households owned mobile phones, demonstrating that a lack of financial access, more so than technological access, is a key driver in financial exclusion.6

Alternative financial services are often financially damaging to lower-income households, particularly those of color. When households do not have access to mainstream financial services, they often must turn to alternative financial services, such as payday loans and check-cashing services. Not all alternative financial services are damaging; for some households, they are a necessary alternative to mainstream ones. However, they are typically quite expensive. In 2014, a survey administered by the U.S. Postal Service found that the average amount a financially underserved household spent on fees and interest from alternative financial services was $2,412 per year, nearly 10% of their average income.7

5 FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM

Moreover, some of these products and services, like payday loans, can be predatory. Payday loans, which individuals use to make payments before their paychecks arrive, can have interest rates as high as 1,000%.8 Typically, payday lenders require bank account information, which can result in overdraft fees or account closure in the event that the customer cannot pay back the . Furthermore, payday loans can damage a household’s credit, and lenders often use harsh debt collection practices.9 These practices trap consumers in a vicious cycle of making payments toward interest and fees, rather than toward their loan principal. Alternative financial services like payday loans also do not help households build their credit history and scores, further limiting their access to cheaper and more mainstream sources of credit. Black and Latinx households are most vulnerable to increased costs and predatory lending because they are more likely to be unbanked10 and because high-cost lenders are much more aggressive in minority markets.11 Beyond payday loans, financially underserved households also utilize check-cashing and money order services to access their paychecks and make payments. These services also charge fees, which could be avoided if households had access to a mainstream bank account.

Creating universal and safe financial products could help consumers avoid the danger and compounding costs of alternative financial services. These products can also help communities of color manage income volatility, which they are more likely to face than White households.12

Safe financial products and services can support households in building wealth. Without access to safe and effective financial services, millions of families are missing out on opportunities to build wealth. For example, financially underserved households may not be able to enroll in high-yield savings accounts or manage their financial health online with just a few clicks. Furthermore, some wealth- building programs have offered bank accounts to participants in order to help them increase their savings. For example, the Assets for Independence (AFI) program13, administered by the U.S. Department of Health and Human Services for almost 20 years, provided a federal platform where partners all across the country could help individuals open matched savings accounts, called Individual Development Accounts (IDAs). Through this program, 100,000 IDAs were opened, and participants saved over $100 million in these accounts until the program was defunded in 2017.14 The AFI program was successful in helping households build savings and wealth. However, our current financial system makes it cumbersome for organizations, such as nonprofits and Community Development Financial Institutions (CDFIs), to launch wealth-building programs since accounts can be difficult to coordinate across financial institutions. With universal financial access and a streamlined platform for digital accounts, these organizations could more easily launch matched savings and other wealth-building programs to reach those in need.

FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM 6

Universal Accounts Can Extend Financial Access to Underserved Households

With several key features, universal accounts can help support households facing financial exclusion. Given the large number of unbanked and underbanked households, there is clearly a need to make the current financial system more inclusive. One way to do this is through the creation of “universal accounts”15—transaction or savings accounts that are accessible to all people, including those who are currently excluded from the financial system. To be successful, these accounts should have several key features:

Minimal fees and no minimum balances. Overdraft and inactivity fees present hefty banking costs for financially underserved households. Nine percent of bank account holders pay most overdraft fees, and they tend to carry low balances and have low monthly deposits.16 Many banks also implement minimum balance and activity requirements on consumer bank accounts, which may present obstacles to families who need to use significant portions of their earnings (or savings) to pay for living expenses. Given this, universal accounts should have minimal fees and no minimum balance requirements. For example, existing low-cost bank account initiatives charge monthly maintenance fees (costing a few dollars per month) but no overdraft fees.17 This feature will allow families to use the accounts without incurring costly penalties or worrying about having a low balance.

Real-time payments. Real-time payments would allow deposited payments to be accessed by banks and, by extension, consumers almost instantaneously, instead of delaying these payments by one to three business days. All consumers—and the economy at large—would greatly benefit from a real-time payment system, but lower-income consumers would benefit the most. For those living paycheck to paycheck, instant access to bank deposits could limit the need to rely on products like payday loans. A real-time payment system could also ensure that families can utilize any stimulus payments, such as the EIPs, immediately to pay for necessities like rent and groceries. This system could be established through regulation by the Federal Reserve or by wider adoption of The Clearing House's Real-Time Payments (RTP) Network,18 an existing real-time payments platform. The Federal Reserve has also announced a plan to implement real-time payments through their FedNow service, but they expect that the service will not be available until 2023 or 2024.19 7 FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM

Smarter anti-money laundering requirements. When a person applies for a bank account, they are screened against the "do not bank" list, which includes people with past money laundering or fraud violations. Of those households that are unbanked, 14% have cited identification, credit or former bank account issues as the reason for not having an account.20 Oftentimes, anti-money laundering (AML) requirements lead banks to deny customers with any past record (including involuntary account closure or overdraft fees), rather than just denying high-risk individuals, like those suspected of money laundering. For universal accounts to be accessible, they should be exempt from or have smarter AML requirements, so that innocent people are not barred from accessing the financial system.21

Additional services like mobile banking, debit cards, automatic bill-pay, and savings incentives and tools. These services would make universal accounts much more attractive to everyday consumers. They would also allow financially underserved households to take advantage of the conveniences of online and mobile banking by providing them easy access to their bank accounts, as well as tools with which to manage their spending and savings.

A Universal Account System Would Support Lower-Income Households

Universal accounts can broaden financial access for underserved households. A key benefit of creating a universal account system is About 12 million its accessibility to unbanked and underbanked households. Universal accounts would pose low-income Americans fewer of the constraints, such as balance were at risk of missing out requirements and fees, that make traditional bank accounts costly for lower-income households. In on the first round of addition, an individual's banking history (such as overdrawing an account or having an account stimulus payments involuntarily closed) would not prevent them from because they could not opening a new account. Online access to universal accounts could also benefit households receive them automatically. living in "banking deserts"—areas without brick- and-mortar bank branches—which tend to be concentrated in low-income communities and SOURCE: "Aggressive State Outreach Can Help Reach the 12 Million Non-Filers Eligible for Stimulus 22 communities of color. Payments," Center on Budget and Policy Priorities FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM 8

Having access to transaction and savings accounts can improve households' financial security. As discussed earlier, there are many benefits to participating in the financial system. Having a checking account can help families better manage their finances, and is often easier and less time-consuming than visiting a bank branch. Lower-income households, particularly those of color, would have a safer way of accessing their money quickly, reducing the need to turn to alternative financial services. Finally, savings accounts can help families manage crises by acting as emergency funds, while also allowing them to set aside money for longer-term, wealth-building goals.23

Universal accounts would allow for easier disbursement of public benefits. During the COVID-19 pandemic, one of the main challenges the Treasury Department faced in distributing EIPs was not having recipients' bank account information.24 Having a standardized, universal account system would make it easier for the government to match people with their account information and send them payments. During crises like the pandemic, a real-time payment system would also ensure that families can have quick access to much-needed funds.

Using State EBT Cards to Streamline Government Payments

Another possibility for disbursing government payments is through state electronic benefit transfer (EBT) cards. State EBT cards function much like debit cards and are used to issue benefits, such as Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) payments, to individuals. Early in the COVID-19 pandemic, the option of delivering stimulus payments through EBT cards was explored, but it was ultimately dismissed for lack of time. Unfortunately, many of the lowest-income households received the first round of stimulus payments very late, as they had not filed a recent tax return because of their low incomes and thus did not qualify for receiving the payments through direct deposit. These households were also the least likely to request their stimulus payments, given that many do not file taxes. Using state EBT cards to disburse stimulus payments could be a quick, effective way to reach this population, especially as many of them qualify for public benefitsi and already use these cards. It could also serve as an outreach mechanism to those who may not otherwise seek out their payments.

i "State SNAP Agencies Can Help Connect SNAP Households With Federal Economic Impact Payments," Center on Budget and Policy Priorities

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Initiatives to Increase Banking Access Could Serve as Models for a Universal Account System

There are several existing initiatives, as well as new proposals, that aim to improve banking access in the U.S. and other countries. Each of the three examples below presents a model for what a potential universal account system could look like, including the potential benefits and drawbacks of each approach.

FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM 10

Banks and credit unions could be required to offer basic, low-cost transaction accounts.

One of the main obstacles in getting more lower-income families banked is the cost of having an account.25 To mitigate this, federal regulators could require banks and credit unions to offer low- or no- cost transaction accounts.26 Since these institutions are chartered by the federal or state governments, they have a duty to serve their communities, and providing an account that is accessible to all community members falls within this scope.27

Successful initiatives to make low-cost bank accounts more widely available have already been implemented. For example, the Bank On initiative, created by the Cities for Financial Empowerment (CFE) Fund, is a collaborative effort between the CFE Fund and national and regional financial institutions to encourage the availability of safe, low-cost financial services. The initiative has issued Bank On National Account Standards—which include low or no fees, no overdraft fees, capabilities and online bill pay—that financial institutions must meet in order for their accounts to be Bank On-certified. Bank On has 85 coalitions nationwide and continues to expand. A 2017 pilot study has shown that there is high demand and widespread use of Bank On-certified accounts.28 Recently, the American Bankers Association (ABA) urged all banks to consider offering Bank On-certified accounts so they can reach more unbanked and underbanked individuals.29

Potential benefits . Offering low-cost bank accounts through mainstream financial institutions would be relatively simple to achieve. It would require a regulatory change, but the infrastructure already exists, and several large financial institutions have participated in initiatives such as Bank On.

. Low-cost bank accounts can be beneficial for both consumers and banks. In the Bank On pilot study, there was regular usage of accounts among customers. Participating banks also attracted new customers—72% of the accounts opened as part of the pilot in 2017 belonged to customers new to the financial institution.30 Possible drawbacks . If universal accounts were to be offered through banks, a potential obstacle is consumers' mistrust of the banking industry. Among unbanked households, 30% have said that one reason for not having a bank account is that they do not trust banks.31 This distrust may stem from negative past experiences with bank accounts, such as a misunderstanding of bank policies that led to unexpected fees. Nevertheless, this perception of banks would need to be addressed, and the policies surrounding the low-cost bank accounts made clear, in order for these accounts to reach the most vulnerable populations.

. A significant proportion of large national consumer banks rely on revenue from overdraft fees, despite these fees placing a disproportionate burden on low-income consumers.32 While low- cost accounts can attract more customers to the banks and credit unions that offer them, they could also reduce profitability for those banks that rely on high-cost overdraft fees. If financial institutions were mandated to offer these accounts, there could be some pushback among banks that would lose their profits.

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FedAccounts, administered by the Federal Reserve, could serve as a public option for banking.

In recent years, and especially during the COVID-19 pandemic, the idea of FedAccounts has grown in popularity. FedAccounts would be government-issued bank accounts, administered by the Federal Reserve, that are low-cost and accessible to all individuals. There are several pieces of legislation that have proposed versions of these accounts. One example is the Automatic Boost to Communities Act (H.R. 6553), introduced by Rep. Rashida Tlaib (D-MI-13) in April 2020, which includes a provision that would allow Congress to task the Federal Reserve with administering FedAccounts to all U.S. citizens, residents and businesses. The act also allows for “online account access, automatic bill-pay, mobile banking, and automatic teller machines maintained in conjunction with the United States Postal Service at its physical locations.”33 Potential benefits . FedAccounts would have minimal associated fees and no minimum balance requirements, making them a good option for low-income households.

. Additional features, such as online access and debit cards, could make FedAccounts more accessible and convenient to consumers.

. Partnership with the U.S. Postal Service (USPS) can make FedAccounts more inclusive for those living in banking deserts, particularly low-income communities and communities of color. While some of these communities may lack bank branches, they do have branches.34 Possible drawbacks . The Federal Reserve has no experience in consumer operations, so it would need to create a robust system to implement FedAccounts. In essence, FedAccounts would be an extension of what the Federal Reserve already does quite efficiently for banks: maintain a ledger with protocols for debiting and crediting.35 To extend this service to consumers, the Federal Reserve would need to scale up these existing functions, expand into retail operations, and dedicate resources to creating a web portal, mobile phone application and more. While creating this network of services would be challenging, thousands of banks have successfully created robust retail operations, and a multitude of other governmental entities have successfully implemented direct, public services.36

. The creation of FedAccounts may disrupt the existing banking industry if enough people choose to keep their money at the Federal Reserve, which could mean that private financial institutions are negatively impacted. While more research is needed on how a public option for banking might affect banks, the case can be made that FedAccounts could improve the industry’s responsiveness to consumers’ needs. If FedAccounts prove to be popular, this could create an incentive for banks to develop safe, attractive and accessible financial products themselves.

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The Postal Banking Act would allow USPS to offer low-cost banking services.

Introduced by Sens. (D-NY) and (I-VT), the Postal Banking Act (S. 4614) would authorize USPS locations across the country to act as nonprofit banks, offering low-cost checking and savings accounts, automated teller machines (ATMs), mobile banking and low-interest loans.37

Many other countries have postal banking. The United Kingdom (UK), for example, has utilized its postal service to increase access to bank accounts and small dollar loans. The UK's Post Office, which is a government-owned company, has a partnership with the to offer bank accounts and other financial services to consumers. Currently, the company administers Post Office card accounts, which are simple bank accounts that allow consumers to collect pension, benefit or tax payments that can be withdrawn at any Post Office location.38 The Post Office also functions as a broker for a variety of other financial services, including withdrawal, money transfer and deposit services for users of a multitude of banks in the UK.39 Potential benefits . Compared to other lenders, USPS can offer banking services to low-income customers at a reduced cost. This is because of low overhead costs and economies of scale; USPS can use its existing branches and clientele to expand into the banking space.40 . While the lack of access to physical bank branches is not one of the primary drivers of financial exclusion, postal banking could still benefit those living in banking deserts—especially in rural areas. Since post offices are located in most communities, underserved individuals would have physical access to a bank. This could reduce their reliance on predatory services. . Beyond supporting financially underserved households, postal banking could increase revenue for the USPS by approximately $9 billion per year.41 This could help strengthen the agency, which has been plagued by financial problems. . There is a precedent for postal banking in the U.S. The Postal Savings System, which operated from 1911 to 1966, was created to help unbanked, low-income people and recent immigrants build savings. The system was popular and widely used for several decades, with deposits reaching a peak of $3.4 billion in 1947.42 Possible drawbacks . To expand into the banking space, USPS would need to develop new infrastructure and services in an area in which it has little experience. This would include efforts such as training or hiring new staff, creating the infrastructure for online and mobile banking and developing expertise in offering credit. Expanding its services in this way would also likely come with significant expenses. . More thinking needs to be done around AML requirements with regard to postal banking. AML compliance can be costly for banks, so if USPS were required to comply with AML regulation, the agency would have to determine how to pay for it. This cost could be an obstacle, especially given USPS's poor financial situation. . As with FedAccounts, postal banking could create a disruption to the banking industry. Again, more research would have to be done on potential negative consequences for financial institutions. However, these should be weighed against the benefit to society of greater financial inclusion, which postal banking could engender. 13 FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM

CONCLUSION

The magnitude of financial exclusion in the U.S. today is very large. For those families who lack sufficient access to bank accounts, the consequences have both short- and long-term implications. High fees can deplete households' hard-earned wages, while lack of access to money management tools can keep them from building wealth. A universal account system, if structured correctly, can help families become integrated into the financial system and improve their financial stability. It can also strengthen the nation's public benefits disbursement system, which, as became apparent during the COVID-19 pandemic, needs streamlining to better reach those in need.

Existing proposals for what a universal account system could look like, such as low-cost bank accounts, FedAccounts and postal banking, have benefits and drawbacks. More research and discussion among the key players involved could help resolve some of the outstanding questions and points of conflict. Ultimately, the main consideration should be accessibility for the most vulnerable individuals—low- income people, particularly people of color—who deserve to benefit from financial inclusion. Universal accounts can help these households take steps towards building financial security and achieving long- term wealth. ENDNOTES

1 “2017 FDIC National Survey of Unbanked and Underbanked Households,” Federal Deposit Insurance Corporation, October 22, 2018, https://www.economicinclusion.gov/surveys/2017household/. 2 Ibid. 3 Ibid. 4 “Unbanked Households,” Prosperity Now Scorecard, January 2020, https://scorecard.prosperitynow.org/data-by- issue#finance/outcome/unbanked-households. 5 “Consumers and Mobile Financial Services 2016,” Board of Governors of the Federal Reserve System, March 2016, https://www.federalreserve.gov/econresdata/mobile-devices/2016-executive-summary.htm. 6 Ibid. 7 "Providing Non-Bank Financial Services for the Underserved," United States Postal Service Office of Inspector General, January 27, 2014, https://www.uspsoig.gov/document/providing-non-bank-financial-services-underserved. 8 “Payday and Installment Loans,” National Consumer Law Center, 2019, https://www.nclc.org/issues/high-cost-small- loans/payday-and-installment-loans.html. 9 “Predatory Lending,” National Association of Consumer Advocates, 2019, https://www.consumeradvocates.org/for- consumers/predatory-lending. 10 “Unbanked Households,” Prosperity Now Scorecard. 11 Patrick Bayer, Fernando Ferreira and Stephen L. Ross, “What Drives Racial and Ethnic Differences in High Cost Mortgages? The Role of High Risk Lenders,” National Bureau of Economic Research, February 2016. DOI 10.3386/w22004. 12 Peter Ganong, Damon Jones, Pascal Noel, Diana Farrell, Fiona Greig and Chris Wheat, “Wealth, Race, and Consumption Smoothing of Typical Income Shocks,” University of Chicago Becker Friedman Institute, April 2020, https://bfi.uchicago.edu/working-paper/wealth-race-and-consumption-smoothing-of-typical-income-shocks/. 13 From 2011 to 2017, Prosperity Now (then CFED) contracted with the U.S. Department of Health and Human Services' Administration for Children and Families to provide capacity-building support to AFI grantees. 14 Joanna Ain and David Newville, “Promise Accounts: Matched Savings to Help Families Get Ahead,” Prosperity Now, July 2019, https://prosperitynow.org/resources/promise-accounts-matched-savings-help-families-get-ahead. 15 As defined here, "universal accounts" are distinct from the idea of Universal Savings Accounts (USAs). USAs, which were proposed in the Family Savings Act of 2018, are tax-preferred accounts with fewer limits and restrictions that would largely benefit wealthy households. For more, see Brendan Duke, "'Universal ' Proposal in New Republican Tax Bill is Ill-Conceived," Center on Budget and Policy Priorities, September 19, 2018, https://www.cbpp.org/research/federal-tax/universal-savings-account-proposal-in-new-republican-tax-bill-is-ill- conceived. 16 Peter Smith, Shezal Babar and Rebecca Borne, "Overdraft Fees: Banks Must Stop Gouging Consumers During the COVID-19 Crisis," Center for Responsible Lending, June 2020, https://www.responsiblelending.org/research- publication/banks-must-stop-gouging-consumers-during-covid-19-crisis. 17 For example, see "Bank On National Account Standards (2019-2020)", Cities for Financial Empowerment Fund, https://cfefund.org/bank-on-national-account-standards-2019-2020/ and "FDIC Model Safe Accounts Template," Federal Deposit Insurance Corporation, April 2012, https://www.fdic.gov/consumers/template/template.pdf. 18 "Real-Time Payments for All Financial Institutions," The Clearing House, https://www.theclearinghouse.org/payment- systems/rtp. 19 “Federal Reserve announces plan to develop a new round-the-clock, real-time payment and settlement service to support faster payments,” Board of Governors of the Federal Reserve System, August 2019, https://www.federalreserve.gov/newsevents/pressreleases/other20190805a.htm. 20 “2017 FDIC National Survey of Unbanked and Underbanked Households.” 21 Aaron Klein, "How to fix the Covid stimulus payment problem: Accounts, information, and infrastructure," The Brookings Institution, August 19, 2020, https://www.brookings.edu/research/how-to-fix-the-covid-stimulus-payment- problem-accounts-information-and-infrastructure/. 22 Terri Friedline and Mathieu Despard, "Life in a Banking Desert," The Atlantic, March 13, 2016, https://www.theatlantic.com/business/archive/2016/03/banking-desert-ny-fed/473436/. 23 Joanna Ain, J. Mark Iwry and David Newville, "Saving for Now & Saving for Later: Rainy Day Savings Accounts to Boost Low-Wage Workers' Financial Security," Prosperity Now, June 2018, https://prosperitynow.org/sites/default/files/resources/Saving-for-Now-and-Saving-for-Later-Rainy-Day-Savings- Accounts-to-Boost-Low-Wage-Workers-Financial-Security.pdf. 24 Klein, "How to fix the Covid stimulus payment problem."

15

25 "2017 FDIC National Survey of Unbanked and Underbanked Households.” 26 In October 2020, the Federal Reserve issued a proposal for reforming the Community Reinvestment Act (CRA), which could help facilitate banking access for lower-income individuals. The proposal would retain the CRA's service test for large retail banks, which evaluates whether a bank's range of services and branch locations meet the needs of low- and moderate-income communities. On the other hand, the final rule issued by the Office of the Comptroller of the Currency in May 2020 does not retain the CRA's service test. 27 Klein, "How to fix the Covid stimulus payment problem." 28 “The Present and Future of Bank On Account Data: Pilot Results and Prospective Data Collection,” CFE Fund and Federal Reserve Bank of St. Louis, 2017, https://cfefund.org/the-present-and-future-of-bank-on-account-data-pilot- results-and-prospective-data-collection/. 29 "ABA Urges America's Banks to Offer Bank On-Certified Accounts," American Bankers Association, October 19, 2020, https://www.aba.com/about-us/press-room/press-releases/aba-urges-americas-banks-to-offer-bank-on-certified- accounts. 30 “The Present and Future of Bank On Account Data." 31 "2017 FDIC National Survey of Unbanked and Underbanked Households.” 32 Gideon Weissman and Edmund Mierzwinski, “Big Banks, Big Overdraft Fees,” US PIRG Education Fund, December 2016, https://uspirg.org/reports/usp/big-banks-big-overdraft-fees. 33 Automatic Boost to Communities Act, H.R. 6553, 116th Cong. (2020) at Sec. 3. 34 Mehrsa Baradaran, "The Post Office Banks on the Poor," The New York Times, February 7, 2014, https://www.nytimes.com/2014/02/08/opinion/the-post-office-banks-on-the-poor.html. 35 Morgan Ricks, John Crawford and Lev Menand, "FedAccounts: Digital Dollars," Vanderbilt Law Research Paper 18- 33, UC Hastings Research Paper No. 287, George Washington Law Review, Forthcoming, April 15, 2020, https://ssrn.com/abstract=3192162. 36 Ibid. 37 “Senators Gillibrand and Sanders Introduce Postal Banking Act To Fund United States Postal Service and Provide Basic Financial Services to Underbanked Americans,” Office of U.S. Sen. Kirsten Gillibrand, 17 September 2020, https://www.gillibrand.senate.gov/news/press/release/senators-gillibrand-and-sanders-reintroduce-postal-banking-act- to-fund-united-states-postal-service-and-provide-basic-financial-services-to-underbanked-americans. 38 “Post Office Card Account,” The Post Office, 2020, https://www.postoffice.co.uk/post-office-card-account. 39 “What is Everyday Banking?”, The Post Office, 2020, https://www.postoffice.co.uk/everydaybanking. 40 Mehrsa Baradaran, "It's Time for Postal Banking," Harvard Law Review Forum, February 24, 2014, https://harvardlawreview.org/2014/02/its-time-for-postal-banking/. 41 “Senators Gillibrand and Sanders Introduce Postal Banking Act." 42 "Postal Savings System," United States Postal Service, July 2008, https://about.usps.com/who-we-are/postal- history/postal-savings-system.pdf.

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