NORTH CAROLINA BANKING INSTITUTE Volume 23 | Issue 1 Article 23 3-1-2019 Banking at the Fed with FedAccounts: The eD mise of Commercial Banks? E. Kylie Norman Follow this and additional works at: https://scholarship.law.unc.edu/ncbi Part of the Banking and Finance Law Commons Recommended Citation E. K. Norman, Banking at the Fed with FedAccounts: The Demise of Commercial Banks?, 23 N.C. Banking Inst. 451 (2019). Available at: https://scholarship.law.unc.edu/ncbi/vol23/iss1/23 This Note is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Banking Institute by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact
[email protected]. BANKING AT THE FED WITH FEDACCOUNTS: THE DEMISE OF COMMERCIAL BANKS? I. INTRODUCTION Approximately 32% of the population, or 90.6 million people, do not have access to traditional banking services in America.1 Within this population the demographics vary considerably among different racial and ethnic groups.2 However, certain groups are more likely to be af- fected than others.3 For example, unbanked and underbanked consumers are more likely than fully banked consumers to have lower incomes and be younger, minority, female, unmarried, and unemployed.4 The terms unbanked and underbanked are distinct.5 Unbanked refers to consumers who have no formal relationship at a bank.6 The un- derbanked are consumers who have a formal relationship with a main- stream bank but primarily rely on alternative financial institutions for their banking or credit needs.7 Because mainstream banking excludes this segment of the popu- lation from services offered to fully banked consumers, the unbanked and underbanked are more likely to use alternative financial service provid- ers, a sector of the financial industry often referred to as “fringe 1.