FDIC Initiatives for Unbanked and Underbanked Americans

The Federal Deposit Insurance Corporation administers a sustained portfolio of programs designed to bring households without bank accounts — or with only marginal access to the banking system — into formal financial institutions. These efforts operate through survey research, bank partnership frameworks, and financial education curricula, each addressing a distinct barrier to banking access. Understanding the scope and mechanics of these initiatives matters because exclusion from the banking system carries measurable economic costs for affected households, including reliance on high-cost alternative financial services such as check cashers and payday lenders.

Definition and scope

The FDIC defines "unbanked" households as those in which no member holds a checking or savings account at a federally insured depository institution. "Underbanked" households hold a bank account but rely on nonbank financial products — such as money orders, nonbank check cashing, payday loans, or pawn shop loans — for core financial transactions. This two-tier distinction is central to how the FDIC designs interventions, because the barriers facing each group differ in kind, not merely in degree.

The agency's primary measurement instrument is the National Survey of Unbanked and Underbanked Households, conducted biennially in partnership with the U.S. Census Bureau. The 2021 survey — the most recent edition using the legacy underbanked definition before methodological revision — found that approximately 5.9 million U.S. households (4.5 percent of all households) were unbanked (FDIC 2021 National Survey of Unbanked and Underbanked Households). The 2023 survey reported that 4.2 percent of U.S. households were unbanked, representing roughly 5.6 million households (FDIC 2023 National Survey of Unbanked and Underbanked Households).

The initiatives described on this page sit within a broader FDIC mandate to promote public confidence and stability in the financial system. The FDIC's mission and mandate extend beyond deposit insurance to encompass consumer protection and financial inclusion as explicit institutional objectives.

How it works

FDIC initiatives for unbanked and underbanked populations operate through three primary mechanisms:

1. Survey and research infrastructure — The biennial household survey, conducted with the Census Bureau, generates statistically representative data on banking access across demographic and geographic lines. This data informs regulatory policy, bank examination standards under the Community Reinvestment Act, and outreach targeting.

2. Bank partnership programs — The FDIC facilitates direct engagement between supervised institutions and unbanked communities. The flagship vehicle for this has been the FDIC Model Safe Accounts pilot framework, which encouraged institutions to offer low-cost, low-barrier transaction accounts with no minimum balance requirements, overdraft-free structures, and straightforward fee disclosures.

3. Financial education delivery — The Money Smart curriculum, first released in 2001 and updated across multiple versions since, provides modular financial literacy content spanning basic account management, credit, borrowing, and saving. Money Smart is available in print, online, and instructor-led formats. A specialized version — Money Smart for Small Business — was developed in collaboration with the Small Business Administration. Detailed coverage of Money Smart as a standalone program is available at FDIC Money Smart Financial Education.

The FDIC does not lend money to consumers, open accounts on their behalf, or directly subsidize banking services. Its role is regulatory facilitation — setting examination criteria that reward bank outreach, publishing model account templates, and distributing educational materials at no cost to partner organizations.

Common scenarios

Scenario 1: First-time account opening for an immigrant household
A household with limited U.S. credit history and no Social Security number faces rejection under standard bank onboarding requirements. The FDIC's guidance to supervised institutions clarifies that an Individual Taxpayer Identification Number (ITIN) is an acceptable form of identification under Customer Identification Program rules (FDIC Consumer Compliance Supervision), and Money Smart materials are available in Spanish, Chinese, Vietnamese, Korean, and Tagalog, among other languages.

Scenario 2: Returning citizen with prior ChexSystems record
Individuals with overdraft history may be screened out of standard accounts by consumer reporting agency records. FDIC outreach to banks has encouraged the development of "second chance" accounts — products that bypass ChexSystems screening or apply modified criteria — as a mechanism for reintegrating these consumers into the formal banking system.

Scenario 3: Rural community with limited branch access
Geographic isolation presents a structural barrier distinct from identification or credit history problems. FDIC research has examined mobile banking and FDIC-supervised community banks' penetration in rural markets, informing CRA examination criteria under FDIC Community Reinvestment Act Oversight.

Decision boundaries

The FDIC's authority in this domain is limited by institutional design. Key boundaries include:

• Regulated vs. nonbank entities — FDIC outreach and education programs apply to FDIC-supervised institutions (state-chartered banks that are not members of the Federal Reserve System). Credit unions fall under the National Credit Union Administration (FDIC vs. NCUA), and nonbank alternative financial service providers — check cashers, payday lenders — are regulated primarily by state agencies and the Consumer Financial Protection Bureau.

• Voluntary vs. mandatory bank participation — No FDIC regulation compels a supervised bank to offer a model safe account or adopt the second-chance account framework. CRA examination criteria create incentives, but product design remains at institutional discretion.

• Education vs. advice — Money Smart curricula convey financial concepts; they do not constitute legal, tax, or investment advice. The program is delivered through libraries, community organizations, and employer benefit programs, not through individual counseling by FDIC staff.

• Survey scope vs. policy scope — The household survey measures the size of the unbanked population but does not itself constitute an enforcement or compliance mechanism. Survey data informs supervisory priorities but does not trigger automatic regulatory action against specific institutions.

The distinction between unbanked and underbanked populations is also operationally significant: programs targeting unbanked households focus on first account acquisition, while underbanked-focused efforts address product substitution — specifically, reducing reliance on nonbank services that typically carry higher transaction costs than equivalent bank products. The FDIC's broader statistical infrastructure, including data accessible through FDIC Statistics on Depository Institutions, provides the institutional banking context within which household access data is interpreted.

For a full overview of FDIC programs and resources, the site index provides navigational access to all major topic areas maintained on this domain.