FDIC Model Safe Accounts Pilot
On January 1, 2011, the FDIC launched the Model Safe Accounts Pilot. The pilot is a case study designed to evaluate the feasibility of financial institutions offering safe, low-cost transactional and savings accounts that are responsive to the needs of underserved consumers. The nine financial institutions selected to participate in the pilot will offer electronic deposit accounts with core product features identified in the FDIC Model Safe Accounts Template and may offer auxiliary services also identified in the template. A list of the pilot financial institutions is available at http://www.fdic.gov/consumers/template/banks.html.
Over One-Quarter of U.S. Households are Underserved:
The FDIC is committed to ensuring that all U.S. households have access to safe and affordable banking services. Access to mainstream financial services at an insured institution provides consumers with a safe place to save, conduct basic financial transactions affordably, build a credit history and access credit on favorable terms, and achieve financial security. Yet, according to the FDIC's landmark study, the FDIC Survey of Unbanked and Underbanked Households, more than one-quarter of U.S. households are underserved. Approximately 7.7 percent of Americans are "unbanked," which means that they lack a bank account, and 17.9 percent more are "underbanked," which means that they have bank accounts but also rely on non-bank alternative financial services. Minorities and lower-income households are much more likely to be underserved. An estimated 21.7 percent of black households and 19.3 percent of Hispanic households are unbanked and one in five households earning under $30,000 per year are unbanked.
Description of Template:
The FDIC Model Safe Accounts Template describes features of electronic deposit accounts that are designed to meet the need of underserved and LMI consumers. Pilot banks will be strongly encouraged to market the products to those groups.
The largely electronic accounts limit acquisition and maintenance costs and transactional accounts will be checkless, allowing withdrawals only through automated teller machines, point-of-sale terminals, automated clearinghouse preauthorizations, and other automated means. There will be no overdraft or non-sufficient funds fees associated with the transactional accounts. All of the accounts will be FDIC-insured; be subject to applicable consumer protection laws, regulations, and guidance; and have reasonable rates and fess that are proportional to their cost. A complete description of the accounts features is available in FDIC Model Safe Accounts Template. Background information on the template is available at http://www.fdic.gov/consumers/template/background/
Pilot Parameters and Reporting:
The FDIC Model Safe Accounts Pilot began on January 1, 2011 and will run over the course of one year. The FDIC will collect data on the viability of the accounts about 45 days after the end of each quarter. Information collection will focus on the volume, use, success, and profitability of the accounts. Individual reports submitted by institutions will remain confidential, and the FDIC will publish general findings from the pilot.
The FDIC recognizes that pilot banks are volunteers and that their information systems vary widely. The FDIC will work with pilot banks to help these institutions provide the best data possible. Information will not be used to subject participating institutions to additional examination scrutiny beyond the regular supervisory process. Participation in the pilot will have no effect on examination frequency.
Benefits to Participating Institutions:
Offering accounts similar to the FDIC Model Safe Accounts may enable institutions to reach out to new consumers or increase usage of bank products by existing customers. Moreover, participation in the pilot can result in an increase in community goodwill as it could demonstrate an institution's commitment to serve all income levels and help the FDIC provide a roadmap for others in the industry. The FDIC does not endorse a particular product or institution; however, the pilot and its results will be discussed at meetings open to the public and the press. Press releases and reports also will be issued that will likely include the names of participating institutions. Finally, an insured institution that offers these accounts within its assessment area may be eligible to receive favorable consideration under the CRA for providing community development services.
Resources:
A list of the participating pilot banks is available at http://www.fdic.gov/consumers/template/banks.html.
Information on the FDIC Board Approval of the FDIC Model Safe Accounts Pilot is available at http://www.fdic.gov/news/news/press/2010/pr10183.html.
The FDIC Model Safe Accounts Template (PDF Help)
The FDIC Survey of Unbanked and Underbanked Households is available at http://www.fdic.gov/householdsurvey/.
Information on the FDIC Advisory Committee on Economic Inclusion is available at http://www.fdic.gov/about/comein/.
Information and comments on the FDIC Proposed Templates for Safe, Low-Cost Transactional and Basic Savings Accounts are available at http://www.fdic.gov/consumers/template/background/.
Information on the FDIC Small Dollar Loan Program is available at http://www.fdic.gov/smalldollarloans/.
Information on all of the FDIC’s economic inclusion initiatives is available at http://www.economicinclusion.gov/.
Questions and comments about the FDIC Model Safe Accounts Pilot should be sent to SafeAcctPilot@fdic.gov.
