Our Position

Financial Inclusion for Underserved and Unbanked Individuals


  • ICBA supports community banks’ development and use of technology to more effectively and efficiently provide access to financial services and education for existing and potential customers.
  • Guidelines developed for loan products and services for underserved and unbanked individuals should be easily understood by bankers and flexible enough to be adaptable to various markets and operations.
  • To expand the availability of affordable products for consumers, it is important to identify barriers to their use, including regulatory and statutory obstacles that may discourage development of these products. Solutions should be created on an interagency basis.
  • ICBA supports voluntary, effective financial education. Increasing financial literacy protects consumers, fosters financial stability, and benefits individuals, underserved communities, and our nation as a whole.
  • ICBA strongly urges the CFPB not to issue new prescriptive requirements that would disrupt the traditional data and business models that community banks have long employed to safely and soundly make credit decisions.
  • ICBA welcomes the interagency guidance on the use of alternative data in credit underwriting, but stresses that field examiners must continue to give banks leeway to find innovative ways to provide credit to unserved and underserved consumers.


Financial Health
Nearly forty percent of Americans do not have $400 in cash for emergencies, 7.1 million households do not have any relationship with the banking system, and another 24.2 million households are under-banked. In total, only 30 percent of Americans are spending, saving and borrowing in a manner that indicates a financially healthy life. However, community banks are in an optimal position to help consumers improve their financial lives. Sixteen percent of community bank branches are located in LMI counties and ten percent of all community bank HMDA loans were made to low-income individuals.

Individuals with little or no relationship with a bank may struggle to manage their funds effectively and to save, prepare, or borrow for emergencies. Technology can play a role in raising awareness among such individuals of available products and services and providing access to them.

Affordable Products
Many community banks offer various affordable loan and deposit products and services to their customers. ICBA welcomes opportunities to expand ways to serve new, existing, and potential customers, but guidelines must be simple, easily understood by bankers and examiners, and flexible enough to allow individual community banks to adapt them to their own market and operations. Overly proscriptive requirements could add to burdens and costs and have the unintended consequence of discouraging these types of products.

Financial Literacy
Managing money wisely and making effective financial decisions is critical to excelling in life and enjoying a secure financial future. Millions of Americans do not have a relationship with a depository institution because they do not understand the system. Community banks engage in a wide range of financial education efforts, many in conjunction with local schools and civic groups, and promote financial literacy programs for all consumers, especially those programs that help the underserved, disadvantaged, and emerging markets.

Alternative Data
The CFPB’s research has indicated that potentially millions of consumers previously locked out of mainstream credit could become eligible for credit through the use of alternative data and modeling. Alternative data and modeling techniques are changing the way that some financial service providers conduct business. However, new regulations that require community banks to incorporate alternative data into their credit decision processes could prevent community banks from making loans to those who need access to credit the most, increase costs, and stifle innovation.

Staff Contact

Michael Emancipator

Vice President, Regulatory Counsel

Washington, DC