Under-Banked = Under-Located

I read with interest this week about Well Fargo’s Banking Inclusion Initiative. A 10-year commitment to “accelerate un-banked individuals’ access to affordable mainstream accounts and help un-banked communities have easier access to low-cost banking.” Here’s the link.

This appears to be a well-thought out and comprehensive platform that is long overdue and clearly needed in the banking industry-at-large. The numbers speak for themselves: More than seven million U.S. households are without a checking or savings account and over 50% of those households are African-American, Hispanic, and Native American.

There are eight key bullets in the initiative ranging from “deepening our existing relationships with Black-owned minority depository institutions (MDI’s)” to “broadening our collaboration with CFE Fund and local Bank On coalitions.”

All excellent objectives including the last one: “With more than 25% of our branches in LMI community census tracts, we will introduce a new program within LMI neighborhood branches that will be designed around the needs of the diverse communities we serve.”

The problem with the last initiative — at least in my mind — is that it comes last. To me, a key to reducing the number of un-banked households in a community is to have more bank branches – including credit unions – in a community.

Digital initiatives are vital, no doubt, but in under-banked communities, people want to see and know their banker. Exacerbating this issue is the fact that many in these communities have limited or no online access. They want to have face-to-face communication with people they know and trust. Who reside in their community and share the same interests and concerns. Who understand the backgrounds and challenges that exist every day in and around LMI communities.

I wish Wells Fargo all the best and admire their commitment to this initiative. I also wish they would re-number their objectives so that branch expansion in under-represented communities ranks higher on the priority list.