By Matt Scuffham
NEW YORK (Reuters) -Wells Fargo has launched a 10-year commitment to help unbanked individuals in the United States gain access to affordable, mainstream bank accounts, the company said on Monday.
The initiative aims to help Black and African Americans, Hispanics, and Native Americans, who account for more than half of the country's 7 million unbanked households, have easier access to low-cost banking, Wells Fargo (NYSE:WFC) said.
As part of the plan, the bank has committed to redesigning 100 branches in low-to-middle income neighborhoods to enable one-to-one consultations, offer digital banking access and conduct financial health seminars.
Banks are under pressure from lawmakers and advocates to increase financial inclusion and access to banking services for underserved communities.
The need to address the issue had been heightened by the COVID-19 pandemic. The Federal Deposit Insurance Corporation has said the number of unbanked households will likely increase in the aftermath of the pandemic.
According to FDIC data, 12.2% of Hispanic households, 13.8% of Black households, and 16.3% of American Indian/Alaska Native households in the U.S. don’t have access to a mainstream checking account – compared with 2.5% of White and 1.7% of Asian households.
"We recognize the high number of unbanked households is a complex and long-standing issue that will require gathering the best minds, ideas, products and educational resources from across our communities to bring about change," Wells Fargo Chief Executive Charlie Scharf said in a statement.
Wells Fargo is focusing on three areas with the initiative - expanding access to financial education and advice, increasing access to affordable products and launching a National Unbanked Advisory Taskforce.
The taskforce will include representatives from the National Association for the Advancement of Colored People (NAACP), the League of United Latin American Citizens (LULAC) and the National Congress of American Indians (NCAI).
Through the initiative, the bank said it would deepen its existing relationships with Black-owned Minority Depository Institutions (MDIs), which are more likely to lend in underserved minority communities. That will include allowing customers of those institutions to withdraw cash from Wells Fargo's ATMs and incur no Wells Fargo fees.
It will also increase funding and support to expand the Credit Builders Alliance (CBA) low-cost, credit-building consumer loan program. That will enable more low-to-moderate income individuals to meet short term cash needs and establish or improve their credit scores, it said.
Wells Fargo declined to say how much it is investing in the initiative.