Bank compliance with national transaction account standards: Evidence from a mid‐western metropolitan area

Abstract

Increasing the fully banked population is related to the availability of affordable bank accounts. This study investigates the factors that are associated with bank response to voluntary national bank account standards for an affordable transaction account. We also examine the degree to which account information is available from bank websites. Account feature data were collected from public bank websites and bank tellers (N = 108) in a mid-western metropolitan area. Results suggest that most banks offer an account that meets the majority of the standards. On average, bank websites are missing information about eight (44%) of the voluntary standards. There is weak evidence to suggest that bank asset size is associated both with the number of standards met and the numbers of standards about which a viewer cannot assess from information on their website. Practice and policy implications of the voluntary standards on the availability of affordable transaction accounts are discussed.

Unbanked and impoverished? Exploring banking and poverty interactions over time

“…With these factors in mind, closing the Black/White and Hispanic/White gap in unbanked rates may prove more challenging than building new access points through branches or technology. Still, efforts such as the Bank On movement, which aims to provide households with options for accessing low‐cost bank accounts, could help in this regard (Birkenmaier et al, 2021).…”

“…Our results show that minimum balance requirements are the most cited reason for households being unbanked with around 8% of Black households, 6% of Hispanic households, and 1% of White households being unbanked for this reason. Efforts such as the Bank On movement, which aims to provide households with options for accessing low‐cost bank accounts, could help in this regard (Birkenmaier et al, 2021).…”

“I Don’t Like All Those Fees” Pragmatism About Financial Services Among Low-Income Parents

“…Even if low-income parents desire better financial services, their access to affordable banking may be limited. Birkenmaier et al ( 2021a , 2021b ) examined the perspective of low-income consumers in one community on the form of basic banking services available to them. They found the information that banks provided about services and costs or fees widely varied, even among firms adhering to voluntary basic banking standards.…”

“…Hayashi ( 2016 ), a researcher at the Federal Reserve of Kansas City, conducted interviews with consumers that focused on banking services and payment systems, but not broader financial services; this also did not include a specific focus on the issues low-income parents specifically identify. Birkenmaier et al ( 2021a , 2021b ) interviewed banking staff, but not consumers themselves. Mielitz et al ( 2019 ) interviewed individuals who had been recently released from incarceration and found that they encountered barriers to using traditional banking products.…”