What's Happening?
Community banks and credit unions are playing a crucial role in helping individuals overcome financial hardships by providing access to basic banking services. According to a report, 4.8 million new Bank
On accounts were opened in 2024, marking a 27% increase from the previous year. The Bank On initiative, led by the Cities for Financial Empowerment Fund, aims to offer affordable and safe banking options to unbanked and underbanked individuals. Despite a record low of 4.2% unbanked households in 2023, many still rely on nonbank financial services due to high fees and mistrust of banks. Community banks and credit unions are working to change this perception by offering low- to no-fee accounts and flexible financial services.
Why It's Important?
Access to banking services is essential for economic stability and building generational wealth. Without a bank account, individuals struggle to save, manage financial transactions, and access affordable credit. Community banks and credit unions not only support individuals but also small businesses, driving local economic growth. They offer services like real-time payrolls and flexible loans, which are crucial for those living paycheck to paycheck. By integrating more people into the banking system, these institutions help reduce reliance on expensive financial services like payday loans, ultimately fostering financial inclusion and stability.
