Treasury Launches National Strategy for Financial Inclusion

The US Treasury promoted a National Strategy for Financial Inclusion; the inaugural report outlines "actionable recommendations" to make "meaningful progress" toward an "inclusive financial system that works to reduce rather than compound disparities." 

In the report, Treasury explained that "financial inclusion represents a continuum that includes financial access, which leads to financial resilience and ultimately financial well-being, including opportunities to build wealth." The strategy focuses on five core objectives along this continuum:

• Expanding Access to "Transaction Accounts" to Unbanked Households. Treasury said that greater access to checking accounts at a bank or share accounts at a credit union will enable consumers to (i) better manage their daily finances and (ii) "facilitate ... access to other financial products and services that individuals can use to improve their financial resilience and well-being." Treasury said that agencies leverage government-to-consumer payments to encourage transaction account openings among unbanked households, and that financial institutions evaluate their internal policies to identify opportunities and increase affordable account options to improve access for underserved communities. 

• Expanding Access to Safe, Affordable Credit. Treasury said that financial institutions, consumer reporting agencies and government agencies should incorporate alternative data in credit scoring to broaden access to credit. Treasury recommended that financial institutions and agencies expand Special Purpose Credit Programs and restructuring products "to promote fair distribution of credit." Treasury recommended that lenders improve financial products’ structures, such as through forbearance, to support consumer financial resilience, particularly for those who experience financial shocks.

• Expanding Access to Savings and Investments. Treasury said the government should "improve consumers' ability to save for retirement by providing incentives for saving and expanding access to retirement saving accounts." Treasury said that employers should (i) "offer tools that facilitate emergency savings," and (ii) "design retirement and savings benefits to equitably support employee financial health." 

• Increasing the Inclusivity of Government-Backed Financial Products and Services. Treasury said that the government should research, design and deliver public financial products and services in ways that enhance inclusion and equity. Treasury said that the government should also "ensure that financial products and services are delivered in an
  inclusive, accessible manner with minimal fees and easy opportunities for application and use of benefits." 

• Increasing Protections against Illegal and Predatory Practices. Treasury said that regulators must enforce consumer protection and fair lending laws to promote "trust in the financial system."