A recent FDIC study has revealed that over 5.9 million U.S. households do not have a bank account, with a disproportionate amount of these individuals being Black and African American, Hispanic, and Native American/Alaska Native. The most common reason cited for not having a bank account is not having enough money to meet minimum balance requirements. Additionally, there is a deep-rooted distrust of banks among Native Indigenous and Black & African American unbanked consumers, stemming from systemic and cultural factors, as well as negative experiences with financial institutions. Many choose to remain unbanked as they believe it is the best option to achieve their financial goals, as they can control their spending and avoid overspending.
Despite the perceived benefits of being unbanked, many of these individuals/families are spending more than $40,000 in lifetime fees by relying on more expensive banking alternatives such as check cashing services, payday loans, or paycheck advances. This has led to the creation of Wells Fargo’s Banking Inclusion Initiative (BII) in 2021, which aims to increase access to affordable mainstream bank accounts and provide easier access to low-cost banking and financial education for underserved communities. The initiative seeks to empower unbanked and underbanked individuals to make more informed financial decisions and build generational wealth.
Wells Fargo’s Head of Diverse Customer Segments for Consumer, Small and Business Banking, Michael Martino, advises that even if individuals are not customers of Wells Fargo, they can still take advantage of free financial education and resources. Wells Fargo has partnered with Operation HOPE to establish HOPE Inside centers within selected branches across the U.S., offering free financial education and one-on-one coaching sessions with bilingual financial coaches. Through these sessions, individuals can learn how to manage money, improve credit, create budgets, and set financial goals tailored to their needs. Wells Fargo plans to launch a total of 50 HOPE Inside centers in low- to moderate-income communities by the end of 2026.
Martino emphasizes the importance of opening a bank account as the first step in building generational wealth, suggesting looking for banking accounts with low fees and no overdraft fees like Wells Fargo’s Clear Access Banking. He believes that expanding access to financial education, supporting initiatives targeting underserved populations, and enhancing community engagement all contribute to building a more inclusive and equitable financial landscape. By fostering collaborations and a shared dedication to addressing financial disparities, Martino believes communities can work together to make a meaningful difference in supporting financial inclusion for all. The goal is to empower individuals to make informed financial decisions and improve their overall financial well-being.
