Treasury implements financial inclusion strategy

Treasury Secretary Janet Yellen on Tuesday unveiled a new financial inclusion strategy designed to improve access to transactional accounts and increase consumers’ financial resilience and well-being.

speaking at the meeting Annual meeting of the American Bankers Association In New York City, Yellen launched the National Financial Inclusion Strategy, a roadmap for public, private and nonprofit organizations to help communities participate in the U.S. financial system with the tools needed to build wealth.

“Access to financial products and services is critical to creating opportunity for all Americans,” Yellen said in a press release. “For the first time, the Treasury’s strategy provides a national roadmap for expanding access to key financial tools such as credit and investments that are key to creating wealth. “Implementing these recommendations will help more families build financial security and get ahead.”

strategyThis report, requested by Congress in 2023, is the culmination of a year of research and input from experts, community leaders, industry representatives, the public, and other federal agencies.

The strategy, which aims to promote financial inclusion and reduce wealth inequality, focuses on five key recommendations:

• providing access to transaction accounts that meet consumer needs;
• facilitating access to safe and affordable credit;
• increasing the inclusiveness of government-backed financial products and services;
• expanding fair access to savings and investments; And
• Strengthening confidence in the U.S. economic system by protecting consumers from fraud.

Yellen emphasized the need to increase retirement and emergency savings opportunities and unbiased financial education to help Americans achieve economic stability. He called on banks to help facilitate payments and offer loans, adding that the Treasury Department will continue to seek partnerships with banks to advance the strategy.

“It is clear that banks of all sizes are important partners in advancing many of our most important economic priorities,” he said. “This strong and important collaboration… must continue.”

A. questionnaire The report published by the Federal Deposit Insurance Corporation in 2022 found roughly the following: 4.5% of Americans — or 5.9 million households — did not have a bank or credit union account. This represented the lowest national non-bank interest rate since 2009. The agency argued that government relief payments in response to the COVID-19 pandemic led to a decline in unbanked households. But unbanked and unbanked rates remained higher among communities of color, according to the survey.

The FDIC report also emphasized the following: prevalence of online payment services Like PayPal and Venmo. The FDIC noted that households with bank accounts use these services in conjunction with their bank accounts, while households without bank accounts often use them in place of a traditional bank account.

Yellen noted the evolving role of nonbanks in the financial sphere and the challenges they pose for traditional banks.

“We will continue to monitor and address risks posed by the nonbank sector, including private credit and fintech, and their connections to banks,” Yellen said.

Discount window, liquidity stress

The treasury secretary noted vulnerabilities exposed during the 2023 banking turmoil and assured that the department will continue to work with financial institutions to address these problems, including increases in uninsured and concentrated deposits and unrealized losses on loan and securities portfolios.

“This means ensuring banks are prepared for liquidity stress, including having a variety of emergency funding sources, borrowing capacity within the discount window, and periodically testing that capacity,” Yellen said.

Fraud, Artificial Intelligence

Yellen emphasized the Treasury Department’s crackdown on cyber-related crimes through Project Fortress and said: department uses artificial intelligence to combat financial fraud.

Pointing out that fraud in government checks is increasing, Yellen said, “Fraud is becoming a big problem.” Bloomberg reported.

Yellen said AI is “really making a dramatic difference in our ability to detect and deal with fraud.”

The Treasury is also working to stop illegal financing in the residential real estate and investment advisory sectors. He applauded banks for reporting suspicious activity that led U.S. authorities to seize billions of dollars in illicit financing.