Demographics

Aja Brown, the mayor of Compton, Calif., says introducing young people to what's possible, so that they don't feel limited by their current circumstances, is a way of continuing the mission that Martin Luther King Jr. started. Brown was a featured speaker at the recent Hope Global Forum, which focused on the theme of financial inclusion. She was there to discuss several initiatives underway in Compton, including one with the University of Southern California to offer industry-specific employment training.

Banks need outside help to deliver credit to the underserved, says Tim Wennes, the West Coast president of MUFG Union Bank, who shares advice on what kind of partners to seek and how to vet them.

Rallying bank employees to participate in outreach projects takes hard work in the beginning, but their involvement is essential to building a rapport with the community, OneWest Bank CEO Joseph Otting says.

There are some fairly basic, decisive steps banks could take to educate people outside the financial mainstream, and it would make banking more profitable, says John Bryant, the chairman and CEO of the nonprofit Operation Hope.

Racial disparity in small-business loans remains glaring, despite some improvement. Lenders' unfamiliarity with African-American communities is part of the problem, but so is the need for financial education among prospective borrowers.

Elected officials in Santa Fe and Seattle are considering plans to form municipal banks to promote affordable housing and reach out to the underbanked. Bankers are wary since such institutions could present competition.

Affordable pre-paid cards and checking accounts targeted at low-income customers are among the positive trends likely to gain steam in the months ahead.

Opus Bank in Irvine, Calif., has received regulatory approval to form a broker-dealer subsidiary that will expand its merchant banking capabilities.

By linking mobile payments with money transfers, Western Union created a new use for Apple's mobile wallet. But it must still rigidly conform to the basic requirements of an Apple Pay transaction — without a bank account, there is no payment.

Banks partnering with prepaid card providers face the potential of higher deposit insurance fees and other ramifications from the Federal Deposit Insurance Corp. classifying accounts as "brokered."

Citigroup has agreed to change its policies that prevented low-income consumers from opening checking and savings accounts.

Ten financial institutions, including four banks, will accept the new IDNYC card as a primary form of identification for new accounts. Community advocates hope the move will help more immigrants and unbanked individuals use banking products.

FS Card announced Thursday that Republic Bank & Trust in Louisville, Ky., will issue its new subprime credit card, which is scheduled to be launched this spring.

The market for the serving underbanked customers expanded last year, mostly due to a rising demand for subprime auto loans, the Center for Financial Services Innovation said Thursday.

Banco del Pacifico has announced plans to deploy two types of automated teller machines to help serve the underbanked in Ecuador.

The CFPB's proposed requirements threaten to trap next-generation digital wallets and cryptocurrency innovations in a consumer protection regime narrowly tailored to the unique characteristics of reloadable prepaid cards.

Growing income inequality is said to be a major reason most consumers plan to spend the same or less than last year on holiday shopping, and it could hurt bank and credit union revenues in the fourth quarter and present them other long-term challenges.

WASHINGTON — Promontory Financial Group announced Friday that it had given financial awards to two small institutions that are expanding banking access to the underbanked.

Eugene Danilkis, CEO of fintech startup Mambu, discusses banks' efforts to finance small and medium-size enterprises in developing countries, either indirectly (by funding microfinance organizations) or directly (by creating special lending subsidiaries unencumbered by legacy processes). He also explains how microfinance has moved beyond old stereotypes of lending to "basket weavers and fruit sellers"; why banks should heed Bill Gates' financial-inclusion message; and what the U.S. can learn from London about financial innovation.

The goal is to meet the financial education needs of everyone in the community — whether it’s the tech-savvy second-grader, the recent high school graduate getting her first checking account or a retiree learning how to stick to a fixed income.