WASHINGTON—There is a “long and winding road” ahead when it comes to financial inclusion, but the Fed is making progress, according to one Fed governor.
Speaking to the Aspen Institute on the issue of financial inclusion, Federal Reserve Governor Michelle Bowman said, “Small banks, especially community banks, have a deep understanding of the local economies they serve, and can respond quickly and effectively to local needs … but no entity or group of financial institutions alone can solve the challenge of creating a more inclusive financial system.”
According to the ABA Banking Journal, Bowman said the “varied experiences” of consumers must be taken into consideration.
“Despite the general availability of online financial services, geography, location and accessibility matter,” Bowman was quoted as saying by the Banking Journal. “Financial inclusion may look very different, for instance, in rural communities, compared to the suburbs of Washington, D.C., or the islands of Hawaii. The entire economy gains when more households achieve financial stability. That said, the benefits of financial inclusion do not necessarily result in the same outcomes for everyone.”
What’s Needed
The road to a more inclusive financial system is “long and winding,” Bowman said, but the Fed has made “promising” steps forward, including supporting responsible small-dollar lending products that lead to successful repayment outcomes and that avoid continuous cycles of debt, the ABA Banking Journal reported.
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