Wells Fargo launches 10-year plan to boost banking inclusion for underserved communities

NEW YORK: Wells Fargo has launched a 10-year commitment to help unbanked individuals in the United States gain access to affordable, mainstream bank accounts, the company said on Monday.

The initiative aims to help Black and African Americans, Hispanics, and Native Americans, who account for more than half of the country's 7 million unbanked households, have easier access to low-cost banking, Wells Fargo said.

As part of the plan, the bank has committed to locating 100 branches in low-to-middle income neighborhoods.

Banks are under pressure from lawmakers and advocates to increase financial inclusion and access to banking services for underserved communities.

The need to address the issue had been heightened by the COVID-19 pandemic. The Federal Deposit Insurance Corporation has said the number of unbanked households will likely increase in the aftermath of the pandemic.

"We recognize the high number of unbanked households is a complex and long-standing issue that will require gathering the best minds, ideas, products and educational resources from across our communities to bring about change," Wells Fargo Chief Executive Charlie Scharf said in a statement.

Wells Fargo is focusing on three areas with the initiative - expanding access to financial education and advice, increasing access to affordable products and launching a National Unbanked Advisory Taskforce.

Through the initiative, the bank said it would deepen its existing relationships with Black-owned Minority Depository Institutions (MDIs), which are more likely to lend in underserved minority communities. It will also increase funding and support to expand the Credit Builders Alliance (CBA) low-cost, credit-building consumer loan program.

Wells Fargo declined to say how much it is investing in the initiative.