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VIEWPOINT: Communities benefit when access to financial health is inclusive

By Lori Tiefke

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For business leaders who have achieved success professionally and personally, the things that come easily to you may seem insurmountable for some of your employees. Whether it’s gaining experience or building credit, getting a first foot on the ladder of success can feel out of reach for many.

The Federal Reserve Bank (FRB) tracks household statistics that have an impact on the country’s overall economic health and activity, and its Economic Well-being of Households 2022 report, released in May 2023, showed that six percent of adults in the U.S. are “unbanked.” This term is used for individuals who do not have a checking or savings account, or access to financial services such as loans or credit cards. Young adults, those with low income, Black and Hispanic adults, and adults with a disability are disproportionally affected, with higher rates of unbanked adults than the general population.

An additional segment of adults described as “underbanked” are defined as those having some access to services like bank accounts, but with limits that drive them to use alternative products to address gaps in their financial needs. Underbanked adults with household incomes below $50,000 were more than twice as likely to have paid overdraft fees than households with annual incomes of $100,000.

Both underbanked and unbanked households rely on financing alternatives to traditional banks, which both fill a role and cause additional financial hardship. These options — such as payday loans, money orders, pawn shops, and check cashing services — come with high fees and interest rates that far exceed traditional banking products. If these services are someone’s only option when things get tight, it can feel impossible to ever get ahead, and lead to increased debt loads and the potential for collateral loss.

Many seek out and rely on these options, believing they are locked out of traditional banking products. 

This has ramifications for individuals, for their impact at work and for our communities as a whole. Think of the big-ticket items that are commonly financed — cars and homes. Reliable transportation is a must for many who work, but without access to credit it’s hard to find. Homes offer the chance to build equity and wealth over time, but without access to credit, owning a home is out of reach.

There are two important components to improving the financial resilience of people within our community. The first is developing products that meet their needs, designed to avoid common barriers. The second is an educational component — for bank branch staff, for those looking to build sound financial habits, and for the employers of these individuals.

To address the first aspect, NBT Bank has partnered with the Cities for Financial Empowerment Fund (CFE Fund), which works with local governments and organizations to improve the financial stability of low-income and moderate-income households. Working with the CFE Fund, NBT designed a no-fee account that meets the criteria of the CFE Fund’s “Bank On” initiative to ensure that everyone has access to a safe and affordable bank account. The new account offers those with no banking history access to traditional banking services, such as debit cards and digital access, while eliminating potential stumbling blocks such as minimum-balance requirements and overdraft fees. 

Organizations such as the CFE Fund and its Bank On initiative are having a real impact by establishing clear, uniform standards and enhancing economic inclusion.

On the second aspect, education and training are truly critical for everyone involved. Ensuring that bank branches have well-trained employees means they are recommending the right products, ensuring a higher chance of success. And for new account holders, developing the right financial habits is key to building a solid foundation.

When employers receive financial questions from employees, the employer needs to know how to recognize indicators of financial distress and know what local resources are available to their employees. As an employer, reach out to your banking partners to inquire about financial-literacy programs that they may be able to provide to your employees. 

Just as a journey of a thousand miles starts with one step, the road to financial health begins with a bank account. Expanding economic inclusion is about understanding our role in supporting both individuals and communities. The benefits are happier, less-financially stressed people and stronger, more vibrant businesses and communities.      


Lori Teifke is NBT Bank’s Central New York territory manager, leading the retail teams in Onondaga and Oswego counties. She joined NBT Bank in 2008 through the Alliance Bank merger and has more than 20 years of banking experience.