FDIC Readies Model Accounts Pilot

November 24, 2010

The FDIC last week announced the selection of 9 banks to help it to demonstrate and fine-tune what it calls its Model Safe Accounts Template.

A Model Safe Accounts Pilot, scheduled to begin officially on January 1, 2011, is being described by the FDIC as a "case study" intended to evaluate the feasibility of banks offering safe, low-cost checking and savings accounts that can attract the unbanked and underserved.

The pilot banks will offer all-electronic accounts with core product features that target the unbanked and other moderate- to low-income consumers. Accountholders will not be able to write checks, but they will be able to access cash at ATMs and POS devices, and to set up automated payments that use the ACH network. No overdraft or NSF fees are permitted, however optional offerings can include small-dollar loans, along with services like financial education, money transfers and bill payments.

A detailed description of the Model Safe Accounts Template is available on the FDIC's Web site.

"Our goal is to highlight accounts that are not only safe and affordable for the over one-quarter of consumers who are not fully utilizing mainstream banks but also are feasible for banks' bottom lines," said FDIC Chairman Sheila C. Bair.

Here's a list of those financial institutions that have been selected by the FDIC, along with some of the products and services they plan pilot.

• Bath Savings Institution, Bath, ME is rolling out a new eSafe transactional account for the pilot.
• Citibank, New York, in partnership with Grameen America, will offer special savings accounts and micro-loans to New York City consumers.
• Cross County Federal Savings Bank, Middle Village, NY, will offer basic, low-cost accounts through its New York City branches.
• First State Bank, Union City, TN, has developed a new card-based Checking Plus Basic account at branches throughout Tennessee.
• ING Direct, Wilmington, DE, is testing the appeal of a modified version of its Orange Savings Accounts to low-income consumers in four Metropolitan Statistical Areas - three on the East Coast, one in the West.
• Liberty Bank and Trust Co., New Orleans, LA will offer a new "E-Cash" transactional and savings accounts throughout the Greater New Orleans area.
• Pinnacle Bank, Lincoln, NE is offering what it calls Pinnacle Safe Deposit Accounts through 55 offices in three Mid-western states.
• South Central Bank, Glasgow, KY has developed a new set of transactional and savings accounts and plans to work with local community groups to promote the accounts.
• Webster Five Cents Savings Bank, Webster, MA will continue to offer card-based accounts dubbed First Step Checking and Passbook Savings as part of the pilot.

There are 78 ATMs for every 100,000 adults in the developed world; in developing countries just 23 ATMs are deployed per 100,000 adults 

_{-Financial Access database}