Breaking Down Barriers: The U.S. Treasury’s National Strategy for Financial Inclusion

The U.S. Treasury recently unveiled its National Strategy for Financial Inclusion.

It’s packed with practical ideas to remove barriers to financial health and wealth-building.

Here’s a snapshot of the key strategies Treasury proposes to improve financial inclusion:

1️⃣ Better Transaction Accounts and Payments:
▶️ Lower fees and reduced minimum balance requirements for checking and savings accounts.
▶️ Faster access to funds (real-time settlement and payments to avoid penalties and late fees).
▶️ Language accessibility for non-English speakers.
▶️ Read-only account access for those needing financial assistance.
▶️ Mobile banking branches for activities requiring in-person access (e.g., cash deposits).

2️⃣ Smarter Credit Underwriting:
▶️ Incorporating cash flow data, rental history, and utility/telecom payments to improve credit assessments.
▶️ Open banking rules to make switching banks easier and spur innovation in financial products.

3️⃣ Improved Restructuring and Forbearance Options:
▶️ Enhanced loan restructuring options to adjust payment terms, reduce interest rates, or extend repayment periods during financial hardships.
▶️ Short-term pauses on adverse credit reporting to credit bureaus during declared emergencies, such as natural disasters and pandemics.

4️⃣ Stronger Incentives for Savings:
▶️ Retirement accounts with features like automatic enrollment and limited penalty-free withdrawals for emergencies.
▶️ Rainy day funds designed to help individuals save specifically for emergencies, often linked to payroll deductions or account nudges to make saving easy and consistent.
▶️ Child savings accounts to build wealth from a young age.

5️⃣ Reduced Government Friction:
▶️ Simplified identity verification using municipal IDs, student IDs, and attestation letters to increase accessibility.
▶️ Streamlined processes for accessing tax credits and subsidies, like childcare and home energy assistance, by cutting red tape and reducing the burden of forms and documentation.
▶️ Free or low-cost tax filing options to make navigating tax season more affordable and straightforward.

These are common-sense strategies to remove barriers that keep millions of Americans from building wealth and achieving financial security.

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