PNC Certified for New Account Aimed at Underbanked
Last month, PNC Financial Services Group became certified from the Cities for Financial Empowerment (CFE) Fund for a second bank account that limits fees, allowing underbanked consumers to maintain access to banking services. The account has no overdraft or insufficient fund charges, costs $5 a month, and aims to ensure everyone has affordable banking access.
“We can help people own a home, we can help people manage credit, we can bring people into the financial system,” said Bill Demchak, PNC Chief Executive. “There’s actually a lot of things we can do that can impact lives.
With the certification, PNC is the only lender with two accounts certified by the CFE’s Bank On initiative. The bank has worked to help consumers stay in the banking system throughout the coronavirus pandemic.
The nonprofit Financial Health Network found that one in four U.S. adults is considered unbanked or underbanked, and typically do not have enough cash to open an account or get a loan from a bank. Their dependence on cash in an increasingly digital financial environment also intensifies the nation’s wealth gap, which disproportionately affects minority groups, according to American Banker.
Regulatory filings show that PNC’s charges related to consumer overdrafts fell to $273 million in 2020, from $412 million in 2019. Alternatively, economic havoc from the pandemic still threatens to push lower-income families to the outskirts of the financial system, especially for those who exclusively rely on cash.
Demchak noted that banks have to “go old school and continually monitor” to avoid bias in using algorithms to make credit decisions. Though banks and other lenders increasingly use machines to boost volume and reduce costs, “through time, every day it changes, there’s the risk it leads to disparate impact.”