Complete Description:This article explains the obstacles that Low-to-Moderate Income (LMI) households face in asset building, examines the incentives banks have for encouraging these households to save, and describes some strategies banks have used to build profitable relationships that also benefit LMI consumers. Although LMI households earn less and hold fewer assets, these consumers conduct a significant volume of financial transactions each year. Moreover, many banks already have a relationship with LMI households and are well-positioned to expand these relationships through asset-building products and strategies. Some successful strategies include "doing no harm" by offering reasonably priced products and services to LMI consumers, expanding direct deposit options, partnering with outside organizations to obtain motivated customers, leveraging tax refunds into saving, and linking saving to credit and other bank products.
Date Published:Wednesday, April 2, 2008
Author:Rae-Ann Miller, Susan Burhouse, and Luke Reynolds
Funding Agency: Federal Deposit Insurance Corporation
Type: Article;
Source: Literature review;
Language: English
Audience: Individual, Researcher, Teacher, Youth