E8-19478. Agency Information Collection Activities: Submission for OMB Review; Comment Request

AGENCY:

Federal Deposit Insurance Corporation (FDIC).

ACTION:

Notice of information collection to be submitted to OMB for review and approval under the Paperwork Reduction Act of 1995.

SUMMARY:

In accordance with requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the FDIC hereby gives notice that it is submitting to the Office of Management and Budget (OMB) a request for OMB review and approval of the new information collection described below. The collection is related to a mandate under section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 (“Reform Act”) (Pub. L. 109-173), which calls for the FDIC to conduct ongoing surveys “on efforts by insured depository institutions to bring those individuals and families who have rarely, if ever, held a checking account, a savings account or other type of transaction or check cashing account at an insured depository institution (hereafter in this section referred to as the ‘unbanked’) into the conventional finance system.” Section 7 further instructs the FDIC to consider several factors in its conduct of the surveys, including: (1) “What cultural, language and identification issues as well as transaction costs appear to most prevent ‘unbanked' individuals from establishing conventional accounts”; and (2) “What is a fair estimate of the size and worth of the ‘unbanked’ market in the United States.”

To satisfy the Congressional mandate, the FDIC intends to conduct two complementary surveys. One is a survey of FDIC-insured depository institutions on their efforts to serve underbanked, as well as unbanked, populations (underbanked populations include individuals who have an account with an insured depository but also rely on non-bank alternative financial service providers for transaction services or high-cost credit products). The FDIC has already obtained OMB approval for this survey and the survey effort is currently in process. The other is a survey of U.S. households to estimate the size and worth of the unbanked and underbanked markets and to identify the factors that inhibit their participation in the mainstream banking system. The household survey would be conducted for the FDIC by the U.S. Bureau of the Census, as a supplement to its monthly Current Population Survey (CPS) in January 2009. This notice addresses the household survey.

DATES:

Comments must be submitted on or before September 22, 2008.

ADDRESSES:

Interested parties are invited to submit written comments on the collection of information entitled: National Unbanked and Underbanked Household Survey. Comments should refer to the name of the collection and may be submitted by any of the following methods:

• http://www.FDIC.gov/​regulations/​laws/​federalnotices.html.
• E-mail: [e-mail]. Include the name and number of the collection in the subject line of the message.
• Mail: Leneta G. Gregorie (202.898.3719), Counsel, Federal Deposit Insurance Corporation, Room F-1064, 550 17th Street, NW., Washington, DC 20429.
• Hand Delivery: Comments may be hand-delivered to the guard station at the rear of the 550 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m.

A copy of the comments should also be submitted to the OMB Desk Officer for the FDIC, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Interested members of the public may obtain a copy of the survey and related instructions by clicking on the link for the National Unbanked and Underbanked Household Survey on the following Web page: http://www.fdic.gov/​regulations/​laws/​federal/​index.html. Interested members of the public may also obtain additional information about the collection, including a paper copy of the proposed collection and related instructions, without charge, by contacting Leneta Gregorie at the address identified above, or by calling [phone].

SUPPLEMENTARY INFORMATION:

Proposal to seek OMB approval for the following new collection of information:

Title: National Unbanked and Underbanked Household Survey.

OMB Number: New collection.

Frequency of Response: Once.

Affected Public: U.S. Households.

Estimated Number of Respondents: 54,000.

Average time per response: 10 minutes (0.166 hours) per respondent.

Estimated Total Annual Burden: 0.166 hours × 54,000 respondents = 8,964 hours.

General Description of Collection: This collection is related to a mandate under section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 (“Reform Act”) (Pub. L. 109-173), which calls for the FDIC to conduct ongoing surveys “on efforts by insured depository institutions to bring those individuals and families who have rarely, if ever, held a checking account, a savings account or other type of transaction or check cashing account at an insured depository institution (hereafter in this section referred to as the ‘unbanked’) into the conventional finance system.” The Congressional mandate further requires the FDIC to conduct ongoing surveys to, among other things, estimate the size and worth of the unbanked market in the United States and to identify the cultural, language and identification issues as well as transaction costs that appear to most prevent unbanked individuals from establishing accounts with insured depository institutions.

To satisfy the Congressional mandate, the FDIC has proposed conducting two complementary surveys related to unbanked and underbanked consumers (underbanked consumers include individuals who have an account with an insured depository institution, but also rely on non-bank alternative financial service providers for transaction services or high-cost credit products).

The first survey effort, which has already obtained OMB approval and is currently underway, is a survey of FDIC-insured depository institutions on their efforts to serve unbanked and underbanked consumers. The second survey effort, which is the subject of this notice, would be a national survey of U.S. households to estimate the size and worth of the unbanked and underbanked markets and to identify the barriers households perceive when deciding how and where to conduct financial transactions.

To obtain the information required by the Reform Act related to unbanked and underbanked households, for this survey effort the FDIC proposes to partner with the U.S. Census Bureau to conduct a survey of U.S. households as a supplement to Census' CPS in January 2009. The supplement would be administered to households that participate in the CPS and would be 10 minutes in length, on average. Based on their responses to the survey questions, respondents will be classified as unbanked or underbanked, allowing estimation of the size of those populations, and information on their demographic characteristics will be derived from their responses to demographic questions in the CPS.

The FDIC supplement to the Census survey is designed to yield significant new data on the numbers and demographic characteristics of unbanked and underbanked households, as well as the barriers they perceive when deciding how and where to conduct financial transactions. Currently, there is a lack of basic data on the number of unbanked and underbanked households in the U.S. and on the factors that may promote or hinder access to the mainstream financial system. This will be the first survey of its kind on this topic to be conducted at the national level and results will also be reportable at the state level. The results will help policymakers and the industry better understand the extent to which U.S. households are financially underserved, the reasons why U.S. households may be financially underserved, and the opportunities that exist to better serve them.

Comment Discussion: On May 19, 2008 (73 FR 28824), the FDIC issued a request for comment on the proposed National Survey of Unbanked and Underbanked Households. One comment was received from a banking trade organization. The commenter expressed general support for the survey, noting that the banking industry is actively searching for ways to expand the universe of bank customers by identifying ways to transition unbanked consumers into users of mainstream products and services. The commenter indicated that the survey data would enhance these private initiatives to develop financial services for unbanked and underbanked consumers. The commenter did, however, express concern that certain questions may be phrased in such a way as to unintentionally steer respondents to certain answers which are critical of banks and that several questions offer the failure of banks to provide check cashing services, a service banks usually provide to their account holders, as a possible reason for not having or closing a bank account. To mitigate the possibility of unintentional steering, the commenter suggested that the FDIC consult with experts in the field of polling to determine whether there are more neutral and reliable ways to elicit the information sought. The commenter further suggested that the FDIC eliminate failure to provide check cashing services as a possible answer to questions probing the reasons a respondent does not have or has closed an account.

The commenter also suggested that the FDIC expand the survey, to elicit more detailed information in a number of areas, including the attitudes of the unbanked toward financial education opportunities; the reasons some consumers prefer to operate on a cash basis; what consumers like and dislike about payroll cards and other pre-paid products and the extent to which users of such products tend to be interested in opening checking or savings accounts; and the extent to which price and other factors affect the choices made by unbanked consumers when shopping for financial products and services. Finally, the commenter noted that the survey does not include questions of a demographic nature such as the respondent's age, education, income, line of work, ethnicity, or how long he or she has resided in the country. The commenter, therefore, requested that the FDIC incorporate demographic questions into the survey or clarify that such questions will be included as part of the regularly scheduled questions asked by census takers.

In its development of the survey questions for the National Survey of Unbanked and Underbanked Households, the FDIC attempted to balance its statutory mandate to identify the factors that appear to prevent unbanked individuals from establishing accounts with insured depository institutions and the demographic characteristics of the unbanked population against the need to minimize burden on respondents. To achieve this balance and to ensure that the questions were structured in a way to minimize bias, the FDIC consulted with a nationally recognized polling firm with expert credentials in qualitative and quantitative research and analysis. The FDIC also worked closely with a cognitive testing expert on the faculty of the University of Connecticut and with staff of the Census Bureau's Demographic Surveys Division and the Labor Department's Bureau of Labor Statistics. After two rounds of cognitive testing with corresponding adjustments to survey questions, the FDIC is confident that the survey questions are structured in a way that minimizes possible skewing of survey results.

With respect to suggested deletion of failure to provide check cashing services as a potential response to questions seeking information on the reasons for not having or closing an account, the FDIC is aware that such services are usually extended to bank customers. However, provision of such services to account holders is not always the case and, in many instances, may be restricted by several factors such as account standing and the institution on which the check is drawn. Therefore, the FDIC believes that failure to provide check cashing services is a valid response option for questions seeking to determine the reasons for not having or closing an account.

Regarding the suggestion that the FDIC expand the survey to elicit more detailed information in a variety of areas, the FDIC agrees that the utility of the survey would be enhanced by the addition of questions that would provide more depth on factors underlying consumer choices and preferences with respect to financial products and services. However, the FDIC is constrained by Census Bureau limits on the length of the survey. Perhaps these issues can be explored in future survey efforts.

On the demographic issues raised by the commenter, the FDIC has clarified that demographic information about respondents is collected by the Current Population Survey, eliminating the need for such questions to be included in the supplemental survey.

Request for Comment

Comments are invited on: (a) Whether these collections of information are necessary for the proper performance of the FDIC's functions, including whether the information has practical utility; (b) the accuracy of the estimate of the burden of the information collections, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology. All comments will become a matter of public record.

Dated at Washington, DC, this 19th day of August, 2008.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.