The Federal Deposit Insurance Corporation (FDIC) issued a report on a program offered by the Internal Revenue Service (IRS) to help unbanked Americans.
Specifically, the report examines the role the IRS’s Volunteer Income Tax Assistance (VITA) providers have in helping unbanked Americans access banking products and services. The purpose of the survey is to better understand potential opportunities to help unbanked clients of VITA sites open bank or credit union accounts to direct deposit their tax refunds and credits.
The report suggests that VITA providers are well-positioned to expand economic inclusion during bankable moments, such as when a client opens a bank or credit union account in order to direct deposit their tax refund. However, three-quarters of respondent sites that were not already partnered with a bank or credit union cited at least one barrier as a reason for not partnering.
In addition, the report revealed:
• There is demand for banking services at VITA sites, and many sites already offer financial well-being services.
• Many respondent VITA sites are open to partnerships that would provide safe and affordable banking products for their clients.
• VITA sites that are in partnerships with banks or credit unions met their partners through networking events, the initiative of banks, and through other networking opportunities aimed at increasing economic inclusion.
“This survey highlights a promising opportunity to help more low- and moderate-income households get banked during tax time. Our Community Affairs team looks forward to facilitating more partnerships between financial institutions and VITA sites to connect consumers to safe and affordable accounts. We thank the IRS for their continued collaboration,” FDIC Chairman Martin Gruenberg said.
The survey was conducted from May 15 to June 30, 2023. Of the 486 VITA sites that were invited to participate, 351 responded for a 72 percent response rate. Of that amount, 99 sites had a partnership with a bank or credit union in the 2023 tax-filing season.
The FDIC collaborated with the Stakeholder Partnerships, Education and Communication Office of the Internal Revenue Service to conduct survey outreach.