Research shows that even though banks may be physically located in areas with high concentrations of unemployment and low FICO scores, the consumers in these impoverished areas still lack access to the banks’ services when compared to higher income and higher FICO score communities. This results in a lack of supply of mainstream financial services to underbanked and unbanked consumers. The study’s findings and recommendations include:

• The financial services industry must provide a mechanism to transition and graduate consumers from sub-prime to prime credit scores in order for them to be able to accumulate wealth.
• The industry and legislative bodies must work together to develop a new business model and a set of regulatory policies to provide access to mainstream products and require financial service organizations to report payment histories to the major credit bureaus.
• Organizations that offer credit products to credit-challenged consumers must be allowed to factor in appropriate risks when extending these services while fostering a competitive regulatory environment.