A top Federal Reserve official said Wednesday there is a need to examine barriers consumers face when trying to access affordable financial services.
Fed Governor Sarah Raskin said a large number of unemployed and underemployed Americans are at "great risk" of being unable to access fair, sustainable and affordable financial services.
Some 13.9 million Americans are out of work and an additional 8.5 million workers are "underemployed" because their hours have been reduced or they have not been unable to find a full-time job.
A government report this month showed job growth had all but stalled in May with U.S. employers adding only 54,000 workers to payrolls and the jobless rate rising to 9.1 percent.
Raskin called the report "bleak" and said the unemployment rate did not "fully capture the true scope of the unemployment problem."
Thousands have not looked for a job in weeks even though they want to work and many workers have given up looking for a job altogether.
"Most of these people searching for a way back into the employed economy are doubly challenged by their ability to access reasonably priced financial products with safe features that encourage savings," Raskin told an economic conference in Washington.
It has also been difficult for those with jobs to access credit as U.S. authorities are tightening up lending standards in response to the 2007-09 financial crisis.
About a third of would-be home buyers have not been able to get a mortgage, for example, and small businesses have been complaining for months that the stricter credit rules are hurting their operations.
The former bank regulator for the state of Maryland said the unemployed and underemployed may want access to the most basic of financial services such as a checking account, a debit card or credit card.
"Products and services that serve these core financial needs are not consistently available at affordable rates to all Americans," Raskin said. "Those with low and moderate incomes may have insufficient income or assets to meet the relatively high requirements of banks," she said.
Partially blamed for fueling the crisis by not clamping down on lax lending standards, the Fed has been forced to transfer the bulk of its consumer protection duties to a new bureau being established as part of the Dodd-Frank financial regulation bill.
When asked if the mountain of reforms was shutting people out, Raskin said she did not think there was something "inherently contradictory" with regulation and innovation.
"Regulation done correctly is pro innovation," she said.
Raskin did not comment on the outlook for U.S. monetary policy. The Fed's $600 billion bond buying program ends on Wednesday and policymakers have suggested the bar to further easing is high.
© 2017 Thomson/Reuters. All rights reserved.