Persuading the regular banking sector to provide reasonably priced retail products is a challenge partly because of banks’ long-term and increasing reliance on fee income as income from interest rate spreads continue to decline. While many financial institutions advertise free checking, most retail accounts have elaborate fee structures that can make retail banking very expensive.

Since the advent of money market accounts, banks have not strongly marketed savings accounts and the era of low-interest rates reinforced this trend. However, there is evidence that when lower-income people are systematically offered savings vehicles that a significant percent will respond positively.

Woodstock’s strategies for expanding access to affordable and appropriate retail accounts include developing such products with individual banks; documenting and seeking regulatory and other action against excessively priced products; and opening up lower-income households’ access to credit union membership.