Speaking at the American Bankers Association Annual Convention in New York, Yellen unveiled the Treasury's National Strategy for Financial Inclusion. The plan — which was shaped by a yearlong collaborative process involving ABA staff, government agencies and consumer advocates — aims to expand access to the financial system for low-income households, people of color and rural populations as well as improve consumer outcomes.

"Access to financial products and services is essential to creating opportunity for all Americans," she noted in an accompanying release. "For the first time, Treasury's strategy provides a national roadmap to expand access to foundational financial tools like credit and investments that are key to building wealth. Implementing these recommendations will help more families build financial security and get ahead."

Yellen said the agency would seek the industry's "active partnership in moving this strategy forward." 

The national strategy focuses on five core objectives aimed at providing access to products that foster well-being and financial security. The objectives are:

• Promote access to transaction accounts that meet consumer needs.
• Increase access to safe and affordable credit.
• Expand equitable access to savings and investments.
• Improve the inclusivity of financial products and services provided or backed by the government.
• Foster trust in the financial system by protecting consumers from illegal and predatory practices.

Yellen said cooperation by financial institutions is needed to provide transaction accounts tailored to underserved communities, which would reduce the number of unbanked households in the United States. According to a 2021 survey conducted by the Federal Deposit Insurance Corp., nearly 5.9 million —  about 4.5% — of U.S. households didn't have checking or savings accounts.  While this represents the lowest rate recorded since 2009, the study found unbanked rates were disproportionately higher among lower-income, less-educated, Black, Hispanic, disabled, and single-mother households."It's clear that banks of all sizes have been crucial partners in moving forward many of our top economic priorities," she said. "So let me thank all of you for this strong and important collaboration and emphasize that it must continue."

Regulatory lessons

Reflecting on what regulators learned in 2023, Yellen said Treasury and federal officials would work closely with banks to address lingering vulnerabilities in the system. She underscored Treasury's ongoing focus on issues that played into the banking crisis — including some firms' reliance uninsured deposits and the effects of interest rate risk on banks' securities portfolios.

"This means ensuring that banks are prepared for liquidity stress," she said. "Including making sure banks have diverse sources of contingency funding and the capacity to borrow at the discount window and periodically test this capacity."

Yellen also acknowledged the expanding role of nonbanks in finance and the unique challenges they pose to traditional banks. She said the agency will continue to monitor and address risks posed by the nonbank sector, including private credit and fintech, and its interconnections with the banking sector.