Written by Alice Geglio
on Tuesday, 29 December 2009
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Over a quarter of the US population is un- or underbanked, according to a study by the FDIC. 60 million adults do not have adequate access to simple banking tools such a checking account or a fair loan.
During the past year, the FDIC teamed up with the US Census Bureau to conduct the most comprehensive study of the unbanked and underbanked populations in America. This is the first time that such data has been available on state and national levels. The study, released this month, provides insight into the number of underserved residents, who they are, and where they live.
An estimated 7.7% of US households, which includes 17 million adults, are unbanked. In this study, “unbanked” means that no one in the household has even a basic checking or savings account. These families will find it much harder to save, to protect their money, and to take out loans. They also end up paying much more for basic financial services. The vast majority of these unbanked households are low-income families, and have less than a college education.
In addition to the unbanked, 17.9% of US households are underbanked, relying on less-than-ideal financial recourses such as pawn shops, payday loans, and check-cashers on a regular basis. This includes 43 million adults. These “emergency” services are more expensive and less efficient than their standard bank equivalents.
Minorities are especially likely to be underserved: overall, 54% of black households do not have full access to financial services, as well as 43.3% of Hispanic households.
This data is unprecedented in terms of the wealth of information about America’s financially excluded households. Hopefully this data will be of use to policy-makers, members of the financial industry, and others who are active in extending banking services to all.
The results of the survey and additional information may be found at www.economicinclusion.gov, hosted by the FDIC.
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