The AARP is spearheading an effort to get older adults without bank accounts to enter the financial mainstream. Its new programs are based on a study it commissioned two years ago.
The nonprofit’s financial innovations director Vivan Vasallo says its focus is low-income, “unbanked” adults.
“‘Unbanked’ are people that have no bank account, or relationship to a bank,” she explained. “‘Underbanked’ are those people who might have an account, but don’t utilize it to the best of their ability and also use alternative financial services.”
Vasallo was one of several bank executives and policy makers who spoke at a meeting on Monday at the California Endowment in downtown Los Angeles. She says the study shows that many unbanked adults are black or Hispanic. LA City Councilman Richard Alarcon was also on the panel. He says these seniors have little confidence in the formal economy and use informal means to get quick cash.
“For every bank in Pacoima, there’s probably 30 check-cashing institutions in Pacoima,” said Alarcon.
That’s why one of the panel’s goals is to encourage older adults and seniors to better manage their money and to move away from reliance on predatory lenders.