Can you get by without a checking or savings account? Many Americans do…..

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Can you get by without a checking or savings account? Many Americans do…..

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You’d assume that nearly every adult American has some kind of foot in the banking industry, with an active checking or savings account at the least. A survey by the FDIC & the Census Bureau, however, paints a dramatically different picture: 25.6% of households—30 million in all—did not use basic banking services last y ear or relied on alternative services, such as high-interest payday loans, to get cash. Minority groups were less likely than the overall population to have standard banking relationships. What can banks and the government do to reach out to this underserved segment of the population?

Guest:

Erika Bell, vice president of strategy & services at the Latino Community Credit Union

Paul Leonard, director, California office Center for Responsible Lending


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Comments

Alex de Cordoba

9 months ago

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The problem with low bank use in low income areas is directly related to the lack of quality education. People who do not possess adequate language and math skills will continually run into problems due to their lack of understanding. There is never a reason for a person to be overdrafted on their bank account.

tm

9 months ago

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What about credit unions? Weren't credit unions originally setup for low income individuals and families to have banking services without dealing with a for-profit bank?

ben

9 months ago

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The government's already moving on overdraft fees, right?

http://www.nytimes.com/2009/11/13/business/13regulate.html?_r=1&scp=1&sq=overdraft%20fees&st=cse

Alex

9 months ago

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Pat, People are being victimized all the time due to their lack of understanding. It took me years to learn how to properly read a NO PARKING SIGN. Education is the key. People who lack education will continue to be taken advantage of by those with knowledge.

Alex

9 months ago

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NEVER use your Debit Card. Credit Cards, when used responsibly, offer far more consumer protections, and can ever PAY YOU MONEY if you pay off the balance in full each month. I've made thousands of dollars off my bank just by spending money with my credit card.

coco

9 months ago

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My hard-earned wisdom is the mistake of having trusted my former bank of 30 years (First Federal now owned by Prime Vest) their investment "advice" was incomplete and manipulative. And, of course, they have customers sign an arbitration agreement--my lesson cost me almost $2,000. Beware!!!

It_Sounded_Fishy

9 months ago

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Fact-checking.
I was listening while driving, and that 25% figure sounded alarmingly high. In fact it made me ask, "Really? 25% of households don't have a single bank account? Really? Really?" Wow.
Now I'm back online and checking it out. The FDIC site says things quite differently: 7.7% of households (9.9 million) have no bank accounts. OK that is bad, yes, it doesn't make me happy. But that means 1 in 14 households has no bank account. Not 1 in 4 households. Everybody can calm down, don't spazz out. Here is the link:
http://www.fdic.gov/householdsurvey/.
Turns out the rest of the 25% is people who are "underbanked," whatever that means. Hey, I don't want anybody to be under-anything, it would be better if they didn't have to go to alternative sources. But the intro above and listening to the show made it sound as if in 1 in 4 households, not a single person (mom, dad, kids, grandpa, nobody) had any kind of bank account. And that's not true.

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