FDIC: Minorities, Poor Have Less Access to Banking Services
Washington Afro , News Report, Staff Posted: Dec 09, 2009
(December 6, 2009) - More than one-quarter of Americans have little to no access to banking services, with the Black and impoverished community facing particular challenges, according to a report released Dec. 2 by the Federal Deposit Insurance Corporation.
According to the FDIC’s National Survey of Unbanked and Underbanked Households, 9 million households, a total of 17 million adults, were unbanked, meaning they did not have a savings or checking account.
Another 21 million households nationally were underbanked: while they had bank accounts, they depended on other financial services such as payday loans, pawn shops, non-bank cash checking and rent-to-own loans.
The disparities grew across racial and ethnic categories. Minorities were more likely to be unbanked and underbanked, with 22 percent of Blacks surveyed saying they were unbanked and 32 percent underbanked. The survey found that 19.3 of Hispanics were unbanked and 24.0 percent underbanked.
In comparison, Asians and Whites were only 3.5 percent and 3.3 percent unbanked, respectively, and 7.2 percent 14.9 percent underbanked.
Income also affected the use of banking services, according to the report, with households having incomes under $30,000 comprising 71 percent of all unbanked households.
The report was based on a survey conducted by the Census Bureau, and FDIC officials said it offers clues into the factors driving the use—or non-use—of banking services.
“Access to an account at a federally insured institution provides households with an important first step toward achieving financial security – the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, and access credit on affordable terms,” FDIC Chairwoman Sheila Bair said in a statement. “By better understanding the households that make up this group – who they are and their reasons for being unbanked or underbanked, we will be better positioned to help them take that first step.”
For more information, go to www.economicinclusion.gov.
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