More than one quarter of American households are “unbanked” or “underbanked,” according to a new survey released today by the FDIC. In total, 25.6 percent of U.S. households either lack bank accounts or use other alternative services.
The survey also found that low-income and minority households are disproportionately represented. Households were considered “unbanked” if they reported no members with checking or savings account, while “underbanked” households had bank accounts but relied on services like payday loans or check-cashing services.
Key findings from the survey include:
• An estimated 7.7 percent of U.S. households, approximately 9 million, are unbanked.
• The proportion of U.S. households that are unbanked varies considerably among different racial and ethnic groups, with certain racial and ethnic minorities more likely to be unbanked than the population as a whole. Minorities more likely to be unbanked include blacks (an estimated 21.7 percent of black households are unbanked), Hispanics (19.3 percent), and American Indian/Alaskans (15.6 percent).
• In addition to the unbanked households, an estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked.
The survey was conducted in January 2009 by the U.S. Census Bureau (a client of ours) on behalf of the FDIC. More national statistics and results broken down by region, state and metropolitan statistical area can be found at www.economicinclusion.gov.
With more than 25 percent of American households unbanked or underbanked, now is the opportune time for greater financial education of consumers. Consumer education campaigns are shown to be effective, and financial services companies have the opportunity to emerge as trusted leaders, educating consumers about the financial mainstream and helping them to be more financially fit.