Are You Unbanked?
Are You Unbanked?
Have you ever heard of it? Almost 5% of households, or close to 6 million of us don’t have a checking or savings account with a bank or credit union. Somewhat surprisingly 5% is the lowest number of “unbanked” since 2009.
If no one in the home has an account with a bank or credit union, that household is considered “unbanked”. In 2011, 8% of households were unbanked, the highest since the start of the survey.
There’s also being “underbanked”. Those folks do have a checking or savings account, but also use check cashing services. 14% of households, or about 19 million people are “underbanked”.
Why are there people unbanked or underbanked…well, 29% said that fees or not having the required minimum balance were the main reasons they didn’t have a checking and or savings account.
Looking at the numbers, the unbanked numbers were greater amoung households that included those of working age and disabled, lower income, included a single mother, or were Black or Hispanic. Among white households, 2% didn’t have a bank account last year compared to 11% in the Black community and 9% in the Hispanic community.
15% of households with a working age member who had a disability were unbanked compared to almost 4% of other households. Nearly 16% of households with a single mother were unbanked compared to about2% of married couples who lacked an account.
A couple of other facts and figures. Homes where the head of the household was out of work were nearly five times more likely to not have a bank account as compared to those where the head of the household was employed.
Will the numbers go up if we fall into a recession? Experts say yes. According to the Chief of the Banking Research Section at the Center for Financial Research, Karyen Chu, “during the last recession unbanked rates did indeed go up”.
