Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

17 million Americans have no bank account

And another 18% that do still use non-traditional banking services like pawn shops and payday lenders, according to FDIC survey.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Ellis, CNNMoney.com staff writer

bank_sign.ju.03.jpg
Living without banks
A significant percentage of Americans still do without basic banking services. More

NEW YORK (CNNMoney.com) -- New York State is known as the nation's financial capital, yet nearly one in 10 of its residents do not have a checking or savings account.

And while Texas is densely populated with banks, nearly a quarter of households in the Dallas-Forth Worth area have gone to a pawn shop or check cashing company recently to carry out a simple financial transaction.

Those were just a few of the findings of a new government survey released Wednesday on Americans' access to basic banking services.

The survey, which tallied responses from roughly 54,000 U.S. households, marks the first time that the Federal Deposit Insurance Corp. has published such data.

Perhaps one of the biggest revelations of the study was that approximately 7.7% of all U.S. households, or 17 million Americans, were considered "unbanked," meaning they did not have any sort of a checking or savings account.

The most common reason cited, according to the study, was a lack of funds. More than a third of those considered "unbanked" said they did not have enough cash to warrant having a bank account.

In fact, nearly 20% of all U.S. households earning $30,000 or less per year did not have a bank account.

The study also found that almost a quarter of all households headed by someone who didn't finish high school were considered "unbanked." Meanwhile, nearly one of every five African-American or Hispanic households do not have a checking or savings account, according to FDIC data.

Another key finding of Wednesday's survey, was that many Americans that actually have bank accounts still look elsewhere to cash their checks or borrow money.

In fact, nearly 18% of all U.S. households have relied on payday lenders, pawn shops or check-cashing outlets at least once in the past five years.

Such businesses have often been criticized for charging consumers rates that would even make loan sharks blush. In some instances, borrowers pay the equivalent of an annualized interest rate as high as 500%.

People who were polled, however, said they continued to use these services simply because they were convenient or because it was easier to get a loan from them.

Hoping to migrate consumers away from such expensive options, the FDIC has enacted a number of initiatives including a short-term loan pilot program it launched in February 2008.

As part of the program, a select group of banks have agreed to offer short-term loans of up to $2,500 to low-income Americans.

Wednesday's survey report was yet another effort to expand consumers' access to basic financial services, agency officials said.

"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," FDIC Chairman Sheila Bair said in a statement. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
The best gadgets for your next business trip Hotels often lack the resources business travelers need to work efficiently. But fear not: These six gadgets will turn any hotel room into a temporary office. More
Must-have gadgets for business travelers For many business travelers, commuting through airports and enduring flights is the worst part of any trip. Thankfully, these seven gadgets help make life on the road -- and in the air -- much easier. More
Best cities for first-time homebuyers A recent Zillow analysis on the best markets for first-time homebuyers finds that the best deals are in the Southeast and the Midwest. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play