17 Million Americans Have NO Bank Account

Posted by Brittany Stepniak - Wednesday, September 12th, 2012

A recent survey conducted by a Federal Deposit Insurance Corp. revealed some startling statistics regarding American bank accounts; specifically the lack thereof.

The survey showed that one in five U.S. households are “underbanked.” That means that 24 million households with 51 million adults said they use alternative services like payday loans or overdraft programs as opposed to opening up a traditional bank account.

Not surprisingly, the number of adult Americans without bank accounts has surged 0.6% since the first survey was conducted in 2009 – 821,000 more homes reported that they did not have a bank account in Wednesday's survey.

While two out of three of the households surveyed listed that they had both checking and savings accounts, at least 29% indicated they did not have a savings account and a full 10% confirmed that they didn't even have a checking account with a nearby bank.

So 17 million adults currently live in homes with no bank accounts. This certainly provides a poor reflection of American banks. After the 2008 market crash and big bank bailouts following that crisis, Americans have lost faith in our unstable institution of banking.

Of those households, 17.5% mentioned that the used pawn shops because they assumed they would be ineligible to receive small loans from a bank.

Nearly one in ten households used multiple types of alternative products – a payday lender, for example – in the past year alone.

Hypothetically, this survey will motivate big banks to offer more short-term, small-dollar loans of under $2,500 to interested low-income Americans who may have very low credit scores or no credit at all.

These survey results could be advantageous to banks aiming to increase their customer base, so long as the banks are willing to take on a bit of risk by offering those small-dollar loans to those Americans that aren't utilizing banks at all right now.

From MarketWatch:

There are a number of publicly traded payday lenders, including DFC Global DLLR +0.75%  , Ezcorp EZPW -0.42% , First Cash Financial Services FCFS -0.33%  and QC Holdings QCCO +2.63%  .

American Express AXP +0.44% , J.P. Morgan Chase JPM +1.21%  and Western Union WU +0.55%  are among the firms that have launched prepaid cards targeted at the underbanked.

Perhaps people have been listening to those gurus pushing people to get their money out of the banks before the next major financial collapse ensues. Mac Slavo says, “If such a financial crisis comes to pass it is clear that the policies and procedures now in place will transfer the legally owned deposits and money market savings of individual Americans into the hands of the banks at which those funds are kept.”

That being said, the findings from Wednesday's survey at not all that surprising to those of us who have been paying attention to our failing financial system...

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