WASHINGTON (9/13/12)--More than one in four U.S. households--28.3%--are either unbanked or underbanked, a slight increase from 2009, according to 2011 statistics released Wednesday by the Federal Deposit Insurance Corp. (FDIC). In other words, credit unions' ongoing efforts on behalf of low-income members and their outreach efforts to largely unbanked or underbanked populations are needed now more than ever.
The announcement comes just as the National Credit Union Administration (NCUA) was announcing that hundreds of credit unions have accepted its low-income designation, meaning they can accept supplemental capital and use an exemption from the small business lending cap under certain circumstances to assist their members.
NCUA had notified 1,003 credit unions in August that they were eligible for the program. LICUs are also eligible for Community Development Revolving Loan grants and low-interest loans and may accept deposits from non-members, such as unbanked households relying on payday lenders for financial services.
The announcement also comes as more credit unions and leagues try creative ways to attract the unbanked and underbanked. These include prize-linked savings programs such as Michigan's Save to Win and the Filene Research Institute's SaveUp program, which is being piloted by 20 credit unions in 12 states to evaluate the emotional effects of rewards programs on influencing consumers to make positive financial decisions.
Other credit unions offer better rates on short-term loans to combat exorbitant fees charged by check cashers and payday lenders; have outreach efforts for Hispanic membership; and are active in financial literacy programs.
Servicemembers and their families, although not unbanked, often are underbanked and are prey to check cashers and payday lenders that are typically located near their bases, and credit unions that are members of the Defense Credit Union Council often provide special services to support the troops and their families. (News Now
will feature a separate story on the efforts of a number of defense-related credit unions Friday.)
More than 821,000 more U.S. households have become unbanked since the first survey in 2009--a 0.6 percentage point increase, according to the FDIC's 2011 National Survey of Unbanked and Underbanked Households. More than half of all unbanked households say they do not have an account because they believe they do not have enough money or that they do not need or want an account. Three in 10 households in the U.S. do not have a savings account.
Other key findings:
- One in 12 U.S. households--8.2%, or 10 million households--are unbanked. Roughly 17 million adults live in unbanked households.
- One in five households (20.1% or 24 million households with 51 million adults) are underbanked.
- Of the households, 29.3% do not have a savings account, while about 10% do not have a checking account. Nearly two-thirds have both savings and checking accounts.
- One-fourth of households say they have used at least one alternative financial service such as non-bank check cashing or payday loans in the past year. Nearly one in 10 used two or more types of these services. Also, 12% of households said they have used these services in the past 30 days, including four out of 10 unbanked and underbanked households.