Black People : 25.6% of U.S. households use conventional banks little or not at all

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  1. OldSoul

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    25.6% of U.S. households use conventional banks little or not at all

    A disproportionate amount of those that are either 'underbanked' or 'unbanked' are low-income and minority families, including more than half of black households, according to an FDIC survey.

    More than a quarter of American households have limited or no interaction with conventional banks, making it more difficult for those families to establish credit, according to the first-ever federal survey of how consumers use financial services.
    The survey, released Wednesday, found that 25.6% of households -- 30 million in all -- did not use basic banking services last year or relied on alternative services, such as high- interest payday loans, to get needed cash.
    Those so-called unbanked and underbanked Americans are disproportionally low-income and minority families, including more than half of black households, according to the Federal Deposit Insurance Corp. survey.
    The greater Los Angeles-Orange County area had patterns that were similar to the national results. The Census Bureau, on behalf of the FDIC, conducted the survey in January to cover data at the national, regional, state and metropolitan levels.
    Many households seemed to have made a conscious choice to shun conventional financial services, FDIC Chairwoman Sheila C. Bair said.
    But households without bank accounts could be more vulnerable to loss or theft and less able to build a credit profile or reach financial security, the report said. Households that rely mainly on services such as payday loans or overdraft programs are often hit with enormous fees and interest rates.
    "Access to an account at a federally insured institution provides households with an important first step toward achieving financial security -- the opportunity to conduct basic financial transactions, save for emergency and long-term security needs and access credit on affordable terms," Bair said.
    Nationally, 7.7% of households, or 9 million, had no checking or savings accounts. More than 41% of those families said opening a future account was "not likely at all." Roughly half of unbanked households previously had accounts.
    Households considered underbanked -- about 17.9%, or 21 million -- relied on other nonbank services, such as money orders, check cashing or pawn shops, while also holding some combination of checking and savings accounts.
     
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