Alternative Financial Services Aren’t Just for Low-income People
By Sean Luechtefeld on 06/12/2012 @ 02:30 PM
As the Bank On Site Administrator, one of my jobs is to keep up with news about Bank On and other financial access initiatives. Like everything else in my life, I do this with Google. Among my Alerts for ‘Bank On’ are notifications that “the bank on 14th Street was robbed” and “you can bank on the Celtics winning the Eastern Conference Finals.”
Imagine my surprise, then, when one Alert was about financial access but didn’t have to do with Bank On. In an article published on May 23, Spectrem’s Millionaire Corner highlights findings from a report that concludes that middle-income Millennials – and not just low-income individuals – rely on alternative financial services. For example, the rate of prepaid debit card use is as high for those making between $50,000 - 75,000 per year as it is for those making under $25,000 annually.
What struck me about this article – aside from the obvious omission of Bank On initiatives despite the article being titled “Millennials Bank on Alternative Financial Services” – was that no mention of alternatives to these “alternatives” was made. In other words, the Think Finance report and Millionaire Corner’s accompanying recap simply state that use of pawn shops, payday lenders and the like is ubiquitous among a wide swath of the population, but no discussion of how we might approach this problem exists. In fact, the data aren’t even presented as a problem at all.
But, a problem it is. That a sizeable barrier exists not only for low-income people but also for somewhere around half the population would seem like impetus enough to do something. Yet, inaction has been the path for policymakers who see the issue simply as a challenge among many rather than as one of the largest factors preventing people from building assets.
Luckily, there is good news: an alternative to predatory lending practices and products that keep people from accumulating wealth exists in the form of the Bank On USA initiative. The 70 or so state and local Bank On initiatives have proven immensely important, and their value should be expanded at a national level so financial access can be a reality for everyone in the United States, not just the people lucky enough to live in the select locales where enough support for the initiative exists.
Of course, as I see it, there’s another takeaway from the Millionaire Corner article: if you’re going to talk about financial access and put “bank on” in the headline, at least reference Bank On so I don’t get overly excited when sifting through my daily Google Alerts.