The Inclusive Economy
First Look: FDIC Releases New Unbanked Data
By Ethan Geiling on 09/13/2012 @ 12:00 PM
The number of unbanked and underbanked Americans has grown slightly since 2009, according to new data released by the FDIC yesterday.
More than eight percent of U.S. households – or approximately 17 million adults – are unbanked, up from 7.6% in 2009.* The number of underbanked households rose to 20.1% - or approximately 51 million adults – which is slightly higher than the 18.2% of households in 2009. Overall, the combined number of unbanked and underbanked households jumped three percentage points from two years earlier.
Unbanked rates by geography
Although the unbanked rate appears to have increased and decreased in many states, the FDIC reports that the change is only statistically significant in three states: West Virginia, Wyoming and Minnesota. Because of changes to the survey methodology, underbanked rates from 2009 and 2011 are not directly comparable. However, the proportion of households using Alternative Financial Services did increase in eight states – Alabama, Nevada, Arkansas, Georgia, New Jersey, South Dakota, Vermont, and Rhode Island – and decreased in Alaska and the District of Columbia.
The FDIC looked at unbanked rates in the 71 largest Metropolitan Statistical Areas (MSAs). Of these 71, there was a statistically significant change in seven of them – the unbanked rate increased in five and decreased in two. The FDIC does not speculate about why rates may have changes in these cities.
Use of savings accounts
For the first time, the FDIC examined differences in checking and savings account usage. A large chunk of Americans (29.3%) do not have a savings account, which is seen as a major opportunity for financial institutions. Some interesting trends also emerge when you break down the data by different subgroups. About half of Black and Hispanic households do not have a savings account, compared to about one-quarter of Asian and white households. The majority (61.0%) of the lowest income households (those making less than $15,000) do not have a savings account, compared to less than 10% of households making $75,000 or more a year.
Future banking plans
The FDIC asked unbanked households whether they plan to open a bank account in the near future. The majority of households (61.7%) said that they are not likely to open an account. However, households that previously had a bank are more likely than never-banked households to report that they will open an account.
One of the most interesting findings from the FDIC’s report is the reasons that unbanked households want to open accounts. The top three reasons are:
The third reason – to save money for the future – is particularly noteworthy, and suggests that many low-income people have the desire to save, but lack the vehicle to do so.
There is far too much rich information in the FDIC’s report to cover in a blog post. However, next week Keith Ernst from the FDIC will be at CFED’s Assets Learning Conference presenting on findings during the Applied Research Forum Kick-Off. If you’re attending the ALC, we encourage you to attend this session to learn more!