One in five households in the U.S. were underbanked last year, with poor access to normal banking services, while about 9.6 million households representing 25 million people had no bank accounts at all, according to recently released survey findings by the Federal Deposit Insurance Corp.
The 2013 FDIC National Survey of Unbanked and Underbanked Households found the proportion of unbanked households declined from 8.2 percent in 2011 to 7.7 percent in 2013, while the share of underbanked households remained essentially unchanged at 20 percent.
The decrease in the proportion of the unbanked can be explained by improving economic conditions and the changing demographic composition of households, according to FDIC officials.
The FDIC conducts the survey every two years in partnership with the U.S. Census Bureau to inform the banking industry and policymakers on the demographics and needs of unbanked and underbanked residents.
The survey found that underbanked households were more likely to use mobile banking devices to access their accounts than other groups ”“ 29.2 percent of underbanked households compared with 21.7 percent of fully banked households.
Other key findings include:
- A 0.5 percent decline in the proportion of unbanked households from 2011 to 2013 is estimated to comprise 1.5 million people and more than half a million households.
- One in five, or 24 million, households were underbanked in 2013, consisting of an estimated 68 million people.
- 35.6 percent of unbanked households said they had insufficient money to keep in an account or meet minimum balance requirements.
- 34.1 percent of households that recently became unbanked experienced either a significant income loss or job loss.
- 22.3 percent of unbanked households reported using a prepaid debit card in the prior 12 months, compared with 13.1 percent of underbanked and 5.3 percent of fully banked households.
- One-quarter of households have used at least one alternative financial service such as nonbank check cashing or payday loans in the past year. Four in 10 unbanked and underbanked households used an alternative in the past 30 days.
The FDIC made three recommendations based on survey findings to better meet consumers”™ needs:
- Develop strategies to help households maintain or renew banking relationships through economic transitions such as job loss.
- Explore opportunities to deploy and market checkless checking accounts and other options to meet the transactional needs of households.
- Integrate mobile banking initiatives with branch-based strategies in overall efforts to address consumers’ needs.
