FDIC: Too few Americans, especially minorities, make good use of banking system
UPDATE: GTE Federal Credit Union's opening a branch (in photo) on Dec. 22 in St. Petersburg's Midtown neighborhood -- the heart of the city's "unbanked" -- after SunTrust tried but failed to do the same. Story's here. (Photo: James Borchuck of St. Petersburg Times.)
Wake up and good morning. A federal bank regulator today will issue a report saying that too few Americans use the banking system for basic services like federally-insured checking and savings accounts -- and are thus failing to build a credit history. The regulator -- the Federal Deposit Insurance Corp. -- says the problem is greatest among minorities: 53 percent of African-American households and 43 percent of Hispanic households use check cashers or similar services instead of or in addition to banks.
Nationally, 17.9 percent of U.S. households have a checking or savings account but use alternative financial services, such as check-cashing outlets or pawnshops. Alaska has the highest percentage, at 25.5 percent. Minnesota has the lowest, at 11.1.
And Florida weighs in with just 16.8 percent of households that, while having a checking or savings account, are considered "underbanked" because they use alternative financial services according to the FDIC data. The regulator wants to coax banks to offer basic checking services at low cost and without the hidden fees and traps -- like overdraft charges -- that discourage many customers and that banks have pushed aggressively as a source of profits.
The FDIC report will be issued this morning with more details but highlights of the study appear in this morning's USA Today. Here is the story.
UPDATE: The FDIC has now issued its report. Here is the link.
-- Robert Trigaux, Times Business Columnist