Payment Law Advisor Legal Commentary and Resources for the Payment Industry

FDIC Releases 2011 National Survey of Unbanked and Underbanked Households

Posted in Regulatory and Compliance

The Federal Deposit Insurance Corporation (FDIC) recently published the results of the 2011 FDIC National Survey of Unbanked and Underbanked Households, a compilation of responses from nearly 45,000 households on their use of retail financial products and services.  (click here for the report; Section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005, Pub. L. 109-173, requires the FDIC to conduct ongoing surveys of unbanked and underbanked households.)  According to the results, more than one in hour households (28.3 percent) are unbanked or underbanked.  The number of unbanked households (those without a bank account) increased by 821,000 since the first survey in 2009, a 0.6 percent increase.  However,  nearly half of the unbanked households in 2011 have had an account in the past, and nearly half (48.2 percent) report they are likely to join the banking system again in the future.   

The survey also explores the impact of alternative financial services (AFS), noting that about 25 percent of households—including all underbanked and 64.9 percent of unbanked households—have used AFS in the last year.  Those who use AFS services tend to perceive these services as more convenient, faster, less expensive, and easier to obtain than bank financing.  The FDIC suggests that making affordable small-dollar loans available could attract consumers who currently rely on AFS, and that “Economic inclusion efforts require not only banking the unbanked, but also retaining and better engaging current bank customers to prevent them from becoming unbanked or underbanked”.