Unbanked

The unbanked are adults who do not have their own bank accounts. Along with the underbanked, they may rely on alternative financial services for their financial needs, where these are available.

The unbanked are described by the Federal Deposit Insurance Corporation (FDIC) as those adults without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another. The FDIC estimates there are 10 million unbanked or underbanked American households.

One report found the nationwide rates to be 7.7% unbanked and 17.9% underbanked, with the most unbanked state Mississippi, at 16.4%. Places where over 20% of residents have no bank accounts include Miami, Florida; Detroit, Michigan; Laredo, Texas; Newark, New Jersey; Hialeah, Florida; Hidalgo County, Texas, The Bronx, and Cameron County, Texas. Many counties with less than 100,000 residents had even higher rates, including Starr County, Texas, at 32.7%. Some census tracts in Savannah, Georgia; Cleveland, Ohio; Nashville, Tennessee; and Atlanta, Georgia had over 40% unbanked residents.

The majority of the unbanked and underbanked are American-born while a growing number are immigrants where the two groups have low income as a commonality and lack the minimum balance to open checking and savings accounts. According to Congressman Hinojosa, half of the unbanked had a bank account previously but are choosing to not have an account and opting to using the services of check cashers and payday lenders instead. Research has shown that immigrants who have experienced a banking crisis in their countries of origin are significantly less likely to have bank accounts in the U.S., and researchers also found that lower rates of financial market participation tend to persist even for immigrants who have lived in the U.S. for several years. Attributes that contribute to these decisions, however, vary for each racial/ethnic group.

...
Wikipedia