A large number of Americans do not have or use traditional mainstream financial products like checking or savings accounts.
In many cities, such as Los Angeles, almost every family has a checking or savings account, but in places like East St. Louis, Illinois, more than half of the households or unbanked or underbanked.
Unfortunately, in cities like ours, in a state that protects predatory lending companies, too many residents are still being ripped off because of a lack of familiarity with banks or nervousness about protection of their money, leading them to rely on check cashing services or payday lending companies.
Memphis ranks #5 among large cities (more than 100,000 households) for percentage of unbanked and underbanked people, respectively 16.7% and 28.1%. Shelby County is #7 among largest counties with the highest percentage of unbanked people – 14% unbanked and 25.8% underbanked.
Unbanked means no checking ore savings account. Underbanked means no account but continues to rely on alternative finance services like check-cashing services, payday loans, rent-to-own agreements or pawn shops.
Top 10 Unbanked Large Cities:
1. Miami – 20.1% unbanked and 21.4% underbanked
2. Detroit – 20% unbanked and 29.3% underbanked
3. El Paso – 17.4% unbanked and 25.7% underbanked
4. Cleveland – 17% unbanked and 25.41% underbanked
5. Memphis – 16.7% unbanked and 28.1% underbanked
6. Dallas – 15.6% unbanked and 26% underbanked
7. Houston – 15.4% unbanked and 25.6% underbanked
8. Buffalo – 14.9% unbanked and 23.8% underbanked
9. Philadelphia – 14.3% unbanked and 23.5% underbanked
10. Baltimore – 13.9% unbanked and 25.4% underbanked
National Average: 7.7% unbanked and 17.9% underbanked
Top 10 Unbanked Counties:
1. Hildalgo County, TX – 21.6% unbanked and 27.1% underbanked
2. Bronx County, NY – 20.8% unbanked and 27.2% underbanked
3. Cameron County, TX – 20% unbanked and 26% underbanked
4. El Paso, TX – 18% unbanked and 26.1% underbanked
5. Miami-Dade County, FL – 14.4% unbanked and 20.8% underbanked
6. Philadelphia County, PA – 14.3% unbanked and 23.5% underbanked
7. Shelby County, TN – 14% unbanked and 25.8% underbanked
8. Kings County, NY – 13.9% unbanked and 22.5% underbanked
9. Dallas County, TX – 13.6% unbanked and 25.4% underbanked
10. Harris County, TX – 13.3% unbanked and 24.7% underbanked
Cities with Most Unbanked Census Tracts:
Of the top 100 most unbanked census tracts,
7 are in El Paso, TX
6 -are in Cleveland, OH
3 are in Cincinnati, Dallas, Memphis, and Montgomery, AL
Note: of the top 5 unbanked census tracts, Nashville has #3 – 41.4% unbanked and 35% underbanked.
Source: FDIC Survey of Unbanked and Underbanked Households
It might be reasonable to create a high school curriculum on basic money management in the SCS. Part of the course requirements might be creating a savings account in an area bank; perhaps there could be a work-around for students who only have $1 to deposit.
I remember Providence in the mid-70s, the young men I worked with at a small company “banked” at liquor stores: they had accounts there, and brought their paychecks there to pay off the week’s purchases and get the rest in cash.