FDIC: Share of ‘Unbanked’ Fell in 2015

The share of the population that is unbanked fell to 7 percent in 2015, the lowest share ever recorded  in the FDIC’s biennial survey of unbanked and underbanked households, FDIC Chairman Martin Gruenberg said in a speech today. The reduction in the unbanked was also seen across many population segments and demographics that have historically been less likely to use mainstream financial services, including blacks, Hispanics, the disabled and low-income households.

Offering a preview of the full survey, which is due to be released next month, Gruenberg noted at an Arlington, Va., conference that the share of households that are “underbanked” — those that have a bank account but also use nonbank, alternative financial services such as check cashers — remained steady from previous surveys. He noted that variable income was a major driver of whether consumers were unbanked. Those who hold seasonal or irregular work may enter and exit the banking system based on when they have direct deposits, and leave their bank when they no longer receive steady paychecks.

“These results suggest that it would be useful for banks to consider whether they can be more responsive to the needs of customers, or potential customers, experiencing variable income,” Gruenberg said. “For example, banks could offer low-cost, safe, and transparent transaction accounts without overdraft fees and with low minimum balance requirements designed to improve the sustainability of banking relationships for consumers.”