Saturday, December 5th, 2009
At the beginning of 2009, the Federal Deposit Insurance Corporation (FDIC) initiated an examination of the unbanked and underbanked people of the U.S. as part of Census data collection.
The report was released this week, and shows some worrying trends about financial institution usage, particularly among minority populations.
- Unbanked: This term refers to people who have neither checking nor savings accounts, and who rely primarily on non-bank financial institutions (like check cashing services, payday lenders, refund anticipation loans, etc.) for their financial needs.
- Underbanked: This refers to people who have either a checking or savings account, but rely on alternative financial sources at least once or twice a year.
The Banking Study
According to the executive summary of the report, its goal was to address a gap in reliable data on the number of unbanked and underbanked
households in the U.S.
The issue matters because those without bank accounts lose out on access to lower-cost financial management. Bank use can also permit people to build credit histories and establish financial stability – in other words, it’s in the best interest of the U.S. as a whole to improve access to banks for everyone.
Here’s a look at the hard numbers:
- 25.6 percent of American households (about 60 million adults) are unbanked or underbanked.
- A breakdown by race shows that 43.3 percent of Hispanic households, 44.5 percent of American Indian/Alaskan households and nearly 54 percent of black households are unbanked or underbanked.
- At least 71 percent of un- and underbanked households have incomes of $30,000 per year or less.
- The most common reason people offered for not having a bank account was feeling that they did not have enough money to justify one.
- About two thirds of unbanked households use one or more of these financial tools: non-bank money orders & check cashing, payday loans, pawn shops, rent-to-own agreements and refund anticipation loans.
- About one quarter of unbanked households use none of the aforementioned services, which suggests that cash is their go-to commerce tool.
Opening and maintaining bank accounts is an important step toward financial stability for individuals and households. On a larger level, the high numbers of unbanked Americans can be seen as one symptom of our country’s varied economic woes.
Additional Resources
Full FDIC Report (PDF)
Posted in Banking, Bankruptcy and Predatory Lending, money habits, saving money | Comments Off
Wednesday, March 25th, 2009
Miodrag Trajkovic asked: Every one of us goes through a phase in life where there’s a reversal of fortune. You may be very successful, your business doing well and there is an outpouring of money and you have not faced too many problems. And there may come a time when the situation is adverse and your stars aren’t too hot. You then begin to realize that your financial life is no more the same. You may face a lot of financial crises. This is when you may want to file for bankruptcy. When you start thinking of bankruptcy, you will need some guidance in the whole process. You may come across a lot of legal terminologies in the process of filing for bankruptcy so you may need to hire some expertise in this area. You may have to hire a bankruptcy attorney.
A bankruptcy attorney will be able to give you useful insights, alternatives, terms and conditions and possible escape routes. You may find a legal counselor in a bankruptcy attorney. He is one person who has enough knowledge about the concepts, terminologies and guidelines that are related to bankruptcy. Do not make the mistake of choosing any practicing attorney. You will have to find some one who is an expert in the field. You will require the services of a good bankruptcy attorney.
The important matters that must be kept in mind before hiring the expertise of a bankruptcy attorney include the consideration of the level of confidence of the bankruptcy attorney. Check his background. Does he know the recent laws? Has he won the cases that he has handled? What is his credibility? Is his reputation good? Get an opinion from his other clients. By doing so you will know his capability and gauge his efficiency in handling your case.
Also the other main concern would be the fees that you will have to pay the bankruptcy attorney. If he is reputed in his field he may charge you a substantial amount by way of fees. If a bankruptcy attorney is new to the field, you can bargain and pay him a reasonable amount.
If you have not yet decided about filing a case of bankruptcy, but only want some advice and some enlightenment from a bankruptcy attorney, then the best option is to go to free consultation attorneys. You’ll find them a concerned lot and though they will probably have many cases, do give it a try. Do not be hesitant, be comfortable and share details about your case with them.
It is possible that the bankruptcy attorney that you have appointed is patient with your questions. It is very natural to ask questions because it is the best way to get details of bankruptcy filing. Find a bankruptcy lawyer who is approachable.
It is very important to get a bankruptcy attorney who will represent your case. Try and find the best if you want the case to go on smoothly
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