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Ken Sweet and Samantha Hendrickson, Associated Press/USA Report
NEW YORK (AP) — The number of unbanked Americans fell to a record low last year. This is because the proliferation of online-only banks and an improving economy have encouraged more Americans to join the traditional financial system.
According to a new report released Tuesday by the Federal Deposit Insurance Corporation, 4.5% of Americans, representing about 5.9 million households, will not have a bank account in 2021. This is the lowest level since the FDIC began tracking his data in 2009, down from 5.4. Percentage of Americans in 2019 survey data.
The decline in unbanked households can be attributed in part to the coronavirus pandemic. State and federal governments distributed trillions of dollars in stimulus packages to Americans after her COVID-19 shut down the US economy in March 2020. The welfare program needed bank accounts to quickly transfer funds to affected people.
“During the pandemic, consumers opened bank accounts for quick and secure access to relief funds and other benefits,” FDIC Acting Chairman Martin J. Gruenberg said in a statement.
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However, the FDIC attributes most of the improvement to a stronger economy in 2021, as coronavirus pandemic restrictions have nearly ended and unemployment has remained low.
Black and Hispanic households remain less likely to have bank accounts, but the numbers are improving. About 11.3% of black households are unbanked, down from her 13.8% two years ago. Among Hispanic households, this figure dropped from her 12.2% to 9.3%.
The main reasons why someone chooses not to have a bank account have changed little from previous surveys. He said one in five of her unbanked households did not have enough money to maintain an account, the main reason.
The FDIC began tracking unbanked Americans in 2009. Data from 2011 show a significant increase in the number of unbanked Americans as a result of the Great Recession. Americans kept bank accounts during the coronavirus recession, but if inflation continues to hit the economy and unemployment rises, the number of unbanked Americans could rise in the future. There is a possibility
Other households had privacy and trust issues with their banks. Large companies such as Amazon have tracked consumer data via credit card usage, and banks are using this data as well.
Americans outside the traditional financial system face many obstacles in their everyday finances. As such, policy makers are pushing unbanked households to open savings or checking accounts. Check cashing services, utility payment services, and unbanked rent payments often charge fees, and those with bank accounts do not.
New immigrants and refugees are among those without bank accounts. Juma Acharya, a former refugee from Bhutan and case manager for Community Refugee and Immigration Services in Columbus, said he’s been getting more and more customers calling him about businesses that don’t accept cash.
“I have never worked with[new]refugees who say they have used credit cards in their lives,” Acharya said.
Acharya said customers typically take at least five months to build up enough credit to open an account with a US bank. In the meantime, Acharya said he is trying to educate clients on how to build a debit card and how to use an electronic benefit transfer card.
A growing number of businesses are no longer accepting cash as a form of payment, and several state legislatures are beginning to address the issue.
Some states and cities, including New Jersey, Massachusetts, San Francisco, and Philadelphia, required cash pickup before the COVID-19 pandemic hit. But since the pandemic began, at least seven states have passed such legislation. This is largely in response to the growing number of contactless businesses following CDC recommendations to limit the use of cash for fear of spreading the virus.
Delaware, New York, Oregon, Arizona, Colorado, Connecticut and Rhode Island have all passed legislation requiring businesses to accept cash, according to data from the National Congress of States. Since 2020, more than a dozen states have introduced cash mandate bills. At least three bills were rejected by committees in Republican-majority states Florida, Mississippi and North Dakota, while two bills were passed in Democratic-majority states New Hampshire and Wisconsin.
In Ohio, Senator Louis Blessing III of R-Colerain Township introduced a bill in Congress in 2021 that would open businesses to lawsuits if they don’t accept cash as payment. Blessing cited protections for immigrants and poverty-stricken communities, consumer data privacy, and seniors who are more likely to use cash as the driving force behind the bill.
The bill is currently pending in the Ohio legislature.
“If this bill passes, every Democrat in the state will vote for it,” Blessing said.
The survey also found that the proportion of so-called unbanked households, who have bank accounts but use high-value financial services such as check cashing, pawn shops, payday loans, and money transfers, has also declined. I found out.
The FDIC also found that nearly half of all American households will use non-bank payment services such as CashApp, Venmo and PayPal in 2021.
AP Ohio State House Reporter Samantha Hendrickson contributed to this report from Columbus, Ohio.
Hendrickson is a member of the Associated Press/Reports for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to cover hidden issues.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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