Poor often don’t know benefit of banks: Study by U Mass Dartmouth

Low-income families use costly check-cashing and loan services not because they lack access to banks, but because they lack knowledge of banking options and their advantages, according to a study by the University of Massachusetts Dartmouth.

For example, the study found that about one in four low-income residents in the New Bedford area do not have a bank account because they believe they cannot afford it - although most community banks and credit unions offer low-cost or free accounts as required by state law. In addition, the study found, even low-income residents with bank accounts still use check-cashing establishments more than their banks...

...On average, low-income people without bank accounts spend about 5 percent of their income, about $800 to $1,000 a year, on fees from check-cashing services, according to Bank On, a San Francisco program that aims to remove banking barriers for people with low incomes. That adds up to about $40,000 over a working life.

articles.boston.com/2011-07-06/business/29744008_1_bank-accounts-convenient-hours-and-locations-check-cashing-services