"We Don't Do Banks" - Financial Lives of Families on Public Assistance

When asked whether he or anyone in his household has a bank account, Billy, a 24-year-old out-of-work father of two young daughters quickly retorted, “We don’t do banks.” A recent survey by the Federal Deposit Insurance Corporation (FDIC) reveals that Billy is not alone—more than 9 million American households are unbanked, meaning they have no checking or savings account. For more than a decade, policy researchers and advocates have sought to increase the use of bank accounts by low-income and minority households, both by increasing demand through education and outreach and by encouraging banks to better tailor their products to the needs of low-income consumers.

Motivating this line of policy advocacy is the assumption that low-income families would be financially better off “banked.” And there is good reason to believe this is the case: Unbanked consumers spend hundreds of dollars a year conducting routine financial transactions. However, this near singular focus on the banking status of households and its relation to poverty has prevented a richer appreciation of how low-income families manage their money.

 assets.newamerica.net/publications/policy/we_dont_do_banks