PROVIDENCE — Rhode Island has the largest percentage of residents who do not have a traditional bank account in New England, according to a new survey by the Federal Deposit Insurance Corporation.
The survey found 6.2 percent of Rhode Island households do not have a checking or savings account. That was lower than the national figure (7.7 percent) but higher than those of other states in the region.
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Connecticut has the next-highest share of “unbanked” residents (5.3 percent), while New Hampshire has the lowest (2.2 percent). In Massachusetts, 4.1 percent of households do not have a bank account.
Nationally, Mississippi has the largest share of “unbanked” residents (16.4 percent) and Utah has the smallest (1.7 percent).
The survey also found that nearly one in five Rhode Island households — 18.4 percent — either do not have a bank account or do have one but still rely regularly on “alternative financial services” such as payday loans or pawn shops.
Rhode Island’s “underbanked” population is smaller than the nation’s as a whole (25.6 percent) but second-highest in New England, behind Connecticut (19.1 percent). In Massachusetts, 15.5 percent of residents are “underbanked.”
The FDIC National Survey of Unbanked and Underbanked Households was conducted by the U.S. Census Bureau in January. The agency said it was conducted to gain insight into the financial lives of Americans who do not regularly use the traditional banking system.
“Access to an account at a federally insured institution provides households with an important first step toward achieving financial security — the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, and access credit on affordable terms,” FDIC Chairwoman Sheila Bair said in a statement.
“By better understanding the households that make up this group — who they are and their reasons for being unbanked or underbanked, we will be better positioned to help them take that first step,” she said.
In Rhode Island, as in other states, the survey found that low-income and minority households are disproportionately more likely to be outside the banking system.
Poor Rhode Islanders — those with a household income of less than $15,000 — are the least likely to rely on traditional banking services, with 49.9 percent found to be either “unbanked” or “underbanked.” The figure falls by more than half, to 18.1 percent, among residents with incomes between $15,000 and $30,000.
Black Rhode Islanders, at 41.6 percent, are the most likely either not to have a checking or savings account or not to use one regularly. Among whites, the figure is 15.1 percent and among Hispanics it is 33.8 percent.
In the survey, the most likely reasons Americans gave for not having a bank account was that they thought they did not have enough money to need one.
Additional information is available at economicinclusion.gov.
Access to an account at a federally insured institution provides households with an important first step toward achieving financial security — the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, and access credit on affordable terms,” FDIC Chairwoman Sheila Bair said in a statement.
This is a crock as the banks have created the mess this country is in and they are blocking the oppportunity for the low income to even opening an account as most banks with thieir fee’s that they tack on to the average consumer and what they have done with the housing market and mortgage market could fill several federal prisons on the fraud & outright lies that they and the elected officials have covered up the whole thing and of course we have Mr.Bernacke with the presses running 24/7 to ruin the economy for generations to come. Keep up the good work all you banks and are elected officials in washington.
The first comment, from Matt, is based on common misperceptions about the causes of the housing and mortgage crisis. The actual responsibility lies largely with non-bank mortgage companies (which sold inappropriate mortgage products to individuals), large investment banks (which combined the inappropriate mortgages with normal ones and converted them into bonds to sell to investors), and the bond rating agencies (which higly rated such bonds that contained such toxic mortgage assets). Speculative consumers, who borrowed excessively to buy real estate thinking that its value could only go up and their income would never fall, are responsible for their own losses. There are many banks that are making genuine efforts to provide account products that are appropriate to unbanked and under-banked consumers, and are helping such customers to learn how to use them. Used appropriately, these products are usually less expensive that services offered by nonbank financial service companies. The number of people for whom these products are needed represent a business opportunity for banks to do well by doing good.