Underreported: Underbanking

Thursday, September 17, 2009

Over 100 million Americans are “underbanked”—meaning they either cannot access or choose not to use traditional financial services offered by mainstream banks. Instead, they turn to alternatives like check cashing services, prepaid cards, and payday loans. On today’s first Underreported Melissa Koide, deputy director of the Asset Building Program at the New America Foundation, explains this shadow banking system.


Melissa Koide

Comments [4]

Ray Normandeau from

I feel that there are some who do not use banks for the reason that they would be unable to reconcile their statements and balance their accounts.

For older people, it could be a vision problem.
For some, lack of math scales.

Sep. 18 2009 12:14 AM
Elizabeth Santeix from New York


Melissa Koide's take on the underbanked was informative but did not speak to the work that is being done every day to respond to this issue.

Let's have a conversation about the un-banked, under-banked and over-banked with those you have been on the frontlines of the issue for over 30 years. Community credit unions, who all over our country -- most importantly in the urban centers, deliver applied financial education and full banking services, including micro-loans, at non-usury rates.

These organizations are grass roots, owned by the communities they serve and doing the hard work of educating and building their members' assets one person at a time.

Let's continue this conversation by talking to those who are actually creating alternatives -- and are visionaries with results. I recommend you make contact with Bill Myers

Elizabeth Santeix
Former Board Chair, LESPFCU

Sep. 17 2009 02:18 PM
James B from NYC

The recently-enacted Federal credit reform act will probably have the effect of limiting access to credit cards for many low & middle income people who cannot meet the credit standards required to avail themselves of most credit cards. This is INTENDED & for their own good. It is standard liberal paternalism to protect people from their own 'irrational' (not-in-their-interest) behaviors. Like social security, which forces people to save for their retirement whether they want to or not or the medicare health insurance scheme which requires people to set aside a portion of current income for the unforseeable but likely health expenses of old age, limiting lower income people's access to credit cards will protect them from their own inability to utilize such credit in wise or prudent ways. As the Obama administration increases the range of government measures that 'nudge' people in one direction or another (for their own good), paternalism, on the European scale, will help most people avoid the errors & behaviors that reduce their security from cradle to grave. How this squares with 'equality' or one person, one vote remains to be seen - as we increasingly recognize that the nudgers & the nudged are not always the same people - i.e. some of us are better suited to rational, prudential behaviors & should be empowered to nudge those less so.

Sep. 17 2009 01:59 PM

Didn't the 9/11 hijackers get their job done without any banks?

Sep. 17 2009 01:38 PM

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