Report: Crises overshadow bank access gains

CHARLOTTE, N.C. — More Americans than ever obtained a basic bank account in 2019, the Federal Deposit Insurance Corp. said Monday. But the report did not take into account the coronavirus pandemic and historic recession, government experts warned, and it’s highly likely that a number of Americans will end up unbanked yet again.

The FDIC study looks at the unbanked — Americans who do not have a basic checking or savings account — and why these individuals are outside the traditional bank system. While a small number of Americans choose not to have a bank account due to their distrust of the banking system, most unbanked are in poverty and more likely to be Black and Latino.

The FDIC estimates 5.4% of Americans are considered unbanked, a record low for that metric since the report started in 2009, and down from 6.5% in 2017 which is when the FDIC looked at the unbanked. That is equal to roughly 7.1 million households, the FDIC said.

The 5.4% figure does not tell the full story, mostly because racial and ethnic minorities are disproportionately more likely to be unbanked. The FDIC study shows only 2.5% of white households are unbanked, while 13.8% of Black households and 12.2% of Hispanic households are considered unbanked. Roughly one out of four households making less than $15,000 a year do not have a bank account.

The FDIC was unable to give an estimate on how much the pandemic has moved banked Americans into the unbanked, but it almost certain that figure is climbing. The Great Recession caused millions of Americans to lose their bank account, and the number of unbanked hit a record high of 8.2% in 2011 in the aftermath of the financial crisis.