Coronavirus could make savings crisis worse

WASHINGTON » Consumers are stockpiling toilet paper, nonperishable foods, hand sanitizer and face masks in fear that the coronavirus will hit their communities and sequester them in their homes.

But being forced to stay home due to illness could result in layoffs or unpaid furloughs for many workers who are already living paycheck to paycheck. These folks may need cash more than canned goods.

A distressing number of Americans have insufficient emergency savings, and many of the nation’s largest banks aren’t doing enough to encourage people to automatically put money away in a savings account, according to a new report being released by the Consumer Federation of America (CFA).

Only 31% of households in the lowest income quintile (less than $23,290 annually) and 45% of those in the second income quintile (between $23,291 and $41,315 annually) have a savings account or money market deposit account, according to CFA’s analysis of the data from the Federal Reserve Board 2016 Survey of Consumer Finances.

The CFA’s report comes at a crucial time. Automated savings is critical for low- to moderateincome families. If a $500 car repair can crash people’s budgets, just imagine the financial disruption faced by households impacted by the coronavirus because either they are too sick to work and run out of sick leave, or their income is reduced because people aren’t eating out or shopping.

The CFA set out to determine if the banks provide affordable access to lower-income savers, including the long-term poor and many college students and