More Americans added bank accounts during the pandemic
The share of U.S. households with no checking or savings account declined during the COVID-19 pandemic, according to a new government report.
In 2021, the unbanked rates of white, Black and Hispanic households fell from 2019, the last time the Federal Deposit Insurance Corp. conducted a similar survey. The measure for homes the banking watchdog’s report classified as Asian increased.
About 4.5 percent of households lacked a bank or credit union account as of last year, the FDIC said, the lowest level since the survey began in 2009. The decline was in part a result of people using banks to receive benefits and government support during the pandemic, according to the acting head of the agency.
“During the pandemic, consumers opened bank accounts to access relief funds and other benefits quickly and securely,” FDIC Acting Chairman Martin Gruenberg said in a statement.
The FDIC survey, which has been conducted every other year since 2009, found that many newly banked households said receiving a government benefit was part of their decision to open a bank account.
The agency said that while there remains a “sizable gap” between the unbanked rates of white households versus those led by racial minorities, the new findings showed some improvement.
The rate of white households that were unbanked stood at 2.1 percent in 2021, compared with 2.5 percent in 2019, according to the report. Meanwhile, the rate for Hispanic households last year was 9.3 percent, compared with 12.2 percent two years
earlier.
For Black households, the rate fell to 11.3 percent in 2021, versus 13.8 percent in 2019, the watchdog said. The measure for Asian households increased to 2.9 percent from 1.7 percent in 2019, according to the study.
Single mothers
The FDIC also found millions of U.S. households remained “underbanked,” meaning they had traditional accounts but also used financial products such as payday loans or money
orders that the FDIC says are disproportionately used by unbanked homes.
The survey also found that single-mother households had a “much higher” unbanked rate than those of married couples.
The rate of people with disabilities from ages 25 to 64 who don’t have a checking or savings account with an insured FDIC institution also dropped. In 2021, working-age households with a disability was nearly 15 percent, compared with 16.2 percent in 2019 and 18.1 percent in 2017.
Critical step
Having a bank account is considered a critical step for building wealth. Advocates argue that those Americans without one will pay significantly more for basic services, such as cashing checks and making payments.
Rob Nichols, who leads the American Bankers Association trade group, said the result were partly because of efforts by the industry to expand access. “America’s banks’ strong commitment to financial inclusion contributed to this progress,” he said in a statement.