Due to nationwide economic growth, the number of unbanked Americans fell to 6 percent last year, according to a Federal Reserve report.
The figure was down from 8 percent in 2015. The survey, which was released May 23, covers the economic well-being of U.S. households. The Fed has been producing the study since 2013.
In addition, the number of “underbanked” Americans — people with a bank account but who also use alternative financial services like check cashing or money orders — dropped from 21 percent in 2015 to 16 percent in 2018.
The survey also saw progress in savings performances. About 61 percent of respondents said they could cover a $400 emergency expense in cash. That’s up 11 percent from 2013. It states that seven in 10 respondents said they could cover three months of expenses from savings or from a combination of savings, assets and credit after losing their main source of income.
The survey unveiled that 26 percent of non-retired respondents reported having no retirement savings or pension. That includes just 13 percent of people 50 years or older – progress from prior years.
Generally, three-fourths of American households surveyed last fall said they are “doing OK” or “living comfortably.” This number is an increase of 12 percent from 2013.
It notes that 7 percent said they were finding it challenging to get by, a drop of approximately half since 2013. The survey revealed that 31 percent stated they were better off than the prior year, while 13 percent said they were worse off. The rest said they were doing about the same.
Local community banks are helping spur these national trends. For example, Metairie Bank, is seeing success in two products targeted to that arena.
Ron Samford, president and CEO of Metairie Bank, said one is their “Second Chance” checking, which the bank opens even for those who have had an account charged-off at a financial institution in the past. Another product is the “secured” credit card, which is secured by a savings account. It is offered to those who either have no credit history or need to repair their credit rating.
“Both of these have been applauded by regulators and well-received in our markets, and hopefully are helping to widen the net in terms of attracting the previously ‘unbanked,’” Samford said.
Mike Townsend, spokesman for the American Bankers Association, said it’s encouraging to see that more people have signed up for a bank account across the country.
“America’s banks want to make sure everyone has access to the financial products they want and need, and we continue to work toward that important goal,” Townsend said.