The portion of U.S. households without access to a bank account dropped in 2015 to the lowest level seen since the government started keeping track in 2009, according to a new survey released Thursday.
The Federal Deposit Insurance Corporation reported Thursday that just 7 percent of households were unbanked in 2015, down from 7.7 percent in 2013.
The gains reflect the ongoing economic recovery and the healing from the 2008 crisis, but the FDIC said that the improvement could not be explained by the economy alone.
“Developing a relationship with a bank helps consumers build assets and create wealth, makes them less susceptible to discriminatory or predatory lending practices, and can provide a financial safety net against unforeseen circumstances,” said FDIC chairman Martin Gruenberg.
The survey also showed that mobile banking continues to expand, and that more people now regularly access their bank accounts online than through bank tellers in person. Use of mobile phones for banking has almost doubled in the past two years.
Yet 27 percent of people are still unbanked or underbanked, meaning that they use services like payday lenders or pawnshops in addition to bank accounts.
For people for whom maintaining a bank account would be too expensive or inconvenient, prepaid cards are increasingly a top option. The share of households that used prepaid cards grew from 2013 to 2015, from 7.9 percent to 9.8 percent.
Alternatives to banking have been targeted for stricter regulation this year by another agency, the Consumer Financial Protection Bureau. The agency finalized new rules on prepaid cards this month, and proposed sweeping new rules for payday loans this summer.
Many people turn to such products because bank accounts are not right for them. The main reason that unbanked households reported for not maintaining a bank account was that they didn’t have enough money to meet account minimums. Households also said that they didn’t trust banks and avoided them for privacy reasons, and that bank fees, such as overdraft fees, were too high or unpredictable.
“As policymakers considers how to spur further improvement, it is important to address the role of overdraft,” said Joy Hackenbracht, an officer with The Pew Charitable Trusts’ consumer banking project. “Pew’s data show 60 percent of the unbanked reported high or unpredictable overdraft fees as a reason for not having an account, and overdraft fees are the most common reason checking account holders exit the banking system. Back-end, hidden overdraft fees also can undermine trust, which the FDIC survey cited as a key contributor to the number of unbanked.”
The FDIC’s survey was conducted with the Census Bureau in June of 2015 and involved responses from over 36,000 households.
