WASHINGTON–For the third consecutive survey period, the number of U.S. households without a bank account has fallen, according to the 2017 biennial National
Survey of Unbanked and Underbanked Households released by the FDIC.
“The good news is that our nation’s banking system is serving more American households than ever before. The bad news is that even as the overall number of people who are unbanked has declined, 8.4 million households continue to lack a banking relationship,” said FDIC Chairman Jelena McWilliams in a statement.
According to the FDIC, the percentage of U.S. households that were unbanked in 2017, the most recent year of the survey, was 6.5%, the lowest rate recorded since the FDIC began conducting the survey in 2009. It was down from 7.0% in 2015, and down significantly from a high of 8.2% in 2011. The unbanked numbers for 2017 equate to 14.1 million adults in 8.4 million households not having a checking or savings account, the FDIC said.
“The decline in the unbanked rate from 2015 to 2017 can be explained almost entirely by improvements in the socioeconomic circumstances of U.S. households,” according to the FDIC.
What Data Also Show
The number of underbanked U.S. households was also down compared to 2015 levels, the survey found. In 2017, 18.7% of U.S. households were considered underbanked, or approximately 48.9 million adults in 24.2 million households. For purposes of the survey, the term underbanked refers to households that had an account at an insured institution but also obtained financial products or services outside of the banking system.
“Consistent with previous surveys, banking status in 2017 varied considerably across the U.S. population,” noted the FDIC. “For example, unbanked and underbanked rates were higher among lower-income households, less-educated households, younger households, black and Hispanic households, households headed by working-age individuals with a disability, and households with incomes that tend to vary from month to month.”
Mobile banking continues to become an increasingly important way for consumers to access their accounts, according to the survey. In 2017, mobile banking was used by 40.4% of banked U.S. households to access their account, almost double the 23.2% four years earlier.
According to the survey results, 86.0% of banked households visited a bank branch in the past 12 months, and 35.4% visited ten or more times. This held true for households that used online or mobile banking as their primary means for accessing their accounts: 81.0% of banked households that used mobile banking as their primary method visited a branch in the past 12 months, and nearly one-quarter (23.0%) visited ten or more times.
Other Findings
Other key findings in the survey include:
- Nearly 13% of households (14.8 million households) demonstrated unmet demand for mainstream small-dollar credit, and a majority of these households (57.2%) reported staying current on bills in the prior year. The report notes that new underwriting technologies, such as those that rely on transactions in consumers’ checking accounts, could help expand credit availability for some of these households.
- On- in-five U.S. households (22.7 million households) did not use mainstream credit in the prior 12 months and, consequently, may lack a credit score. Black and Hispanic households at every income level evaluated in the survey were more likely to be in this condition than white households. The report notes that helping these households establish and build a credit history can make it easier for them to access credit on reasonable terms when a need arises.
- Along with 86% of banked households, almost one in six unbanked households visited a bank branch in the past year. The report notes that these visits may represent key opportunities to inform unbanked households about products and services that can meet their needs.
- While unbanked rates have fallen in recent years, those that remain unbanked have proven more and more likely to respond that they are “not very likely” or “not at all likely” to open a bank account in the next year (75.0% in 2017 versus 62.1% in 2013). This fact, along with evidence that certain population segments remain much more likely to be unbanked, suggests that strategies targeted at addressing barriers to bank account ownership for specific groups may help further reduce unbanked rates.
- The share of households reporting that they turned to nonbank firms in the last year for the provision of credit and transaction services tracked in the survey dropped to 22.1%, down from 24.0% in 2015 and 24.9% in 2013. The drop was evidenced in both the use of credit and transaction services.
For additional findings, go to economicinclusion.gov.