It costs money not to have a bank account.
Many Americans are unbanked, meaning they don't have an account. The Federal Deposit Insurance Corporation is piloting an awareness program in Houston and Atlanta to get more people to open an account. In Houston, about 10% of households lack accounts compared to about 5% of the national average. Those unbanked are more likely to be minorities.
The FDIC's Julianne Breitbeil says this put some in danger during the the height of the pandemic. "We saw that people were receiving their stimulus funds by mail at the same time they were being told to stay home. They were receiving paper checks from their employers, without a bank account. So they were standing in line to cash their checks at the same time that businesses were temporarily closed."
She says if a consumer gets into an FDIC regulated institution, they can avoid certain fees and save for emergencies, build a credit history and obtain lower interest rates for mortgages and loans. "If they get into these relationships, they can have a stronger financial future."
The FDIC has been partnering with a group called Bank On. In some cases there were fees or other hurdles that prevented people from getting accounts. "We are working with Cities for Financial Empowerment. They have something referred to as the Certified Account. These are from Bank On, you'll even see them with "Bank On Houston," where you can reach to banks in your community that have these types low cost accounts, particularity if you have direct deposit so you can avoid check cashing fees. There are options out there, and part of this campaign is to make sure people see those options."
She says this is especially important now. "We do know with the child tax credits that are beginning to roll out to families this July, that this is an opportunity to reach out to as many people as possible so they can set up these bank accounts in advance and easier access to this money."
The Brookings Institution estimates a full time worker could lose up to $40,000 over their lifetime without a low-cost checking account.
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