Access to Financial Services

People of Color More Likely to be Unbanked

Over 25 million households in America do not have bank accounts, of which 80 percent are people of color:  Blacks (46 percent) and Latinos (34 percent).[1]  This means that people of color are 4 to 5 times more likely than Whites to be unbanked.

"Unbanked" or "underbanked" are the terms used to describe communities and individuals who do not participate in the financial services industry, or who participate minimally.  Unbanked individuals do not have checking or savings bank accounts, and are therefore limited to accessing check cashing and loan services from independent, usually predatory check cashers and payday lenders.

The greater propensity of people of color to be unbanked has several possible causes:

• Lack of bank branches conveniently located in lower-income communities of color
• Lack of trust in the community for banking institutions
• Minimum loan amount requirements at traditional banks too high for needs of lower-income customers
• Insufficient income to open an account in institutions with minimum balance requirements
• Lack of marketing by the banks targeted at communities of color
  

Greenlining negotiates directly with top officials from banks to ensure that they are offering their asset-building services to all communities, and to help them develop products and policies that can better serve lower-income communities.

[1] South Carolina Council on Economic Education  http://www.finalcall.com/artman/publish/article_4398.shtml