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Findings from the FDIC National Survey of Unbanked and Underbanked Households

October 26, 2018
Source: National Disability Institute (NDI)

The FDIC {Federal Deposit Insurance Corporation] released findings from its bi-annual, National Survey of Unbanked and Underbanked Households, on October 23. The report highlights that the share of U.S. households without a bank account continued to drop. However, households headed by working-age individuals with a disability did not share in this good news. According to the report, in 2017, 18 percent of households headed by a working-age individual with a disability were unbanked, a rate that had remained relatively unchanged since 2011, compared to nearly six percent of households with no disability. There is some good news, however. The share of these households that are underbanked, meaning they have a bank account, but use alternative financial services, dropped from 28 to 25 percent.

Other findings about households headed by a working-age individual with a disability include:

  • Eighteen percent of households with a disability were unbanked, meaning that no one in the household had a checking or savings account, compared to six percent of people without disabilities. While the unbanked rate for households without a disability has declined steadily since 2013, the rate for households with a disability has remained unchanged. As a result, the disparity between households with and without a disability has widened.
  • The share of these households with a disability that are underbanked, meaning they have a bank account, but use alternative financial services, dropped from 28 to 25 percent. This is still higher than the rate for households without a disability (20 percent), but the disparity is shrinking.

Type of Accounts Owned by Banked Households

  • Among banked households, only 57 percent of those with a disability have a checking and savings account, versus 80 percent of nondisabled peers. Households with a disability are much more likely than others to have only a checking account (39 percent versus 19 percent).
  • Methods Used to Access Accounts

  • Households with a disability differ from those without a disability in their primary method of accessing their bank accounts. Households with a disability were much more likely to use a bank teller (29 percent versus 16 percent) or an ATM (28 percent versus 19 percent) and much less likely to use online banking (27 percent vs 42 percent) or mobile banking (10 percent versus 20 percent). Five percent of households with disabilities and two percent of those without disabilities use telephone banking as their primary method.
  • Between 2013 and 2017, households with and without disabilities have moved away from relying on bank tellers and ATMs to online and mobile banking as the primary method for accessing their account, but households without a disability are moving at a faster rate.
  • Not only are households with a disability less likely to use internet and mobile banking as their primary method of accessing their accounts, they were much less likely to access their account online or through mobile banking at all. Fewer than half of households with disabilities accessed their accounts online, compared with 73 percent of those without disabilities; 29 percent used mobile banking, compared with 51 percent of those without disabilities.
  • Household with disabilities continue to face a digital divide. Only 56 percent of households with a disability have internet access at home and 62 percent have access to a smartphone, compared with 79 and 83 percent of households with no disability.
  • Use of Alternative Financial Services

  • The use of Alternative Financial Services (AFS) for transactions such as check cashing, money orders and remittances has declined between 2013 and 2017 for households with and without disabilities, yet those with disabilities continue to be more likely to use these services. Twenty-eight percent of households with a disability use AFS for transactions, compared with 19 percent of those without a disability.
  • Twelve percent of households with a disability use AFS for credit such as pawn shops, rent-to-own, payday loans and auto title loans, compared to seven percent of those without a disability. This has declined from 15 percent in 2013, but because these services tend to be very costly, the disparity is concerning.
  • Saving for Unexpected Expenses

  • Only 39 percent of households with a disability save for unexpected expenses, compared to 63 percent of those without disabilities. Among those who saved, households with a disability were much more likely to save at home or with family or friends (18 percent versus 10 percent) rather than in a savings or checking account.
  • Access to credit

  • Compared to households without disabilities, households with disabilities were much less likely to have a credit card (43 versus 73 percent), store credit (28 percent versus 44 percent), an auto loan (21 versus 40 percent), a mortgage (23 percent versus 42 percent), a student loan (11 versus 22 percent) or a bank personal loan (six percent versus eight percent). In fact, 40 percent of households with disabilities had no mainstream credit, compared to only 15 percent of those without a disability.
  • Households with a disability are less likely to apply for a credit card or bank person loan (11 versus 17 percent) and, among those who applied, 33 percent of households with a disability were denied, compared to 19 percent of those without a disability.
  • National Disability Institute will be analyzing the FDIC data further and will release a comprehensive report in the Spring of 2019.

    More information: Learn about ABLE accounts for people with disabilities

    Link: Go to website for News Source
    https://www.realeconomicimpact.org/newsletters/wash_insider_oct_2018.html#1


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