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Figures for Underbanked and Unbanked Minority House Holds were Shocking

Yesterday, the Federal Deposit Insurance Corporation (FDIC) released the results of a study undertaken to collect data on the number of unbanked and underbanked households in the United States. The FDIC found that roughly 25% of American households (30 million households and 60 million adults) are underbanked and unbanked. Congresswoman Yvette D. Clarke, a Member of the House Small Business Committee released the following statement in response to the study.

“There is very troubling data in this FDIC report,” Rep. Yvette Clarke said. “Close to 30 million Americans don’t have access to bank accounts. They often must resort to alternative financial services providers in order to access credit but often at a steep price. This historic study demonstrates the pressing need for responsible financial institutions in our most underserved areas.”

The study represents the first time such data has been collected on a national level. The study also found that minorities are disproportionately affected by the lack of access to financial products at banks. According to the report, 54% of black households and 43.3% of Hispanic households are either underbanked or unbanked. The study also found that these citizens most often turn to financial products provided by less regulated entities such as payday lenders, non-bank check cashers, and pawn shops.

“As the only Congressional Black Caucus Member on the Small Business Committee, I am very concerned that minority households are disproportionately underbanked and unbanked. Sustainable economic growth is inextricably linked to the ability of a community to access affordable financial products on a consistent basis and for minority communities, it is essential. Families and small businesses must be able to form lasting banking relationships. Our Government must do more to promote the creation and longevity of financial institutions,” stated Rep. Clarke.

“I think as a start, expansion of the Community Development Financial Institutions (CDFI) program should be on the table in order to begin addressing this serious economic challenge in our neighborhoods. We must also work closely with large banking institutions, smaller community banks, and credit unions to increase their presence in communities like mine in central Brooklyn. There is an urgent need and high demand for their services,” concluded Congresswoman Yvette D. Clarke.