''Bank Fees Are a Credit Union's Best Friend''
"Something is wrong when keeping cash in the kitchen cookie jar seems a reasonable substitute for your bank.''
More info"The alternative financial services (AFS) industry has attracted a lot of attention lately. Virtually nonexistent in this country 20 years ago, it has grown into a $100 billion business. Since the mid-1990s, the number of payday lenders nationwide has grown over 10 percent annually.
There's another reason why payday lenders, check-cashing outlets and other types of AFS businesses—also called “fringe banking”—have come under scrutiny: a perception that they're primarily used by people who lack physical access to traditional financial services such as banks and credit unions. Otherwise, why would anyone pay the relatively high fees charged for these services?
A study published in January 2008 by the Brookings Institution, a public policy think tank based in Washington, D.C., examined this notion that AFS exploits the geographically unfortunate. Brookings researchers looked at tract data from the U.S. Census Bureau to compare the locations of AFS providers with those of banks and credit unions. Their findings undermined the idea that AFS customers lack neighborhood access to standard banking services. Over 90 percent of AFS providers are located less than a mile from a bank or credit union branch, for example.
"It's not the case that nonbank financial service firms are filling in a geographic vacuum created from the absence of banks or credit unions," said Matt Fellowes, a researcher now with Pew Charitable Trusts who co-wrote the Brookings study."
- Date added:
- Sep 1, 2008
- Project:
- Safe Banking Opportunities Project
Related Resources
Fees and the Unbanked
The Pew Health Group’s Safe Checking in the Electronic Age Project investigated checking accounts offered by the ten largest U.S. banks, which held nearly 60 percent of the nation’s deposit volume.
View an interactive graphic presenting a state-by-state overview of Underbanked or Unbanked households.
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"'Hidden or unexpected' fees are the No. 1 reason given by the working poor for closing bank accounts, a recent study found. The study by the Safe Banking Opportunities Project, a project of the Pew Health Group, surveyed 2,000 predominantly low-income, Hispanic households in the Los Angeles area in a two-phase study. Study participants were screened and recruited through a door-to-door, interviewer-administered survey."
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Los "cargos ocultos o inesperados" fueron mencionados como la razón principal por la cual los trabajadores pobres del Gran Los Ángeles, aquellos que tienen empleo pero que incluso así permanecen en pobreza relativa, cerraron cuentas de banco el pasado año, por encima de razones como la pérdida del empleo o la falta de dinero, según una encuesta en hogares predominantemente hispanos y de bajos ingresos dada a conocer por el Safe Banking Opportunities Project (Proyecto Oportunidades para Banca Segura) del Pew Health Group.
More infoHidden or Unexpected Fees Cited as Top Reason Working Poor Close Bank Accounts
“Hidden or unexpected fees” were cited as the number one reason Greater Los Angeles’ working poor – those who are employed yet remain in relative poverty– closed bank accounts in the past year, surpassing job loss or lack of money, according to a survey of predominately Hispanic, low-income households released by the Pew Health Group’s Safe Banking Opportunities Project.
Slipping Behind
"Hidden or unexpected fees” were cited as the number one reason Greater Los Angeles’ working poor, those who are employed yet remain in relative poverty, closed bank accounts in the past year, surpassing job loss or lack of money, according to a survey of predominately Hispanic, low-income households.
More infoRegulatory Comment: Defining Larger Participants in Certain Consumer Financial Products and Services Markets
This regulatory comment discusses the Consumer Financial Protection Bureau (CFPB) proposed rule on defining larger participants in certain markets related to related to consumer financial products and services. Based on work at the Pew Health Group by the Safe Small Dollar Loans Research Project and The Safe Checking in the Electronic Age Project on small dollar loans and checking accounts, we urge the CFPB to issue an initial rule broadly covering nondepository markets. The rule should permit comprehensive supervision by the CFPB. The CFPB's supervisory authority must be broader than its rulemaking authority because examination of the market informs rulemaking needs. More info''Consumers Hold High Hopes for New Bureau''
''If you've ever thought someone was playing fast and lose with the rules on your credit cards, credit score or mortgage, but you had no idea where to go with your complaint, you now have a place to turn.''
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Half of low-income families in Greater Los Angeles turn to costly and unregulated alternative financial services (AFS) rather than banks to meet their monetary needs, according to a new survey released today by the Pew Health Group’s Safe Banking Opportunities Project.
More info''Report Measures Financial Habits of Low-Income Families''
"Half of low-income families in Greater Los Angeles turn to costly and unregulated alternative financial services (AFS) rather than banks to meet their monetary needs, according to a new survey released today by the Pew Health Group’s Safe Banking Opportunities Project"
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This study compares banked and unbanked families across several categories including financial behavior, economic status and perceptions of the financial service industry.
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