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About one in eight Georgia households - 457,000 in all - lack bank accounts and instead rely on payday loans, check-cashing services and other costly alternatives to traditional banks, according to a survey released Wednesday by the Federal Deposit Insurance Corp.
The state’s 12 percent "unbanked" figure is higher than the national average of 8 percent, the survey found. In Georgia, 45 percent of Hispanic households and 22 percent of black households are without a traditional banking account.
Metro Atlanta had slightly better numbers than the state, with an overall unbanked rate of 9 percent.
Nationally, the number of "unbanked" Americans rose 1.3 million last year, according to the report, which did not break down the growth by state.
The report is part of an FDIC effort to bring the "unbanked" into the financial mainstream.
FDIC Chairman Sheila Bair said access to a bank account gives households "an important first step toward achieving financial security." Vulnerable families need the ability to save for emergencies and borrow on affordable terms, she said in a statement.
"By better understanding this group - who they are and their reasons for being unbanked or underbanked - we will be better positioned to help them take that first step," Bair said.
Households are considered "unbanked" if they report that no member has a checking or savings account.
"Underbanked" households have bank accounts but still rely on costly, lightly regulated services like payday loans, check-cashing services and pawn shops.
In Georgia, 32 percent of households are either unbanked or underbanked, including 55 percent of Hispanic households and 51 percent of black households.
The Census Bureau conducted the survey in January 2009 on behalf of the FDIC.
"This is giving us a picture that we’ve never seen before," said Barbara Ryan, the report’s lead writer.
Of Americans who became unbanked in 2008, more than 31 percent said they closed bank accounts because of overdraft fees, service charges or high minimum balance rules.
A slightly larger group, 34.1 percent, said they did not have enough money to need an account, the report says.
The survey also found:
- 54 percent of black households, 44.5 percent of American Indian/Alaskan households and 43.3 percent of Hispanic households have limited access to banking.
- Households in the South are more likely to be unbanked or underbanked.
- About 28 percent of households headed by unmarried people are underbanked. For households with married couples, the number is 15.4 percent.
The FDIC in February released the results of a survey that asked banks what they’re doing to improve access.
Reaching out to underbanked communities was a business priority for less than 18 percent of the 685 banks surveyed.
Only one in five had established new branches in low-income areas.
Paul Donsky
Source: The Atlanta Journal-Constitution December 2009
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