Skip to content
Catholic Online Logo

By Catholic Online (NEWS CONSORTIUM)

9/14/2012 (2 years ago)

Catholic Online (www.catholic.org)

Check cashers, payday lenders finding new popularity with cash-strapped public

After three years of very rough financial waters, more and more Americans are learning to live without banks. Roughly 17 million Americans today have no saving or checking accounts, and many rely on check cashers and payday lenders to manage their finances. The question remains . why?

In another sign of an uncertain economy, another 51 million adults, who do have bank accounts, use pawnshops, payday lenders or rent-to-own services.

In another sign of an uncertain economy, another 51 million adults, who do have bank accounts, use pawnshops, payday lenders or rent-to-own services.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

9/14/2012 (2 years ago)

Published in Business & Economics

Keywords: Banks, rent to own, check cashers, lenders, unbanked population


LOS ANGELES, CA (Catholic Online) - In a report from the Federal Deposit Insurance Corp., these Americans are far more vulnerable to high fees and interest rates. They also find themselves cut off from credit to buy a car or a home or pay for college.
 
In another sign of an uncertain economy, another 51 million adults, who do have bank accounts, use pawnshops, payday lenders or rent-to-own services.

The study also found that 821,000 households opted out of the banking system from 2009 to 2011 and that the so-called unbanked population grew to a substantial 8.2 percent. This "under-banked" population has grown from 18.2 percent to 20.1 percent of households nationwide.

Of one in four U.S. households, or 28.3 percent, either had one or no bank account. A third of these households said they do not have enough money to open and fund an account. The report also found that minorities, the unemployed, young people and lower-income households are least likely to have accounts.

The jobless rate has placed millions of Americans in precarious financial positions, unable to absorb overdraft charges or minimum-balance fees.

One of the reasons that more Americans have learned to distrust banks are rate hikes and hidden service fees.  In their defense, the banks say service charges are needed to offset the loss of revenue from a cap on debit-card transaction fees imposed by the government.

"Banks need to have pricing and practices that consumers can trust and allow them to build wealth and have economic mobility," Deborah Goldstein, chief operating officer at the Center for Responsible Lending says. "If the account fees will leave them worse off, then it's going to be a challenge for people to use banking services."

The banks also say it's very hard to make money serving lower-income communities because the cost of managing their accounts outweighs the return.

"There has to be a recognition that there are costs to providing accounts and those costs have to be covered," Nessa Feddis, vice president and general counsel at the American Bankers Association says. Feddis estimates that it costs banks up to $300 a year to maintain a checking account due to such expenses such as processing transactions.

National Community Reinvestment Coalition chief executive John Taylor warns that Americans are susceptible to abusive practices at non-bank institutions and are likely to remain trapped in a vicious cycle of financial strain.

Unbanked people need to kept away from "predatory lenders who keep them mired in debt," he said. "One of the reasons you had all of these mortgage companies preying on low-income communities is because there were no options."

.

---


Pope Francis: end world hunger through 'Prayer and Action'


© 2014 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for September 2014
Mentally disabled:
That the mentally disabled may receive the love and help they need for a dignified life.
Service to the poor: That Christians, inspired by the Word of God, may serve the poor and suffering.



Comments


More Business & Economics

Bottom of the Barrel - Thanks to business tax, the U.S. is Number 32 in the world Watch

Image of A competitive tax code is one that limits the taxation of businesses and investment. Since capital is mobile and businesses can choose where to invest, tax rates that are too high

By Catholic Online (NEWS CONSORTIUM)

A new international ranking shows that the U.S. tax burden on business is close to the worst in the industrialized world. So says the Wall Street Journal, the nation's leading journal on business. The White House and Sen. Charles Schumer (D., N.Y.) will attempt ... continue reading


Unemployment rate for black Americans at 11.4 percent, more than double the rate for whites Watch

Image of There remains a wide disparity in employment in the United States, in spite of efforts to close this broadening gap.

By Catholic Online - (NEWS CONSORTIUM)

There remains a wide disparity in employment in the United States, in spite of efforts to close this broadening gap. Figures show that while unemployment nationwide is 6.1 percent, the unemployment rate for black Americans at 11.4 percent. LOS ANGELES, CA ... continue reading


A record 92,269,000 Americans jobless for month of August Watch

Image of So - there you have it: Things are STILL tough all over.

By Catholic Online - (NEWS CONSORTIUM)

It never went away, come rain or come shine form the past hot summer months . Many Americans remain idle and without work. According to the Bureau of Labor Statistics, a record 92,269,000 Americans 16 years of age and older didn't participate in the labor force ... continue reading


We owe HOW MUCH? New report reveals U.S. government owes $6 trillion to foreign entities Watch

Image of Foreign interests, including nations and businesses, own more than $6 trillion of U.S. government debt.

By Catholic Online (NEWS CONSORTIUM)

Foreign interests now own more than $6 trillion in U.S. government debt, a recent Treasury Department report on major foreign debt holders revealed. LOS ANGELES, CA (Catholic Online) - As of the end of June 2014, foreign-held debt totaled $6,013,200,000,000 in U.S. ... continue reading


Are you ready? Economic analysts predict bear market by end of 2014 Watch

Image of Economic analysts are predicting a significant drop in the market, which may be as high as 60%.

By Catholic Online (NEWS CONSORTIUM)

Two financial experts announced on August 27 that markets may face a fall of up to 60% by the end of 2014. LOS ANGELES, CA (Catholic Online) - David Tice, the president of Tice Capital and founder of the Prudent Bear Fund, reported that a jolt to international ... continue reading


Oh really Obama? President claims economic success while population dependent on food stamps hit all time high Watch

Image of The number of Americans on food stamps has not decreased since 2011, despite claims from President Obama that the U.S. economy has recovered under his policies.

By Catholic Online (NEWS CONSORTIUM)

Democrats are facing a tough midterm election, and with less than three months to go the party is scrambling to prop up the image of the U.S. economy in the minds of disgruntled voters. LOS ANGELES, CA (Catholic Online) - Yet one of the quickest shorthand ... continue reading


Here comes a boom! $7 trillion in untapped funds to flood global market Watch

Image of A report suggests that corporations and equity firms hold nearly $7 trillion in cash reserves that could bolster the world's economy.

By Catholic Online (NEWS CONSORTIUM)

A new boost to the global economic recovery may happen soon, as corporate giants and private equity firms prepare to tap into cash reserves of $7 trillion, stored since the current financial crisis began back in 2008. LOS ANGELES, CA (Catholic Online) - Investors ... continue reading


OBAMA PARTIES AS ROME BURNS: U.S. wages down by 23 percent - while president takes a vacation Watch

Image of The timing of Obama's swank vacation has even the president's supporters worried.

By Catholic Online (NEWS CONSORTIUM)

Lots of negative news to go around - Ebola seems to be spreading worldwide, Islamic State is increasing its stranglehold on Iraq, a much beloved comedian and screen actor is found dead at home, an apparent suicide - U.S. President Barack Obama is in Martha's ... continue reading


Religious orders NEED to understand economics Watch

Image of A letter from two high-ranking Catholic officials requests that religious orders gain a better understanding of finance and economics.

By Catholic Online (NEWS CONSORTIUM)

In a letter addressed to members of religious communities, Vatican officials requested that these groups should not be ignorant of economic realities connected to community life and a mission of serving the world in the name of the Church. LOS ANGELES, CA ... continue reading


THANKS, BARACK! Federal debt up $7 TRILLION under your watch. Watch

Image of By the close of business on July 31, 2014, it had risen to $17,687,136,723,410.59, up $7,060,259,674,497.51 since Obama first inauguration day.

By Catholic Online (NEWS CONSORTIUM)

Thanks, Barack! The total federal debt of the U.S. government has increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president. That's more than the debt increased under all U.S. presidents from George ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, First Corinthians 15:12-20
12 Now if Christ is proclaimed as raised from the ... Read More

Psalm, Psalms 17:1, 6-7, 8, 15
1 [Prayer Of David] Listen, Yahweh, to an upright ... Read More

Gospel, Luke 8:1-3
1 Now it happened that after this he made his way ... Read More

Saint of the Day

Saint of the Day for September 19th, 2014 Image

St. Januarius
September 19: St. Januarius was born in Italy and was bishop of Benevento ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter