Roughly 8.8% of households in metro
They don't have bank accounts. And it's costing them big money to cash checks and borrow money outside the traditional banking system.
Need to cash your stimulus check?
Call a local party store or check cashing store in metro
The bigger the check, the more money you're handing over if the fee is based on a percentage of the check's dollar amount.
Check cashing fees can be 6% or more in some local outlets. A
Consumers without bank accounts face ongoing costs
The problem doesn't disappear with what could be the final round of stimulus checks.
The objective is to drastically cut child poverty.
If someone doesn't have a bank account, though, they could be looking at check cashing fees. And paying sizable dollars to cash those checks defeats the purpose of that stimulus money, said
“These are public dollars that are supposed to go toward fighting the COVID recession and child poverty,” he said.
The percentage of unbanked consumers in the
Why are some avoiding banks?
The top reasons given for not having a bank account include not having enough money to meet minimum balance requirements, not trusting banks, bank account fees are too high, and bank account fees are too unpredictable.
The numbers of unbanked are expected to grow following the COVID-19 pandemic, given the rapid increase in the unemployment rate and the lingering loss of 8 million jobs across the country since the pandemic hit the
Millions of consumers — including people of color — aren't able to easily cash a check or visit an ATM because they're not customers of regular banks.
In a positive twist, some options have opened up for those trying to save money when cashing a stimulus check.
Kroger stores are offering free check cashing for government checks, including stimulus checks.
But even so, not having access to a bank account — where you might be able to pay bills online — when offices or stores are closed hurt consumers during pandemic protocols.
“Both COVID and the recession that immediately followed really did exacerbate the challenges of being unbanked for families,” Rothstein said.
“They were literally shut out of the economy and that was almost overnight.”
More: Banks look to new accounts to attract the unbanked as COVID-19 takes a toll
More: April brings virtual tips on student loans, housing, more
More: New rule helps those who lost jobs in 2020 qualify for key tax credits
A new campaign to #GetBanked
One reason to “Get Banked,” according to the
Financial inclusion is important to us which is why we’ve launched a new campaign to raise public awareness to encourage millions of unbanked families to #GetBanked. Learn more at https://t.co/rYkNMh4EKb! pic.twitter.com/3hdp4BNWLO
— FDIC Gov (@FDICgov)
In October, the
The Bank On accounts charge small fees or no fees, have low monthly maintenance fees and no overdraft fees.
A key feature for many financially challenged consumers is the fact that the Bank On accounts make it structurally impossible for you to overdraft and trigger those costly fees.
Overdraft fees can be
“There are a lot of people paying hundreds of dollars in fees,” Rothstein said.
PNC, others offer affordable options
PNC announced in late March that it now has two certified Bank On products to offer consumers — Foundation Checking and the PNC SmartAccess Prepaid Visa Card.
The goal is to provide banking options for customers who may not have had access to traditional checking or savings accounts.
Some consumers might not be eligible for a traditional banking account because they bounced too many checks in the past or they have too many unpaid bank fees.
Or some college-age consumers might want a product where they cannot overdraw from their checking accounts, Niederberger said.
In order for Foundation Checking to qualify for its Bank On certification, PNC reduced the monthly fee on that product from
“We call it a second-chance checking account,” Niederberger said.
The Foundation Checking account includes a money management course that that is available on mobile devices. The account also offers low-balance alerts.
“Our goal with SmartAccess and Foundation Checking is to help customers enter the banking system and to remain in it,” said
The SmartAccess Prepaid Visa Card allows direct deposits of your paycheck or government benefits but it does not include a checking account. The prepaid card includes a mobile app, access to online banking, low-balance alerts, no overdraft fees and no fees for cashier’s checks. Fee-free cash withdrawals are allowed if the money is taken out at a PNC-operated ATM.
The SmartAccess card offers consumers a way to get their tax refund directly deposited onto that card, too.
SmartAccess also has a
While the SmartAccess card and Foundation Checking are available within most PNC markets, individuals should check with their local branch or servicing center for more information.
Understand what account works best for where you live, work
Consumers should research the online services and fees associated with the different Bank On products, as well as where ATMs are located, whether near their jobs or homes.
Again, many options exist at JoinBankon.org.
The First Independence First Choice account does not offer paper checks but instead enables customers to use free online banking, including features for making mobile deposits and paying bills. The account includes a
The checkless-checking account has a free debit card and offers free online banking services. Customers would pay a
Online and mobile access are provided so customers can check balances, view transactions, pay bills and transfer funds between Flagstar accounts. You cannot take a photo of a check to deposit it into this type of account, which is the case with many types of second chance accounts.
Deposits can be made in a branch, at an ATM, and via direct deposit.
“SimplyOne is available to anyone. However, it was designed for people who may have had trouble qualifying for, or managing, a standard checking account,” said
“If someone applies for a checking account and doesn’t meet the meet the minimum qualifications for a standard account, and they have no record of fraudulent or forcibly closed accounts, we will offer them a SimplyOne account,” she said.
The Advantage SafeBalance account has a monthly fee of
“It is a very popular account for students and allows for sole ownership for clients 16 and older,” said
Advantage SafeBalance Banking, which was launched in 2014, has more than 2.5 million clients.
No minimum deposit or balance is required. Consumers can pay bills online, via the mobile apps and by using the debit card.
The Discover Bank Cashback Debit Checking Account is an online checking account with a debit card and it has no monthly fees.
Cashback Debit has no minimum balance requirement. In addition, the Discover card offers 1% cashback on up to
The applicant must be a
Consumers can sign up from anywhere digitally. The 60,000+ ATM network for no-fee transactions includes the Allpoint and MoneyPass networks.
Financial empowerment advocates note that without a bank account, paper checks need to be cashed in person and that can continue to be challenging for many during the pandemic.
The ability to avoid outrageous check cashing fees alone makes the idea of getting banked — and discovering the right, affordable account for you— all that more appealing.
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