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Business

Blacks without banks count on check cashing alternatives

by Alex Presha | December 23, 2009 at 10:06 AM
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According to a recent FDIC study, nearly one third of African-Americans use financial services like check cashing places in addition to their banks.

But one in five black households don’t have a bank account at all, the study found. That percentage is seven times higher than white households. Still, members of the American Banker’s Association insist federally insured banks are the safest place for your money.

National Urban League President Marc Morial said, “People use banks when they think the bank is doing something they need.”

“What was new about the FDIC report is they added the underbanked [population],” said Lawrence White, a professor at the NYU Stern School of Business. “So you have households that don’t use banks at all and then households that have a bank account, but use pay day lenders for a significant fraction of their financial services.”

Banks now offer a series of programs target development in minority communities and ensure that minorities have a seat at the table when it comes to personal finance. Despite these efforts, the unbanked and underbanked numbers are still to high, advocates say.

For many, check cashing places are one-stop-shops. You can get a check cashed, wire money and pay bills all at once. It is services like these that make minority advocates believe banks need to offer more.

Do you ever use a check cashing store? Click here to take our poll-.

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Filed in: Business, Money, Top Stories, Video | Related Topics: Bank, Cash, FDIC, Study
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