Nothing Wrong with Being Underbanked

By Dian Vujovich

I received a call the other day from a friend who was almost in shock at the number of people in the U.S. who didn’t have bank accounts. Recent figures show that to be something like 60 million of us.

“Good for them,” was my response to her.

From all that I’ve seen, banks don’t much care about people. What they care about is the business of banking. You know, gathering assets and selling you on the notion that anyone without a bank account is doomed. A loser. It’s sort of like insurance companies that have used the “God forbid” sales pitch. As in, “God forbid you should die…” as if that were going to happen tomorrow. But that’s a blog for another day.

Today, it’s banks and the unbanked or underbanked. That’s what folks are called who either don’t have a bank account or don’t use enough of the banking industry’s services. A recent study showed that most of those un-folks are minorities and/or those with incomes of less than $30,000. I’d add the rich to that list too. Often they have enough money to pay for things with cash and hence not need a bank’s services for much.

But banks being banks want your money. Heck, everybody’s money. And the fear sales tactic that Mother bank and FDIC have in the hopper now is one of compassion: That the un- and underbanked are subject to using only places like payday loan services or loan sharks to handle their financial concerns and what a shame that is.

Poppycock.

Pay your bills using a Money Order and it could cost less than having a bank account. Plus, comes with anonymity. A bank account doesn’t.

If banks were such great places to do business they would reward you for doing so. Not impose charges every time you wanted to withdraw your own money from an ATM machine that’s not one of there’s, add fines when overdrawing your checking account or for keeping less than x amount of dollars in it. Worse yet, charge credit card interest rates of 10, 15, or 25 times that of what they are offering customers on their savings accounts.

Try to get a loan today without sterling credit and odds are it won’t happen. Walk in with say $50,000 in cash looking for a mortgage double that amount without any past credit history and you won’t get it. When it comes to doing mortgage and loan business with a bank, without a credit history you’re history.

Banks certainly do serve a purpose in our society—and a necessary one. But are their services for everyone? Nope. Will you die because you don’t have a checking or savings account? Nope. Is it okay to be unbanked or underbanked? Absolutely.