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'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for July 2015
Universal:
That political responsibility may be lived at all levels as a high form of charity.
Evangelization: That, amid social inequalities, Latin American Christians may bear witness to love for the poor and contribute to a more fraternal society.



Comments


More Business & Economics

U.S. hit with price hikes: Apartment rent, restaurant meals and haircut prices are up Watch

Image of Starbucks has increased the price of their coffee from around 5 cents to 20 cents per cup.

By Linky C. (NEWS CONSORTIUM)

Prices of restaurant meals, gym memberships, haircuts and even a cup of coffee are rising in America, as well as apartment rent. American consumers are beginning to feel the financial burden, as the inflation rates in the U.S. start to kick in. MUNTINLUPA, PHILIPPINES ... continue reading


Big name companies demand Planned Parenthood to remove names off list of corporate donors Watch

Image of

By Nikky Andres (NEWS CONSORTIUM)

Representatives from Coca-Cola, Ford Motor Co. and Xerox openly state they've requested Planned Parenthood to take their company's names out as corporate donors to the controversial organization. MUNTINLUPA, PHILIPPINES (Catholic Online) - Planned Parenthood is now ... continue reading


Gun sales in the United States dramatically boost after massacre shootings Watch

Image of

By Atarah Haely (NEWS CONSORTIUM)

FBI's latest background check data shows the gun industry spiked in sales at about 11 percent last June. There are about 1.53 million background checks done, making it the busiest June ever since the agency started keeping track in 1999, according to CNN. The massive ... continue reading


Microsoft slammed for thousands of layoffs while demanding increase in immigration Watch

Image of

By Atarah Haely (NEWS CONSORTIUM)

About 7,800 Microsoft employees are in line to be fired, according to a company announcement last Wednesday. Most workers are from the seemingly failing mobile phone business, while Microsfot is said to fire a majority of Nokia's remaining employees ever since ... continue reading


Subway and Jared break up after controversial police raid at spokesman's home Watch

Image of Jared Fogle is known for his massive weight loss on a

By Nikky Andres (NEWS CONSORTIUM)

Subway spokesman, Jared Fogle's house was raided by FBI agents and Indiana State Police, two months after the former executive director of Fogle's foundation was arrested with charges of child pornography. MUNTINLUPA, PHILIPPINES (Catholic Online) - In their statement, ... continue reading


'Enough with all the rules' firework industry calls out to Obama Watch

Image of

By Nikky Andres (NEWS CONSORTIUM)

This year, more states have allowed people to buy pyrotechnic materials, such as sparklers and Roman Candles. In fact, this year has been wonderful for fireworks manufacturers, since the projected 2015 sales of celebratory explosives are estimated to top $1 billion. ... continue reading


Whole Foods accused of greatly overcharging customers Watch

Image of

By Nikky Andres (NEWS CONSORTIUM)

Whole Foods, the American foods supermarket chain that specializes in organic goods, has been accused of massive overcharging. The New York City Department of Consumer Affairs explained they have discovered "systematic overcharging for pre-packaged foods" at the city's ... continue reading


Strange and powerful 'boat swallowing' vortex appears in Lake Texoma Watch

Image of

By Nikky Andres (NEWS CONSORTIUM)

A strange, giant vortex, estimated to be around 8-feet in diameter, has appeared in Lake Texoma. This occurrence is surprising and perhaps threatening. However, there is an explanation. MUNTUNLUPA, PHILIPPINES (Catholic Online) - Lake Texoma is known as one of the ... continue reading


Is it time to stash money under mattress? 'It's time to hold physical cash,' fund manager says Watch

Image of Ian Spreadbury declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10.

By Catholic Online (NEWS CONSORTIUM)

Is it time to cash your paycheck and then stick it into a hatbox for a rainy day? According to British fund manager Ian Spreadbury, who invests more than £4 billion of investors' money is gravely concerned that a "systemic event" could rock markets. The upset ... continue reading


In spite of strong showing, Ron Paul predicts Apocalypse on Wall Street Watch

Image of Ron Paul has predicted economic doomsday previously. As stocks continue to make new highs, he remains just as convicted as ever that there

By Catholic Online (NEWS CONSORTIUM)

Things seem to be on an even keel right now but according to former Representative Ron Paul, the Federal Reserve's easy money policies have left stocks and bonds are on the verge of a massive collapse. LOS ANGELES, CA (Catholic Online) - "I am utterly amazed at ... 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, Numbers 13:1-2, 25--14:1, 26-29, 34-35
1 Yahweh spoke to Moses and said,2 'Send ... Read More

Psalm, Psalms 106:6-7, 13-14, 21-22, 23
6 Like our ancestors, we have sinned, we have acted ... Read More

Gospel, Matthew 15:21-28
21 Jesus left that place and withdrew to the region ... Read More

Saint of the Day

Saint of the Day for August 5th, 2015 Image

St. Addal
August 5: A disciple of Christ sent by St. Thomas to the court of King ... 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