Anneisha Williams figures she has paid several hundred dollars in overdraft fees over the years, so when her last bank recently refused to refund about $500 a hacker stole from her checking account, Williams decided she was done with banks.
Another 18% have bank accounts but end up using higher-fee financial services, such as payday lenders or check-cashing businesses. They are considered the “underbanked,” according to banking experts.say. Many are low-income and minorities who pay high fees to access their cash. California has one of the highest concentrations of unbanked families in the nation, according to the Federal Reserve. Workers earning less than $15 per hour make up 81% of unbanked individuals in the state,The Federal Deposit Insurance Corp., which regulates banks, says to be unbanked means no one in a household has a checking or savings account at a traditional bank or credit union.
One reason: low-income consumers are often burdened by bank fees that others with higher balances don’t have to pay. Black households are almost 2 times more likely to pay overdraft fees than white households, and Latino households are 1.4 times more likely, says a study by theIn 2021, 11% of U.S.
“That $12 is important,’ said Julia, who did not disclose her last name because she fears deportation as an undocumented immigrant. “For a poor person, every single dollar is important. We have to pay for lights, gas, trash service, and buy food. You have to work two or three jobs just to get by.”