25.6% of U.S. households have limited or no access to conventional banking, FDIC survey reveals

More than a quarter of American households, and nearly the same percentage of households in the Los Angeles-Orange County area, have limited or no access to conventional banking services, according to a first-time federal survey released today.

The 25.6% of households that are either unbanked or under-banked disproportionally feature low-income and minority families, including more than half of black households, according to the Federal Deposit Insurance Corp. survey.

The Census Bureau, on behalf of the FDIC, conducted the first-of-its-kind survey in January to cover data at the national, regional, state and metropolitan levels.

Nationally, 7.7% of households were unbanked, meaning that the 17 million adults included in the 9 million households currently had no checking or savings accounts.

Still more had those accounts, but relied on other non-bank services such as money orders, check cashing, payday loans or pawn shops. About 17.9%, or 21 million households, were in that under-banked category.

Nearly 22% of black households were unbanked, as well as 19.3% of Latino households and 15.6% of Native American households. Just 3.5% of Asians and 3.3% of whites did not use banking services.

Similarly, just 7.2% of Asians and 14.9% of whites were under-banked, while 31.6% of blacks, 28.9% of Native Americans and 24% of Latinos fell into that category.

At least 71% of households without a bank account had an annual income under $30,000, comprising about a fifth of those in that income bracket. But only 4.2% of households earning $30,000 to $50,000, and less than 1% of households making $75,000 or more, don’t use conventional banking services.

Last year, 1.3 million U.S. households stopped using bank accounts, with more than 31% blaming high minimum balance limits, overdraft fees and service charges. About 34% of the total said they did not have enough funds to justify an account.

In the Los Angeles-Orange County area, 9.2% of households were unbanked and 14.4% were under-banked, according to the survey.

Of the 406,000 unbanked households in the region, 23.3% of households were making $30,000 or less, and 18.4% were Latino and 17.8% were black.

An additional 637,000 households were under-banked. Of those, 19.6% of households have an annual income of $30,000 or less, and 32.3% are black and 21.2% are Latino.

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