WASHINGTON — A new report from the Federal Deposit Insurance Corp. found that a record-low number of people didn't have bank accounts, buoyed at least in part by economic stimulus checks during the COVID-19 pandemic.
The FDIC, in a survey conducted in 2021 and released on Tuesday, found that 4.5% of Americans didn't have a bank account in 2021, the lowest level since the FDIC began its biennial survey in 2009. That's down from 5.4% of Americans that didn't have a bank account in the 2019 survey.
Government programs designed to offset some of the negative economic effects of the COVID-19 pandemic prompted some previously unbanked consumers to open bank accounts, the FDIC said. Among the "recently banked," 45% said that receiving a stimulus payment contributed to their opening a bank account.
"During the pandemic, consumers opened bank accounts to access relief funds and other benefits quickly and securely," acting FDIC Chairman Martin Gruenberg said in a statement.
A strong job market also contributed: About a third of recently banked households that started a new job said that it contributed to their decision to open a bank account.
Minority consumers continued to be unbanked at a higher rate than white ones. In the most recent survey, 2.1% of white households were unbanked, compared with 11.3% of Black households and 9.3% of Hispanic households. Those numbers are down slightly compared to 2019, when 2.5% of white households were unbanked compared to 13.8% and 12.2% of Black and Hispanic households, respectively.
This most recent iteration of the FDIC's survey
But the topic is of increasing interest to policymakers, given the high rate of overlap between the underbanked and crypto users.
The FDIC said that an additional 14.1% of households were underbanked in 2021, and the report noted that banked households' use of "key nonbank financial products and services" dropped by about one-third between 2017 and 2021. In 2021, 9.3% of white households were underbanked, while 24.7% of Black households and 24.1% of Hispanic households reported the same.
Not having enough money to meet a minimum balance topped the list for the main reason for not having a bank account, while not trusting banks was the second most-cited main reason.
More consumers are using nonbank online payment services, including PayPal, Venmo and CashApp, with nearly half of all households using a nonbank online payment service in 2021, including two-thirds of households younger than 35.
"Banked households appear to be using nonbank online payment services in conjunction with banking products by linking them to credit cards or bank accounts, while unbanked households are frequently using these services in place of a bank account," Gruenberg said.
