Published Nov. 7, 2012
Overall, the FDIC study found that 166,000 households in the state were unbanked, that is, households did not have either a checking or savings account with a bank or credit union.
Meanwhile, the FDIC study said that 369,000, or 20.6%, of S.C. households were underbanked in 2011 compared with 24.3% in the 2009 survey.
Underbanked households, according to the Federal Reserve, have checking or savings accounts but do not use banks to cash checks, buy money orders, pay bills or borrow money.
Financial literacy programs sponsored by the S.C. Bankers Association may have made a dent in the number of unbanked or underbanked households, said Fred L. Green III, president and CEO of the Columbia-headquartered organization.
In 2011, South Carolina bankers spoke to more than 45,000 individuals about financial literacy, Green said, adding “when you consider how many people we’ve reached over the years, you can’t help but think about the impact.”
In some cases, bankers talked to people who were unaware of various financial services that were available to them, Green said.
A Federal Reserve report found that many unbanked or underbanked households have limited or unstable incomes and live paycheck to paycheck.
These households need immediate access to money and see little value of putting it in a bank, the report said. Other barriers include some banks’ requirements for minimum deposits and limit on funds availability.
Also, some people say they don’t have bank accounts because negative experiences such as high fees, the report added.
Nationwide, 8.2% of U.S. households were listed as unbanked in 2011 by the FDIC, up from 7.6% in 2009. Also, 20.4% of U.S. households were underbanked in 2011, up from 18.2% in 2009.
The South as a region saw its unbanked households increase to 10% in 2011 from 9.4% in 2009, and underbanked households increase to 23.2% from 20.8%.