In 2017, the proportion of Americans without a bank account reached a historic low as more people joined the traditional financial system due to the growth of online-only banks and an improving economy.
According to a new Federal Deposit Insurance Corp. analysis released on Tuesday, 5.9 million homes, or 4.5% of Americans, would not have a bank account by the year 2021.
It has decreased from 5.4% of Americans in the 2019 survey data to the lowest percentage since the FDIC began keeping track of the data in 2009.
The coronavirus pandemic may partly be responsible for the drop in unbanked families.
After COVID-19 shut down the American economy in March 2020, states and the federal government gave Americans trillions of dollars in stimulus.
Most benefit programs require a bank account to swiftly transfer payments to affected parties.
FDIC Acting Chairman Martin J. Gruenberg stated, “during the epidemic, people opened bank accounts to obtain relief cash and other advantages quickly and securely.”
However, the FDIC claimed that the improved economy in 2021—when the coronavirus pandemic limitations essentially ended and unemployment was low—was primarily responsible for the improvement.
Despite improvements, Black and Hispanic households are far more likely than others to lack a bank account.
Approximately 11.3% of Black households do not have a bank account, a decrease from 13.8% two years ago.
In families with Hispanic residents, that percentage dropped from 12.2% to 9.3%.
The main factors determining whether someone chooses to be unbanked remained constant from earlier studies.
Being unbanked still poses a problem for economic inclusion because one in five unbanked households cited a lack of funds as the primary barrier to opening an account.