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The FDIC estimates that 10 million U.S. adults are completely cut off from the banking system.  Millions more, often referred to as the "underbanked," have a very limited relationship. Their ranks are growing as many more people become "formerly banked."

The FDIC reports:

FDIC Survey of the Unbanked 2013

FDIC Survey of the Unbanked 2011

FDIC Survey of the Unbanked 2009

Access to the banking system is important. It empowers people to develop assets. In today's economy, a consumer needs to have developed a financial identity in order to qualify for a credit account. In some instances, a lack of a credit profile can even prevent someone from getting a job. 

Products for the underbanked and unbanked include:

  • check cashing
  • refund anticipation loans and refund anticipation checks
  • prepaid debit cards
  • Buy Here Pay Here automobile loans
  • remittances
  • payday loans, as well as other higher-cost installment loans
  • auto title loans
  • certain credit insurance products tied to consumer installment loans

Most of these can come with some harmful features. Payday loans, for example, bear interest rates of as high as 600 percent. A number of these loan products tap the ACH system and there have been cases where payment processors were illegally debit those accounts. Most cost more than services aimed at prime consumers. 

Reinvestment Partners, the non-profit that manages BankTalk, has developed a solution for unbanked workers. At WiseWage, all workers qualify for an account. Our aim is to help unbanked workers become banked! By doing so, they can avoid the cost of using a check casher. They will establish a financial profile, and at some point, they may gain the opportunity to use prime banking products.