National Survey says one in four households don't have bank accounts, local numbers even higher

The Federal Deposit Insurance Corporation (FDIC) has released findings of a national survey on what it calls "unbanked" and "underbanked" households. According to the FDIC website, the survey was conducted on its behalf by the U.S. Bureau of the Census and is the most comprehensive of its kind to date. It says that more than one quarter (25.6 percent) of all households in the United States are unbanked or underbanked and that those households are disproportionately low-income and/or minority.

"Access to an account at a federally insured institution provides households with an important first step toward achieving financial security - the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, and access credit on affordable terms," stated Sheila Bair, Chairman of the FDIC. "By better understanding the households that make up this group - who they are and their reasons for being unbanked or underbanked, we will be better positioned to help them take that first step."

The FDIC says of the households surveyed, 7.7 percent were unbanked, which translates nationally to 9 million households - or approximately 17 million adults. An additional 17.9 percent - or 21 million households nationally (approximately 43 million adults) - were found to be underbanked.

In Georgia, nearly 32 percent of households indicated they had no bank accounts or that they did not use their banks accounts. In South Carolina, almost 35 percent of households said they had no bank accounts or were underbanked.

All of this comes as no surprise to many in the city of Savannah, who have been working on a project for some time to get more low-income to open bank accounts. Called "Bank On Savannah", the project was officially announced in April, after several years of behind the scenes work from a local task force made up of citizens, advocacy groups and bankers. The local project offers education and support to those who need to open bank accounts. Locally, up to 30 banks credit unions are participating in the project.

So far, about 400 people have signed up for Bank On Savannah accounts at the participating institutions. "We show people that they can save money by not going to check cashers," says Robert James, president of Carver State Bank, one of the participating organizations.

Savannah Mayor Otis Johnson is a big proponent of the program which includes education on how to handle money and finances. "When citiznes can be more ecomically self-sufficient, then they can help their families and most of these people have children," Johnson says.

The mayor also told us that he understands some people simply haven't used bank accounts because their families have not used them and perhaps even have misgivings about banks and whether a small depositer is necessarily welcome. "So, we've got to work against long ingrained family practices as well as the fact that some of these people have not been that welcome in certain types of banks."

The Bank on Savannah program offers free checking accounts and new customers can have a minimal amount in their accounts. And at first, overdraft fees will be forgiving. Daniel Dodd, who runs the Step Up Savannah Poverty Iniatiative says the focus is to get people to understand how bank accounts work and to feel comfortable using them. "We've figure that the average person may pay between $800 and $1,200 locally to check cashers each year just to cash paychecks," he says. "Even if someone had four overdrafts a year (at $35 apiece), they would spend a lot less."

Dodd says the program also includes a concentrated financial education program which has been coordinated through Consumer Credit Counseling.

For more information call the hotline number 2-1-1.