A Quarter of US Households Remain Outside the Banking System

Survey results released by the Federal Deposit Insurance Corporation (FDIC) revealed that twenty-five percent of US households, including large percentage of low-income and minority households, are outside of the banking system. The survey, FDIC National Survey of Unbanked and Underbanked Households, was conducted on behalf of the FDIC by the U.S. Bureau of the Census as a supplement to the Census Bureau's Current Population Survey during January 2009.

In addition to collecting accurate estimates of the number of unbanked and underbanked households in the U.S., the survey was designed to provide insights into their demographic characteristics and reasons why the households are unbanked and/or underbanked. The survey represents the first time that this data has been collected to produce estimates at the national, regional, state and large metropolitan statistical area (MSA) levels.

Key findings of the study include:

1. The proportion of U.S. households that are unbanked varies considerably across racial and ethnic groups with certain racial and ethnic groups being more likely to be unbanked than the population as a whole. Minorities more likely to be unbanked include blacks (21.7 percent of black households), Hispanics (19.3 percent), and American Indian/Alaskans (15.6 percent). Racial groups less likely to be unbanked are Asians (3.5 percent) and whites (3.3 percent).

2. Certain racial and ethnic minorities are more likely to be underbanked than the population as a whole. Minorities more likely to be underbanked include blacks (an estimated 31.6 percent), American Indian/Alaskans (28.9 percent), and Hispanics (24.0 percent). Asians and whites are less likely to be underbanked (7.2 percent and 14.9 percent, respectively).

3. Households with income under $30,000 account for at least 71 percent of unbanked households. As income increases, the share of households that are unbanked declines considerably. Nationally, nearly 20 percent of lower-income U.S. households - almost 7 million households earning below $30,000 per year - do not currently have a bank account. In contrast, only 4.2 percent of households with annual income between $30,000 and $50,000 and less than 1 percent of households with yearly income of $75,000 or higher are unbanked.

4. Households with an annual income between $30,000 and $50,000 are almost as likely as lower-income households to be underbanked.

This survey complements an earlier FDIC Survey on Banks' Efforts to Serve the Unbanked and Underbanked, published in February 2009, which found that most banks are aware that there are opportunities to serve unbanked and underbanked individuals in their areas, but that more can be done.

Mayors Increase Effort to Deny Guns to Terrorists

A bipartisan coalition of mayors is increasing their efforts to deny terrorists from purchasing guns. In November, the Mayors Against Illegal Guns purchased an ad in The Washington Post calling on Congress to make two changes to federal law and policy.

First, the group wants to ensure the information uncovered during background checks will allow the FBI to deny suspected terrorist from purchasing guns. Currently, the FBI does not have the authority to deny any one on the “no fly list” from purchasing guns. The ‘no fly list”, also referred to as the terrorist watch list, prohibits suspected terrorists from flying to or from the United States. By closing the “terror gap” as it is called by the mayors, the FBI will be able to ensure individuals “too dangerous to fly” (in the words of New York City Mayor Michael Bloomberg) do not purchase guns.

Second, the group would like the Tiahrt Amendment repealed. Named after its author Rep. Todd Tiahrt (R-KN), the amendment requires the FBI to destroy information obtained during a background within 24 hours unless it must be turned over to a law enforcement agency or prosecutor in connection with a criminal investigation. The mayors believe maintaining this information for 90 days will allow the FBI to ascertain if a suspected terrorist is seeking to purchase guns or explosives.

The mayors maintain providing the FBI with this authority may have prevented the shooting at Ft. Hood. The FBI had the alleged assailant, Major Nidal Malik Hasan under surveillance and was monitoring his communications with suspected terrorist groups.

The Mayors Against Illegal Guns is dedicated to making America's cities safer by cracking down on illegal guns. Since launching in 2006, the coalition's bipartisan ranks have grown to more than 500 mayors from more than 40 states, and the statement of principles has been endorsed by major national organizations such as the US Conference of Mayors and the National Conference of Black Mayors.

Black Caucus Wants More Done About Jobs in Their Community

The Congressional Black Caucus is demanding the Obama administration focuses greater attention to the economic plight of the black community claiming the bailout and stimulus money has not adequately addressed the concerns of their constituents.

The caucus is threatening to vote against financial regulatory legislation scheduled for a floor vote December 9. The caucus wants greater attention paid to members of the black community in danger of losing theirs homes in addition to ensuring there is an expansion of government lending to the black community and there is greater access of federal funds to minority-owned banks.

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