Underbanked Households

Definition

Percentage of households that have a checking and/or a savings account and have used non-bank money orders, non-bank check cashing services, non-bank remittances, payday loans, rent-to-own services, pawn shops, or refund anticipation loans (RALs) in the past 12 months, 2011.

Description

This measure describes the percentage of households that have a mainstream account but use alternative and often costly financial services for basic transaction and credit needs. Approximately 79% of underbanked households use non-bank money orders, while 31% use check cashing services, meaning they spend a significant amount on services for which most Americans pay little to nothing. Underbanked households are also more prone to loss or theft and face challenges in building credit and achieving financial security compared to banked households. Overall, use of alternative financial services has become more prevalent since 2009, with larger proportions of households of different ages, education levels, race/ethnicity and family type all reporting greater use of alternative financial services. When combined with the rate of unbanked households, this measure can paint a broad picture of which states have more households that are financially underserved.

For more information on the underbanked, see the Center for Financial Services Innovation, FDIC's economicinclusion.gov and joinbankon.org, where you can also find estimates of the underbanked at the local level.

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Underbanked Households

State	Percent of Underbanked Households (%)	Rank
United States	20.1%
Alabama	28.8%	50
Alaska	20.2%	30
Arizona	20.5%	31
Arkansas	28.1%	49
California	18.0%	16
Colorado	16.1%	8
Connecticut	15.2%	6
Delaware	15.5%	7
District of Columbia	22.3%	42
Florida	21.1%	35
Georgia	26.8%	46
Hawaii	20.0%	29
Idaho	19.0%	20
Illinois	17.7%	13
Indiana	19.1%	22
Iowa	17.2%	10
Kansas	19.7%	28
Kentucky	21.5%	38
Louisiana	27.2%	47
Maine	19.0%	20
Maryland	21.2%	37
Massachusetts	14.1%	3
Michigan	17.3%	11
Minnesota	12.6%	2
Mississippi	23.6%	44
Missouri	20.6%	32
Montana	22.0%	40
Nebraska	17.8%	14
Nevada	31.2%	51
New Hampshire	12.5%	1
New Jersey	19.4%	25
New Mexico	23.6%	44
New York	19.4%	25
North Carolina	21.7%	39
North Dakota	18.0%	16
Ohio	19.3%	24
Oklahoma	23.2%	43
Oregon	14.4%	5
Pennsylvania	18.0%	16
Rhode Island	17.8%	14
South Carolina	20.6%	32
South Dakota	22.0%	40
Tennessee	18.1%	19
Texas	27.2%	47
Utah	21.0%	34
Vermont	17.4%	12
Virginia	16.7%	9
Washington	19.4%	25
West Virginia	19.2%	23
Wisconsin	14.2%	4
Wyoming	21.1%	35

Source

2011 FDIC National Survey of Unbanked and Underbanked Households. Washington, DC: Federal Deposit Insurance Corporation, 2012.