Huge numbers of Americans opting out of banking system - and the media says that's bad!

Huge numbers of Americans opting out of banking system - and the media says that's bad!
(NaturalNews) Across the United States, more and more people are opting
out of the banking system, according to a report from the Federal Deposit Insurance Corp.

According
to the report, 821,000 households (approximately 17 million people)
were without a single bank account from 2009 to 2011. Those numbers
place the "un-banked population" at 8.2 percent of the U.S. population.

An
additional 51 million people told researchers that although they have a
bank account, they also make use of payday lenders, pawnshops,
rent-to-own services, money orders or other such alternative financial
services. This population, known as under-banked, has increased to 20.1
percent of U.S. households from the prior figure of 18.2 percent.
Overall, a full 28.3 percent of U.S. households have either zero or one
bank account for the whole household.

The report also found that a
full 25 percent of U.S. households used alternative financial services
in the past year. Among these households, 7.5 percent said they chose to
do so because of discomfort with or lack of trust in banks.

But
while some people may be voluntarily opting out, many others simply
cannot afford to have bank accounts or use other conventional financial
services. For example, 6.6 percent of households who used alternative
financial services said they did so because either poor credit or a lack
of identification kept them from opening a bank account. A third of
respondents who had one or no bank accounts per household said they
didn't have enough money to open or fund any additional accounts.

The unemployed, low-income households, ethnic minorities and young adults are least likely to have bank accounts.

Drowning in fees

It's
not just credit or minimum account balances that are keeping people
away from banks. In just the last year, three major banks have raised
checking account fees or overdraft charges. This is part of a widespread
trend among banks seeking to increase their income after the federal government imposed tough new regulations limiting fees on debit cards.

In addition, it may just be harder to find a bank in a low income neighborhood. An April report from SNL Financial found
that since 2007, banks have shifted their resources to areas with
median incomes above $100,000 per year, closing dozens of branches in
neighborhoods with median household incomes below $25,000.

Banks justify these practices by saying that it's hard to make a profit in low-income communities.

"There
has to be a recognition that there are costs to providing accounts and
those costs have to be covered," said Nessa Feddis of the American Bankers Association.

Feddis
suggested that banks could help lower-income individuals by moving into
the prepaid debit card market. The use of such cards has increased to
almost 18 percent of households, from 12 percent in 2009.

"There
are fewer ways to access the account, so there are fewer opportunities
for fraud, which banks pay a lot to protect against," Feddis said.

But consumer advocates insist that banks can be doing more.

"Banks
need to have pricing and practices that consumers can trust and allow
them to build wealth and have economic mobility," said Deborah Goldstein
if the Center for Responsible Lending. "If the account fees will leave them worse off, then its going to be a challenge for people to use banking services."

The
problem with relying on alternative financial services, consumer
advocates say, is that non-bank institutions charge higher interest
rates and may trick consumers with deceptive marketing.

"A part
of changing the condition of un-banked people is keeping them away from
predatory lenders who keep them mired in debt," said John Taylor, of the
National Community Reinvestment Coalition.

Source:-
http://www.naturalnews.com/037281_banking_system_Americans_opting_out.html