Archives: Seasons 1-5
Segment | Economy

The Unbanked

Los Angeles has the highest percentage of "unbanked" in the nation. There are an estimated 300,000 households in the city who do not use banks. Instead they use cash, paying too much at check cashing stores and payday lenders.

There are twice as many payday lenders, pawn shops and check cashers in Los Angeles as there are banks and credit unions. Minority communities are especially bank poor.

Anchor Val Zavala reports on the launch of a campaign to move the "unbanked" into the financial mainstream. She visits a home where a community organizer is teaching Spanish-speakers about the benefits of banks. She goes to a community center where tax day is a chance to get the "unbanked" banked. Some banks have already discovered that opening branches in low income neighborhoods yields surprising success for the company and the community.

RELATED RESOURCES:

Bank on LA
Community Financial Resource Center
USC Center for Sustainable Cities
LA Times: Reaching LA's 'Unbanked'
The Wall Street Journal: Beyond Payday Loans

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This is good information for low income families. This gives them an easy way to save money by opening an account at a local bank rather than paying a unnecessary fee to cash their check. Im glad to hear that LA is getting involved in helping the uninformed at a time where many could use the extra dollar they saved.

why would they not use banks?

Interesting story. I was not aware that there were so few banking opportunities for immigrants in many neighborhoods. Our society needs to do a better job to balance instead of letting the "rip off" cash checking sharks lead the way. Many city neighborhoods have no grocery stores, hardware stores, and as the story conveys....no banks. I married an immigrant from the Czech Republic. He was in his 40s and had never written a check before in his life. He was completely distrustful of "big brother." He could not understand my pestering to build a credit history. Now he has a credit card, a bank account, a debit card and direct deposit. It helps him to make easy transfers to his family in his old country, and conduct transactions in our "virtual" world. He learned the hard way when he returned there and had $700 cash stolen in a mugging. This story revealed many important steps if one ever wants to own their own home some day.

They're part of the "invisible economy" that includes illegal immigrants. Their distrust of banks is a reflection of their distrust in the government's ability to fight for them, I think. I just didn't know there were so many not banking! Great piece.

Wow! It's amazing how to many people are not taking the benefits that banks give. Plus most banks now in days offer free checking accounts. It's a win-win situation. Why would you pay to cash a check when it could be done free. Oh yeah, STAY AWAY from "pay advance" places.

it is good that there are people who actually care to help people who are low income in getting educated. many of these people are only spanish speaking and need help with this.
they are afraid to even step into a bank because of the language barrier. it is great that
this program is willing to help and open up doors of opportunity for them.
on behalf of all the people who will benefit from this organization, I THANK YOU

The irony is Wells Fargo is the nation's largest owner of Check Cashing businesses. So people are contributing to the banking system whether they like it or not.

Wow! It wasn't until I watched this episode that I realized that poor neighborhoods do not have many banks. This has really opened my eyes! How does the city expect to fix the problem when the banks don't open branches in these neighborhoods? Great story.

Good Story. Would've liked to hear more stats.

I would like to know if one of the reasons these lower income families put up with the check cashing fees is due to the fees you can incur with a bank...It might be less expensive for them to not have to worry about the overdraft charges and other fees the banks charge. I hope that these organizers are also teaching them how to manage their money.

As some have pointed out there are definitely language and cultural challenges that banks and people need to overcome. For those in these dis-invested communities they aren't as many options. Check cashing prices outnumber branches and ATMs. For the person who's living paycheck to paycheck, day to day, it would be challenge to think about the long-term. The fact is they're convenient. Another issue is the fear of incurring high fees. It seems as though there's this general feeling that you will inevitably get dinged by your bank, but once you demonstrate that this can be eliminated with good money management and a dash of responsibility, as with many other fees in life, it can be avoided.

Thank you for KCET for putting this on. And thanks to all here.

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