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    FOR IMMEDIATE RELEASE
    October 29, 2014

    FDIC Releases National Survey of Unbanked and Underbanked
    Unbanked Households Decline to 9.6 Million

    The Federal Deposit Insurance Corporation (FDIC) today released the results of the
    2013 FDIC National Survey of Unbanked and Underbanked Households, the most
    comprehensive survey on the subject in the United States. The survey indicates that
    the proportion of unbanked households declined from 8.2 percent in 2011 to 7.7
    percent in 2013, while the share of underbanked households remained essentially
    unchanged at 20.0 percent. The decrease in the proportion of the unbanked can be
    explained by improving economic conditions and the changing demographic
    composition of households.

    Other key findings of the survey include:
    * 9.6 million households representing 25 million people were unbanked in 2013,and the 0.5
    percentage point decline in the proportion of unbanked households is estimated to comprise 1.5
    million people and more than half a million households.
    * One in five or 24 million households were underbanked in 2013, consisting of an estimated 68
    million people.
    * 35.6 percent of unbanked households reported the main reason for not having an account being
    insufficient money to keep in an account or meet minimum balance requirements.
    * 34.1 percent of households that recently became unbanked experienced either a significant
    income loss or job loss that they said contributed to becoming unbanked.
    * 22.3 percent of unbanked households reported using a prepaid debit card in the prior 12
    months, compared with 13.1 percent of underbanked and 5.3 percent of fully banked households.
    Also unchanged from 2011, is the finding that one-quarter of households have used at least one
    alternative financial service (AFS), such as non-bank check cashing or payday loans in the past
    year. In all, 12 percent of households used an AFS in the past 30 days, including four in 10
    unbanked and underbanked households.

    The Survey report drew three implications from the findings that could point
    the way toward better meeting consumers' needs:
    * Develop strategies to help households maintain or renew banking relationships through
    economic transitions, such as job loss.
    * Explore opportunities to deploy and market checkless checking accounts and other options to
    meet the transactional needs of households; and
    * Integrate mobile banking initiatives with branch-based strategies in overall efforts to address
    consumers' needs.

    2013 FDIC National Survey of Unbanked and Underbanked Households
    ** 7.7% of U.S. households were unbanked in 2013 (9.6 million households), down from 8.2% in
    2011. The drop was driven by improved economic conditions and increases in household
    education.
    ** 20% of U.S. households were underbanked in 2013 (24.8 million householdds), meaning that
    they had a bank account but also used alternative financial services in the last 12 months.
    * The highest unbanked rates continued to be found among non-Asian minorities, lower income,
    younger, and unemployed households.
    * While still relatively high, the unbanked rate for Hispanic households decreased to 17.9%
    in 2013 from 20.1% in 2011.

    Household Banking Status Transitions.
    Consistent with previous survey results, slightly less than half (45.9%) of unbanked households
    were previously banked.
    * In 2013, about 10% of unbanked households (0.7% of all households) became unbanked
    within the last 12 months; 34.1% of these households experienced either a significant
    income loss or a job loss that they said contributed to this outcome.
    * On the other hand, 1.6% of all households became banked in the last 12 months. For
    these households, 19.4% reported that a new job contributed to their decision; 34.2%
    reported that receiving direct deposits as the main reason they opened an account.

    Reasons Households Were Unbanked
    57.5% of unbanked households reported not having enough money to meet a minimum balance
    as a reason they did not have an account; 35.6% reported this to be the main reason.
    34.2% of unbanked households reported their dislike of or distrust in banks as one reason they
    were unbanked; 14.9% reported this to be the main reason.
    30.8% reported high or unpredictable account fees as one reason they did not have accounts;
    13.4% reported this to be the main reason.

    Future Banking Plans of Unbanked Household.
    The likelihood to open an account in the future is inversely related to how long ago a household
    last held an account:
    * About 75% of unbanked households that recently had a bank account reported being
    somewhat or very likely to open another in the future vs. 25% of those that have never
    been banked and 43% that last had an account more than a year ago.
    Prepaid Debit Card Use. Prepaid debit cards have emerged in recent years as a fast-growing
    payment method, particularly for the unbanked.
    * 22.3% of unbanked and 13.1% of underbanked households used a prepaid card in the last
    12 months, compared with 5.3% of fully banked households. Moreover, the use of
    prepaid cards by unbanked households has grown from 12.2% in 2009 to 27.1% in 2013.

    Alternative Financial Services Use
    Consistent with previous survey findings, about 25% of households used at least one AFS in the
    previous 12 months. AFS use continues to be relatively high among unbanked households:
    63.2% used an AFS in the last 12 months. Use of AFS transactions (e.g. check cashing) are
    much more common than the use of AFS credit (e.g. payday lending).

    Methods of Banking
    For the first time, the 2013 survey examines the various ways households access their bank
    accounts. The results show that bank tellers and online banking were the primary methods relied
    on by the largest share of banked households - about one-third of banked households primarily
    used bank tellers and another third primarily used online banking.
    Underbanked households were less likely to use online banking as their primary means of
    access,
    but were more likely to use mobile devices as a primary method. For those that did primarily use
    electronic means (online or mobile device) to access their account, most used additional methods
    as well, suggesting that electronic means of access continue to be a supplement rather than a
    wholesale substitute for consumers.

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