Banking the unbanked: What’s important for Latino consumers

The toll of the Great Recession on the national economy and individual households has been well-documented. Today many aspects of our national economy are thriving, but the recovery for low-income and Latino families has been slower.

Record-high foreclosure rates and persistent unemployment have drained personal savings and increased people’s debt. This has rocked household balance sheets and caused many Latinos to fall out of the banking system.

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According to the FDIC, the unbanked rate for Hispanic households was 19.3%, compared to 7.7% for the population overall in 2009. Since then, unbanked rates have declined for Latinos, down to 16.2% by 2015.

There are many reasons why households remain unbanked. Some are identified in the FDIC National Survey of Unbanked and Underbanked Households, and are reinforced by UnidosUS research, such as privacy, fee transparency, and predictability.

The good news is that many Latino and consumer organizations have been working in partnership with financial institutions to provide safe, affordable and accessible banking options for Latino and low-income consumers. One such fruitful partnership with Bank of America resulted in a model option called SafeBalance. It has a fee of $4.95 a month, no minimum balance requirements, and does not allow overdraft.

In fact, Bank of America does not allow overdraft on any of its debit cards. UnidosUS is part of a national advisory board that advised the bank to move in this direction, which is a huge win for consumers who are paying a combined $14 billion annually on overdraft fees to other institutions.


There are many driving factors behind why consumers choose a particular financial institution, beyond the product offerings. Our research shows that Hispanic consumers want to bank where they feel welcome and where they find bilingual staff who are familiar faces from the community. UnidosUS has launched a new bank teller training program in partnership with Bank of America to train 300 new Latino workers who will be poised to join the financial services workforce during the first year.

The tradeoffs that families make to manage their financial lives are many. Stay tuned for new focus group research this summer that will continue to explore what Latino consumers are looking for in a banking relationship and how financial institutions can deliver both quality products and services.


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