With the 2020 presidential election on the horizon, the theme of growing access to the banking system is becoming front and center. Democrats such as U.S. Representative Alexandria Ocasio-Cortez and U.S. Senators Elizabeth Warren and Bernie Sanders view financial inclusion as a way to bring in voters, Reuters reported.
The lawmakers — along with U.S. Senator Kirsten Gillibrand — want the U.S. Postal Service to offer bank services. U.S. Senator Kamala Harris is looking to clamp down on payday lenders, while U.S. Senator Cory Booker has mentioned that he is seeking to stop overdraft charges.
As it stands, reports indicate that households that are “underbanked” or “unbanked” use 10 percent of their yearly income toward services such as credit or check cashing per a government study. In addition, many Americans aren’t able to pay annual fees and ATM charges — or have minimum balances in their budgets per the report.
“It’s expensive to be poor,” Warren told the news outlet through a statement. “We need a strong Consumer Financial Protection Bureau that cracks down on payday lenders ... And we need postal banking so people in every community in America have easy and convenient access to basic banking products.”
The news comes as a survey showed that the percentage of unbanked Americans fell to the lowest point as of the financial crisis of 2007-2009. Federal Deposit Insurance Corporation (FDIC) data shows that 6.5 percent of 129.3 million U.S. households were considered to be “unbanked” in 2017, which means they don’t have a savings or checking account.
That rate, however, is half a percentage point below than when the survey was last conducted in 2015 and represents about 8.4 million U.S. households. It is also reportedly the lowest recorded level since the survey started in 2019. The study also indicated that the “decline can be attributed almost entirely to improvements in the economic circumstances of U.S. households.”