Why Millions of Americans Don’t Want Bank Accounts

Why Millions of Americans Don’t Want Bank Accounts
The Atlantic published an article about the real reasons poor people decline to have bank accounts. The author, Lisa J. Servon, is a former college dean and currently professor of urban policy at The New School in New York City. Her article documents what she learned during a recent four-month stint working 8-hour shifts as an employee of RiteCheck, a South Bronx, New York, check cashing store as part of a research project.

A voice of actual experience

Says Ms. Servon, “I learned quickly that many RiteCheck customers have made a conscious choice to be unbanked. The depersonalization of banking is widespread, but there are an increasing number of Americans who frequent alternative financial service providers where the personal relationships between the teller and the customer still
matter tremendously.”

What she found was, “The glue at RiteCheck is the customer/teller relationship. I interviewed 50 customers after my stint as a teller and when I asked them why they brought their business to RiteCheck instead of the major well known bank three blocks away, they often told me stories about the things the tellers did for them.

“I also learned that for many lower income people, commercial banks are ultimately more expensive. The rapidly increasing cost of bounced checked fees and late payment penalties has driven many customers away from banks, particularly those who live close to the edge, like many of my RiteCheck customers. A single overdraft can result in cascading bad checks and hundreds of dollars in charges.”

Ms. Servon’s first-hand observations correlate with what many happy Cash Plus customers have learned: we not only care about our customers, we’re the lower cost option. Her reality-based observations run contrary to the opinions of many so-called consumer advocates who have never set foot in a check cashing store. Sadly, their position has become a mantra of misinformation that is rarely questioned in the media.

Payday advance research next

Since New York operates under archaic usury laws (that don’t apply to bank fees), payday advances are not available there. Ms. Servon has decided to research the payday advance industry by actually working one month in a California payday store.

I recently reached out to Ms. Servon and offered to provide additional insight into the payday advance business. She accepted the offer to talk and I hope to also give her a personal tour of a Cash Plus store when she’s in California.

Bottom line, I’m truly pleased to report that some media are still willingto publish honest, unbiased information based on factual direct research as opposed to knee-jerk rhetoric. Knowing that most payday advance customers are even more loyal to our stores, I’m looking forward to Ms. Servon’s upcoming insider research.

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