A Financial Services Survey of Low- and Moderate-income Households

This paper discusses the results of a survey of the financial behavior and attitudes of low and moderate-income consumers of financial services. It compares the demographic factors of the banked and the unbanked population, including:

• Race/ethnicity;
• Education level;
• Income.

The paper delves into the following reasons for people not having checking account or savings account:

• Cost;
• Hard barriers including:
  • Not having proper identification;
  • Bad credit.
• Soft barriers including:
  • Feeling of not treated with respect;
  • Not trusting banks.
• Convenience.

The paper explores the frequency of saving and places/locations for saving, and investigates reasons for saving. It then presents the results of the survey:

• Low income population is less banked than the general public;
• This population uses both banks or credit unions and alternative financial institutions and systems;
• High correlation exists between saving and multiple forms of asset building.

The paper concludes with the following findings from the survey that:

• Regarding the banked and unbanked as a dichotomy is a serious mistake;
• Understanding the informal portions of the financial network in these communities is important;
• Low income population is quite debt-averse;
• Low- and moderate-income families can save.