About the chart:
About one in five neighborhoods in Los Angeles County does not have access to a single bank or credit union.
Why do we need banks?
According to USC Price Center for Social Innovation, “more than half a million residents [across Los Angeles County] lack access to a single bank or credit union within their neighborhoods. For these Angelenos living in a banking desert – an area that lacks sufficient access to financial institutions – this means that they cannot easily deposit a paycheck, take out a loan for a new car, or even write a check to pay for everyday household expenses.
A survey by the Federal Deposit Insurance Corporation (FDIC) of unbanked households found that 57 percent of unbanked households cited “do not have enough money to keep in an account” as a reason for not banking. Nearly 11% cited “do not trust banks” and almost 10% cited “bank fees are too high” as the main reasons for not banking (FDIC, October 2016).”
The cost of going unbanked
Those without access to a bank or credit union often fall to predatory payday loans, which practice usury, that is, they charge interest at unreasonably high rates.
Furthermore, “a study by the Brookings Institute calculated that a full-time worker’s reliance on check cashing could cost more than $40,000 over their lifetime. Hard-working residents could save thousands of dollars over their careers if they had access to low-cost checking and savings accounts provided by traditional financial institutions. The same study also found that if workers had access to financial advisors and investment tools, they could generate $360,000 over a forty-year career” (KCET, November 2017).