Advanced Search
MyIDEAS: Login to save this paper or follow this series

And banking for all?

Contents:

Author Info

  • Michael S. Barr
  • Jane K. Dokko
  • Benjamin J. Keys
Registered author(s):

    Abstract

    This paper presents data from a new survey of low- and moderate-income households in Detroit to examine bank account usage and alternative financial service (AFS) products. We find that for the vast majority of households, annual outlays on financial services for transactional and credit products are relatively small, around 1 percent of annual income. This estimate is lower than those extrapolated by previous work using the posted fees of financial services alone, suggesting that LMI households do not always choose the most expensive financial services option. This evidence is also consistent with LMI households substituting among an array of financial services from the mainstream and alternative financial services sector. Households with bank accounts are more economically active and have access to more forms of credit than unbanked households, resulting in greater use of financial services and higher total outlays. Results from the DAHFS study show permeability in the financial services decisions of LMI households. Namely, having a bank account does not preclude the use of AFS, being unbanked does not exclude households from using mainstream financial services, and contrary to popular belief, being unbanked is not a permanent financial outcome. Generally, results from the DAHFS study suggest that policies designed to expand bank account access alone are unlikely to improve financial outcomes among LMI households unless accompanied by changes in the functionality of mainstream banking products.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.federalreserve.gov/pubs/feds/2009/200934/200934abs.html
    Download Restriction: no

    File URL: http://www.federalreserve.gov/pubs/feds/2009/200934/200934pap.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2009-34.

    as in new window
    Length:
    Date of creation: 2009
    Date of revision:
    Handle: RePEc:fip:fedgfe:2009-34

    Contact details of provider:
    Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551
    Web page: http://www.federalreserve.gov/
    More information through EDIRC

    Order Information:
    Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html

    Related research

    Keywords: Check cashing services ; Payday loans;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Gregory Elliehausen, 2006. "Consumers' Use of High-Price Credit Products: Do They Know What They Are Doing?," NFI Working Papers 2006-WP-02, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. Michael A. Stegman, 2007. "Payday Lending," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 169-190, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2009-34. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.