December 16, 2021

Executive Summary The $100 billion size of the high-cost non-bank basic monetary providers market, like check cashers, payday loan providers, and pawnshops, points to the sought after for standard financial providers among reduced- and moderate-income users. Alternative services and products sold by banking institutions could fulfill those buyers requirements, whilst generating a chance for households to convert their recent spending on high-cost solutions into economy plus riches. To understand more about that capabilities, this study conducts a thorough breakdown of the location of all of the basic shopping economic services corporations to find out her accessibility to reduced- and moderate-income buyers. The study also produces new forecasts regarding the potential economy incurred by a number of circumstances of hypothetical unbanked employees if efforts are built to convert their high-cost charge into cost savings or investments automobiles.

• Moderate- and lower-income homes spend over $8 billion in fees to non-bank checkcashing and short-term creditors to fulfill her fundamental monetary providers demands. Those fees include collected from 48,082 non-bank companies, which include around 26,000 businesses that charge an estimated typical of $40 per payroll check to profit a from typical unbanked people with regular professionals.
• Over 90 per cent of those non-bank basic monetary companies are located within one kilometer of a lender or credit score rating union branch. For-instance, 93 % of non-bank businesses that funds monitors are situated within one mile of a bank or credit union branch.
• Despite common notion, financial and credit score rating union limbs are more inclined to become based in low-income and lower middle-income neighborhoods than non-bank financial services companies. Such as, financial and credit union limbs are situated in 56 per cent of lowerincome neighborhoods; non-banks have 31 percentage of lower-income areas. (more…)