Access to banking services is a crucial component of financial stability and economic opportunity in the United States, The Cheyenne Post reports.
However, despite advancements in financial technology and increased awareness of the importance of banking, a small portion of the population remains “unbanked” — individuals without access to traditional banking services like savings accounts, credit cards, or checking accounts.
According to a 2023 report from the Federal Deposit Insurance Corporation (FDIC), approximately 4.2% of Americans remain unbanked. In Wyoming, that figure is lower, with just 1.8% of residents lacking a bank account.
One of the primary reasons people cited for remaining unbanked was difficulty meeting minimum balance requirements, according to the FDIC. Banks often require initial deposits ranging from $25 to $100 to open accounts, which can be a significant hurdle for low-income individuals.
Other factors include concerns about trust in financial institutions and fears of accumulating fees. Some individuals also prioritize privacy or find traditional bank locations and operating hours inconvenient.
Economic and demographic trends also influence banking participation. Black and Hispanic households are more likely to be unbanked than white households at all income levels. Geographic disparities further affect banking access, although the gap between urban and rural banking rates has narrowed over time.
Living outside the banking system can come at a steep cost. Without access to traditional financial services, individuals often rely on alternatives such as payday lenders, check-cashing services, and title loans — all of which typically charge much higher fees and interest rates than banks.
Experts refer to this exclusion from mainstream financial systems as “financial exclusion.” Access to banking can provide essential resources for storing wages, building financial security through savings, and accessing loans that can support business ventures and community development.
The rise of digital banking has the potential to break down some barriers to financial inclusion by reducing the need for physical branches and offering more convenient, online services. However, FDIC research shows that low-income and less-educated Americans are more likely to rely on in-person banking, which has seen reduced availability as banks shift operations online.
Federal agencies have made efforts to increase the number of banked Americans, particularly in response to the COVID-19 pandemic. Many individuals opened bank accounts to access government stimulus payments during that period. Nearly half of unbanked Americans who opened accounts cited the stimulus as a motivating factor.
However, a 2022 Government Accountability Office report found that evaluating the success of these initiatives remains challenging. Recommendations to establish clear measurement systems for public awareness campaigns have yet to be fully implemented.
