Cape Code Times reported the information about some 43 million U.S. adults live in households that, although they have bank accounts, occasionally use alternative financial services. Payday lenders and the other providers of financial services exist because of the demand for their services and the ability to offer these services more effectively than banks.
To try to meet that demand, the FDIC launched a program to develop payday lending alternatives. While touted as a success, the products offered have different terms and different price structures than payday loans and are in limited demand. Banks simply cannot offer traditional payday loans profitably to their customers.
The FDIC mistakenly characterizes as “underbanked” any household that has a bank account but used an alternative financial service, such as a payday loan. Findings show that customers use payday loans for multiple reasons, including convenience. Just because adults with bank accounts choose to use an alternative financial service does not necessarily mean they are being underserved by their bank or are “underbanked.”
D. Lynn DeVault Board chairwoman of Community Financial Services Association of America stated that: No business, including banks, can possibly meet every need of every customer at all times.
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