Low-Income Families and Banking

Poor often don’t know benefit of banks, By Taryn Luna, July 6, 2011, Boston Globe: “Low-income families use costly check-cashing and loan services not because they lack access to banks, but because they lack knowledge of banking options and their advantages, according to a study by the University of Massachusetts Dartmouth. For example, the study found that about one in four low-income residents in the New Bedford area do not have a bank account because they believe they cannot afford it – although most community banks and credit unions offer low-cost or free accounts as required by state law. In addition, the study found, even low-income residents with bank accounts still use check-cashing establishments more than their banks. The study, which surveyed 173 low-income residents in New Bedford, belies perceptions that limited access to banks drives low-income families to use higher-cost alternatives, said Michael Goodman, an associate professor of public policy at UMass Dartmouth who oversaw the study…”