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Joint Economic Committee Democrats Chairman - Rep. Don Beyer (D-VA)

Marketplace: Black, Hispanic and poorer families pay the price for being “unbanked”

Black and Hispanic Americans are more than twice as likely as white Americans to be unbanked or underbanked, meaning they either don’t have a bank account or mostly use things like check cashing services or payday lenders.

Low-income families are more than six times as likely as wealthier families to fall into those categories. People of color and low-income people are also more likely to not have a credit score, according to a new report from the Joint Economic Committee in Congress.

“Usually people are unbanked or underbanked because they don’t have enough money to have a ‘free checking account,'” said Mehrsa Baradaran, a law professor at the University of California, Irvine. “Most checking accounts have a minimum account balance, which, if you go under, you will get charged.”

A lot of people can’t afford to leave hundreds of dollars or more just sitting in the bank, she said.

“The other problem is, there’s a lot of communities in America that don’t have a bank branch that is close to them,” according to Baradaran.

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