Wisconsin Ranks Among Homes with Bank Accounts
Wisconsin ranks among the top states for households that have checking or savings accounts, according to a new survey from a banking regulator.
The most recent investigation by the Federal Deposit Insurance Corp. found that only 3.4% of Wisconsin families were “unbanked,” an industry term meaning that no one in a home has a checking or savings account.
This compares to 7% unbanked nationally. Only six states had a lower percentage of unbanked households than Wisconsin.
Wisconsin’s rate of 3.4% was an improvement over the state’s 4.8% of households with no checking or savings accounts in the 2013 FDIC survey.
The results of the new survey, conducted in 2015 in partnership with the US Census Bureau, were recently released by the FDIC.
Checking and savings accounts are important because they typically introduce consumers to the traditional financial system, where deposits from banks and credit unions are protected by federal insurance and banking services are generally cheaper than in businesses. alternatives such as check cashing companies and payday lenders.
“Without a doubt, the bank is the safest place for your money,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. “The trust that people have in Wisconsin bankers themselves, I think, also leads us to have fewer unbanked households.”
Lon Roberts, secretary of the Wisconsin Department of Financial Institutions, said the outreach, education and awareness efforts of his department’s Office of Financial Literacy, the financial services community, and school systems “have certainly contributed “to the success of Wisconsin.
“I’m proud that Wisconsin is once again a leader in the percentage of people banked,” said Roberts, whose agency regulates banks and credit unions in the state and helps run programs to impart knowledge. -make financial to consumers. “Maintaining a check or savings account with a bank or credit union is an important part of financial well-being.
According to a 2014 report from the Department of Financial Institutions, 64% of public school districts with high schools have a personal finance degree requirement, or personal finance is built into the curriculum for a required class.
Poels said that although banks’ financial education programs have traditionally been delivered in schools, over the past five to ten years more has been done to reach adults with information on the fundamentals of personal finance. .
Credit unions, which resemble banks in many ways but are financial cooperatives owned by their members rather than shareholders, have also been very active in financial education initiatives. Credit unions sponsor more than 100 school branches in the state that teach students the habit of saving, according to the Wisconsin Credit Union League.
The league said a study has shown that students with access to savings accounts at school – coupled with in-class financial education – retain financial literacy, develop positive attitudes towards savings and are more likely to have and use an account regularly than students without access.
Oswald Poels said another factor in Wisconsin’s relatively low number of unbanked households is likely cultural. She said that “the financially conservative nature of the people of Wisconsin also generally lends itself to allowing them to put their money in a bank and understand the safety of that rather than literally keeping it in a mattress.”
The FDIC survey also showed that 15.6% of Wisconsin households were “underbanked,” compared to 19.9% nationally. Households were considered underbanked if they had a checking or savings account, but in the past 12 months they had used money orders, check cashing services, international remittances, payday loans, prepayment loans, option-to-buy leasing, pawn shops or auto title loans.
Wisconsin’s underbanked ranking was also the seventh lowest among the states. However, it was up from 10.4% in the 2013 survey.
When asked in the survey why they don’t have an account, the # 1 response – at 57.4% – was “You don’t have enough money to keep an account”. Other commonly cited reasons include avoiding a bank that offers more privacy, “don’t trust banks,” and bank account charges are too high or unpredictable.