|By Laylan Copelin, Austin American-Statesman|
|McClatchy-Tribune Information Services|
Benito first came to
After the visa expired, he stayed here, working two jobs and raising a family in
"Going into the store was easy to get money in cash," said Benito, speaking in Spanish through a translator. "Going into the bank was complicated."
Today, however, Benito has direct deposit, automatic bill paying and a separate account for emergencies. Benito -- who asked that his last name not be used because he is not in the country legally -- also has a credit card he pays off monthly, creating a credit history.
He is no longer a statistic as an "unbanked" or "underbanked" consumer, in part thanks to a financial class sponsored by the
A significant number of American residents forego traditional banking in favor of cash, pre-paid debit cards, payday loans or other alternatives.
One in 12 U.S. households, or 17 million adults, don't deal with banks or credit unions, according to the latest survey by the
For Hispanics, the percentages are higher. One in five U.S. households don't use traditional banking services and almost 30 percent are considered "underbanked."
Hispanics are among the most likely to never have a bank account and to use alternatives to traditional banking, according to the
It is not just people who are here illegally. According to the
Statistics for the city of
That has real-world consequences, especially for Austinites living paycheck to paycheck.
"Half of our population has trouble making ends meet," said
She said Austinites who deal only in cash and never create a credit history might have difficulty getting a job or an apartment because employers and landlords use credit history as an indicator of reliability.
She is also critical of the fees paid to check cashers, saying a 2010 study by
"People are paying money to get their money," Janecka said.
He said as many as 60 percent of the industry's customers have bank accounts but still use check-cashing services.
"It's not an either-or," D'Alessio said. "It's what fits their needs."
He said many customers need cash from their paychecks immediately because they don't have large enough bank balances to wait for the checks to clear before paying bills.
At most check-cashing stores, D'Alessio said customers find one-stop convenience -- able to wire money, buy pre-paid debit cards or money orders, or pay bills through third-party bill-paying networks.
He said check-cashers tend to locate near their customers and are open longer hours than banks or credit unions. In the case of Spanish speakers, D'Alessio said, check cashers are more likely than banks or credit unions to have staffers who speak the language.
"It's not anything more complicated that delivering the services that people need at that point in time," D'Alessio said.
The course, focusing on money management, is offered at workplaces, neighborhood centers and schools.
Benito, who took the course at his son's school, said the class taught him discipline.
"We find that the underserved or underbanked consumers did not grow up exposed to mainstream financial institutions, so they don't know the benefits," Conway said. "Or others have had a bad interaction or relations with a previous financial institution."
For customers with no or bad credit history, Conway said the credit union offers a "secured credit card." The customer deposits a minimum of
Curry said the key is educating the public about the need to manage their money -- no matter how small the amount.
Checking accounts can be started with as little as
"You can build your financial future at
That initial account can lead to credit cards for small amounts and eventually home mortgages or business loans as the customer grows and succeeds.
"If we're successful, we think we have an opportunity for a customer for life," Curry said.
(c)2014 Austin American-Statesman, Texas
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