Poor Often Don’t Know Benefits of Banks
Study finds lots of access but plenty of reservations
NEW BEDFORD – 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.
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Click here to access a summary of the report conducted by U Mass Dartmouth.
In the Boston area Metro Credit Union offers low-income families low-cost accounts and offers financial literacy education. Click here for more information about Metro Credit Union.