More Nevada are ‘unbanked,’ survey finds

More Nevada households don’t have bank accounts as use of prepaid cards for basic financial services, such as making purchases or receiving deposits, has risen modestly over the past two years, a government survey found.

The Federal Deposit Insurance Corp. study found 11.1 percent of Nevada households reported using a prepaid card in the 12 months prior to June 2015, when the survey was taken, up from 7.1 percent in 2013.

The survey found that 9.8 percent of all U.S. households reported using prepaid cards, up from 7.9 percent in 2013.

According to the FDIC, 12.7 percent of Nevada households that used prepaid cards were Hispanic, almost double the 6.5 percent in 2013. Use by whites was 9.6 percent in 2015, up from 6 percent in 2013.

The agency said prepaid usage among Asians and African Americans in Nevada was not available.

Meanwhile, the largest increase in use of prepaid cards in Nevada was by those between the ages 35 to 44, with the FDIC finding 17 percent used prepaid cards in 2015, up from just 5.2 percent in 2013.

The increase in prepaid-card usage in Nevada was among the findings of the FDIC’s latest financial inclusion survey, which looks broadly at the behaviors and attitudes of households in Nevada and nationwide that have limited or no access to the mainstream banking system.

The biennial survey, done in partnership with the U.S. Census Bureau, collected responses from more than 36,000 households. The survey looked at 1,212 households in Nevada.

Meanwhile, more Nevadans have been added to the rolls of the unbanked, a disturbing trend that reflects a continued financial unease among some residents following several years of recession.

The percentage of Nevadans without a checking or savings account increased to 8.9 percent in 2015, up from 7.9 percent in 2013 and 7.5 percent in post-recession 2011, according to the FDIC.

The unbanked figure was 6.6 percent in Nevada in 2009 as the recession was starting to grip the state.

Compare Nevada’s unbanked percentage with Utah at 4 percent, while New Mexico is 9.4 percent.

That was a significant difference than for Americans generally, where the unbanked segment of the population declined to 7 percent from 7.7 percent in 2013 and 8.2 percent in 2011.

“Developing a relationship with a bank helps consumers build assets and create wealth, makes them less susceptible to discriminatory or predatory lending practices and can provide a financial safety net against unforeseen circumstances,” FDIC Chairman Martin Gruenberg said.

Martin said the decline nationwide in the share of households who do not have a banking relationship is a positive development. During a conference with reporters, Martin did not address the increase in Nevada’s unbanked population.

The study also measured the percentage of underbanked individuals, those with a checking or savings account who occasionally make use of alternative, costly products such as check-cashing services, pawn shop loans and auto-title lending.

The improvement in this category was modest, with the U.S. rate dropping only slightly to 19.9 percent in 2015 from 20 percent in 2013.

In Nevada, the underbanked population actually increased, rising to 27.3 percent from 17.6 percent in 2013. The underbanked population was 31.2 percent in Nevada in 2011.

The survey results illustrate the consequences of being unbanked in the United States. Only 56.3 percent of American households reported having saved any money over the prior 12 months.

The proportion of Nevada savers was lower at 54.8 percent. The amount of median savings wasn’t measured.

The study showed certain segments of the state’s population were less likely to deal with banks. For example, 35.6 percent of households earning between $30,000 and $50,000 were either unbanked (7.1 percent) or underbanked (28.5 percent), compared with 28.7 percent (5 percent unbanked; 23.7 percent underbanked) of Americans overall.

Other groups that weren’t well represented in Nevada’s banking system included people lacking a high school diploma, those with disabilities and unemployed people, the study found.

The most common reason to avoid banks was not having enough money. Other common reasons included privacy concerns, a lack of trust and concern over high fees.

For the 59.5 percent of Nevadans that are fully banked, the study found the primary methods of how we access our money continues to change.

Only 17.9 percent said their primary method to access their account was by visiting a bank teller, which is down from 24.4 percent in 2013. Even ATM use declined to 27.6 percent in 2015 from 32.6 percent in 2013.

The FDIC survey found the largest change in how people access their bank accounts was online, with 41.3 percent saying they use online banking, up from 29.9 percent on 2013.

Meanwhile, 8.9 percent of Nevadans’ primary access comes through their smartphones, up from 8.2 percent in 2013.

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