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FDIC points to those under-served

FDIC points to those under-served
A client uses a Bank of America ATM machine in New York on February 24, 2009. (UPI Photo/Ezio Petersen) | License Photo

WASHINGTON, Dec. 2 (UPI) -- A Federal Deposit Insurance Corp. report says that 25 percent of U.S. households do not use banks to cash paychecks or deposit funds.

The report says 53 percent of African-American households and 43 percent of Hispanic households use check cashing alternatives, including payday lenders and pawnbrokers, USA Today reported Wednesday.

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The report compiled by the Census Bureau says 30 million households with or without bank accounts use alternative services to handle their finances.

Nine million households, including a fifth of households earning under $30,000 a year, have no bank account, the report to be released Wednesday says.

FDIC Vice Chairman Martin Gruenberg said, "there's a substantial segment of American households whose financial services needs aren't being adequately met."

The FDIC said it would promote "starter accounts," which have no minimum balance requirements and do not include automatic overdraft fees.

Beyond profits, "there has to be a greater responsibility for the community in which banks are located," said Valarie Wilson of the National Urban League Policy Institute.

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