A study by the FDIC shows the number of San Antonio residents who don't have a bank account has risen sharply since the end of the Great Recession to 11.8%, and that is a potential drag on the local economy, News Radio 1200 WOAI reports.
Mercedes Garcia of Master Card says one thing the study shows is that banks need to do a better job of reaching out to low income customers.
"Some banks not understanding this segment of the population, and killing them with fees and with mandatory minimum balances which they cannot afford," she said.
Having more than one tenth of the adult population 'unbanked,' in the industry's phrase, is bad for the economy in several ways.
It slows the movement of money through the retail economy. The more times that a dollar 'turns over' in an economy, the more robust that economy will be, and having a large number of people who are not participating in that turnover slows the entire economy.
The people who are unbanked rely on high cost 'payday lenders' and check cashing services, which starve them of badly needed cash they could be spending in the retail economy. They are also frequently left out of the opportunity to borrow money due to not having a relationship with a financial institution.
Also, as the society moves more toward a 'cashless' economy,' these people will be further left out.
Garcia says indicators of 'financial deserts' are springing up in San Antonio, especially on the southwest and east sides, where money moves slowly, and, often bank branches are simply not available.
"Thinking that I don't have enough money, and the bank really doesn't care about me," she said.
Another challenge in a place like San Antonio, said Garcia, who is herself an immigrant, is that many immigrants come from places where banks are crooked and untrustworthy, and they don't understand the protections that are afforded to bank customers in the U.S.
"The concept of 'cash is king,' and, yes, we don't trust the banks, that is something that we carry with us," she said.
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